An Initial Overview of Insurance Agencies, Brokers, & Producer Groups

Financial Institutions Research Report Series & Financial Advisors Research Report Series An Initial Overview of Insurance Agencies, Brokers, & Producer Groups March 2009

TABLE OF CONTENTS INTRODUCTION, KEY FINDINGS, & EXECUTIVE SUMMARY...16 A SYNOPSIS OF FINANCIAL SERVICES INDUSTRY MARKETS & DISTRIBUTION CHANNELS...29 EVOLUTION OF THE INSURANCE AGENCIES, BROKERS, & PRODUCER GROUPS BUSINESS...50 Market History...50 Early Phase...50 Middle Phase...50 Recent Phase...50 Market Definition...50 Captive Agents...50 Independent Agents...50 Market Growth...50 Insurance Agencies, Brokers, & Producer Groups Employees...50 Insurance Agencies, Brokers, & Producer Groups Reps...51 Insurance Agencies, Brokers, & Producer Groups Net Premiums Written...51 Insurance Agencies, Brokers, & Producer Groups Revenues...51 Insurance Agencies, Brokers, & Producer Groups Net Income...51 Key Issues...51 Product Utilization Trends...51 Insurance Products...51 Mutual Funds...52 Fee- Accounts...53 Other Products...54 Leading Captive & Independent Insurance Agencies, Brokers, & Producer Groups...54 Insurance Agencies, Brokers, & Producer Groups by Number of Employees...54 Insurance Agencies, Brokers, & Producer Groups by Number of Reps...55 Insurance Agencies, Brokers, & Producer Groups by Net Premiums Written...55 Insurance Agencies, Brokers, & Producer Groups by Revenues...56 Insurance Agencies, Brokers, & Producer Groups by Net Income...56 MARKET SEGMENTATION...58 Captive Agents...58 Independent Agents...58 Brokers & Producer Groups...59 KEY VENDORS TO THE INSURANCE AGENCIES, BROKERS, & PRODUCER GROUPS BUSINESS...63 Independent Broker/Dealers, Custodians, & Clearing Brokers...63 Mutual Fund Companies & Other Traditional Product Companies...66 Fee-Accounts, TAMPs, & Separate Account Managers...66 Exchange Traded Funds, Hedge Funds, & Other Investment Product Companies...66 Wealth Management & Family Office Service Product Companies...66 Technology Companies & Other Key Vendors...66 FUTURE PREDICTIONS FOR THE INSURANCE AGENCIES, BROKERS, & PRODUCER GROUPS BUSINESS...67 2

APPENDIX...68 Profiles of Captive Insurance Agencies...68 American International Group (AIG)...68 History...68 Businesses...68 General Insurance...69 Life Insurance & Retirement Services...72 Organization & Ownership...77 Ameriprise Financial...77 History...78 Investors Syndicate & IDS Years...78 American Express Years...78 Ameriprise Financial Years...79 Statistics...82 Businesses...82 Ameriprise Financial Broker/Dealer...84 H&R Block Advisors...99 Securities America...110 Organization & Ownership...135 Aon...136 History...136 Statistics...137 Businesses...137 Insurance Brokerage...138 Capitve Insurance Company Manager...138 Reinsurnace Broker...138 Combined Insurance Company of America...138 Organization & Ownership...138 Arthur Gallagher...138 History...138 Statistics...139 Businesses...139 Organization & Ownership...139 Axa Group...139 History...140 Businesses...140 Axa Financial...140 Axa Advisors...142 MONY...151 Organization & Ownership...159 Brown & Brown...160 History...160 Statistics...160 Businesses...161 Organization & Ownership...161 Cullen & Frost Bankers...161 History...161 Businesses...161 Frost Insurance Agency...161 Organization & Ownership...161 Farmers Insurance...162 3

History...162 Statistics...162 Businesses...162 Organization & Ownership...162 Hewitt Associates...162 History...163 Statistics...163 Businesses...164 Organization & Ownership...164 Hub International...164 History...164 Businesses...165 PLI Brokerage Insurance...165 Organization & Ownership...165 Lincoln Financial Group...165 History...165 Statistics...168 Businesses...169 Organization & Ownership...184 Manulife...185 History...185 Businesses...185 John Hancock Financial Network...186 Organization & Ownership...189 Mass Mutual...190 History...190 Businesses...190 Domestic Insurance...191 Organization & Ownership...193 New York Life...193 History...193 Businesses...193 Life & Annuity...193 Organization & Ownership...194 Northwestern Mutual...194 History...194 Early Years...195 Growth Years...195 Maturity...196 Statistics...200 Businesses...200 Northwestern Mutaul Life Insurance Company...201 Northwestern Mutual Long-Term Care Insurance Company...202 Northwestern Mutual Trust Company...202 Northwestern Mutual Investment Services...205 Organization & Ownership...220 Prudential Financial...220 History...221 Businesses...221 Insurance...221 Organization & Ownership...221 4

State Farm...222 History...222 Statistics...223 Businesses...224 Property & Casualty...224 Life Insurance, Health, & Annuities...225 State Farm Bank...227 Mutual Funds...228 Organization & Ownership...228 Thrivent Financial for Lutherans...229 History...229 Statistics...230 Businesses...231 Organization & Ownership...234 Tompkins Insurance Agencies...234 History...234 Statistics...235 Businesses...235 Organization & Ownership...235 USI Holdings...235 History...235 Statistics...236 Businesses...236 Financial Services...236 Property & Casualty...236 Health & Welfare...236 Organization & Ownership...236 Willis Group Holdings...237 History...237 Statistics...237 Businesses...238 Global...238 North America...238 International...238 Organization & Ownership...238 Woodruff-Sawyer & Company...238 History...238 Statistics...239 Businesses...239 Organization & Ownership...239 Profiles of Independent Agencies, Brokers, & Producer Groups...239 American Brokerage Consultants...239 History...240 Statistics...240 Businesses...240 Consulting...240 Research...240 Organization & Ownership...240 Annuitynet.Com...241 History...241 Statistics...241 5

Businesses...241 Organization & Ownership...241 Banksurance.com...242 History...242 Statistics...242 Businesses...242 Organization & Ownership...242 Capitas Financial...243 History...243 Statistics...243 Businesses...243 Annuities...243 Long-Term Care...243 Organization & Ownership...243 CentreLink...244 History...244 Statistics...244 Businesses...244 Organization & Ownership...244 Citigroup...244 History...245 Businesses...245 Ascensus...245 Organization & Ownership...245 Clark & Bardes Holdings...246 History...246 Statistics...246 Businesses...246 Organization & Ownership...246 Conseco...246 History...247 Businesses...247 Townsend & Schupp...247 Organization & Ownership...247 CPS Insurance Services...247 History...247 Statistics...247 Businesses...248 Organization & Ownership...248 Diversified Brokerage Services...248 History...248 Statistics...249 Businesses...249 Organization & Ownership...249 Elar Partners...249 History...249 Statistics...250 Businesses...250 Organization & Ownership...250 Insure.Com...250 History...250 6

Statistics...251 Businesses...251 Organization & Ownership...251 INSWEB...251 History...251 Statistics...252 Businesses...252 Organization & Ownership...252 M Financial...253 History...253 Statistics...254 Businesses...254 Insurance Producers Group...254 Insurance Manufacturer...255 M Holdings Securities...255 Organization & Ownership...260 Marsh & McLennan...261 History...261 Statistics...262 Businesses...264 Risk & Insurance...264 Investment Management...264 Investment Consulting...267 Organization & Ownership...267 National Financial Partners (NFP)...267 History...267 Statistics...269 Businesses...270 Acquisition Company...270 NFP Insurance Services...283 NFP Securities...283 Organization & Ownership...301 Provada...302 History...302 Statistics...302 Businesses...302 Insurance Brokerage...303 Life Settlements...303 Agency Outsourcing...303 Organization & Ownership...303 Profiles of Insurance Industry Service Providers...303 ACINA Technologies...303 History...303 Businesses...303 Organization & Ownership...304 Alabama State Commissioner...304 History...304 Businesses...304 Organization & Ownership...304 Alaska State Commissioner...304 History...304 7

Businesses...305 Organization & Ownership...305 Alliance of American Insurers...305 History...305 Businesses...305 Organization & Ownership...305 AM Best Company...306 History...306 Businesses...306 Organization & Ownership...306 American Academy of Actuaries...306 History...306 Businesses...307 Organization & Ownership...307 American Council of Life Insurers (ACLI)...307 History...307 Businesses...307 American Council Life Insurers (ACLI)...307 Organization & Ownership...307 American Insurance Association...308 History...308 Services...308 Organization & Ownership...308 American Risk & Insurance Association...308 History...308 Services...309 Organization & Ownership...309 American Society of Pension Professionals & Actuaries (ASPPA)...309 History...309 Services...309 Organization & Ownership...309 America s Health Insurance Plans...310 History...310 Services...310 Organization & Ownership...310 Arizona State Commissioner...310 History...310 Businesses...310 Organization & Ownership...311 Arkansas State Commissioner...311 History...311 Businesses...311 Organization & Ownership...311 Association of Health Insurance Advisors...311 History...312 Businesses...312 Organization & Ownership...312 Association of Home Office Underwriters...313 History...313 Services...313 Organization & Ownership...313 8

Banc Insurance Services...313 History...313 Services...314 Organization & Ownership...314 California State Commissioner...314 History...314 Businesses...314 Organization & Ownership...314 Center for Economic Justice...315 History...315 Businesses...315 Organization & Ownership...315 Center for Insurance Research...315 History...315 Services...316 Organization & Ownership...316 Colorado State Commissioner...316 History...316 Businesses...316 Organization & Ownership...316 Conference of Consulting Actuaries...317 History...317 Services...317 Organization & Ownership...317 Connecticut State Commissioner...317 History...317 Businesses...318 Organization & Ownership...318 Consumer Credit Insurance Association...318 History...318 Services...318 Organization & Ownership...318 Consumer Federation of America...318 History...319 Statistics...319 Businesses...319 Organization & Ownership...319 Delaware State Commissioner...319 History...319 Businesses...320 Organization & Ownership...320 District of Columbia State Commissioner...320 History...320 Businesses...320 Organization & Ownership...321 Florida State Commissioner...321 History...321 Businesses...321 Organization & Ownership...321 GAMA International...321 History...321 9

Statistics...322 Businesses...322 Organization & Ownership...322 Georgia State Commissioner...322 History...322 Businesses...322 Organization & Ownership...323 Griffith Foundation for Insurance Education...323 History...323 Services...323 Organization & Ownership...323 Hawaii State Commissioner...323 History...324 Businesses...324 Organization & Ownership...324 Idaho State Commissioner...324 History...324 Businesses...324 Organization & Ownership...325 Illinois State Commissioner...325 History...325 Businesses...325 Organization & Ownership...325 Independent Insurance Agents of America...325 History...325 Statistics...326 Businesses...326 Organization & Ownership...326 Indiana State Commissioner...326 History...326 Businesses...326 Organization & Ownership...327 Insurance Accounting & Systems Association...327 History...327 Services...327 Organization & Ownership...327 Insurance & Financial Communicators Association...328 History...328 Services...328 Organization & Ownership...328 Insurance Information Institute...328 History...328 Services...328 Organization & Ownership...328 Insurance Marketplace Standards Association...329 History...329 Services...329 Organization & Ownership...329 Insurance Services Office...329 History...330 Services...330 10

Organization & Ownership...330 International Claim Association...330 History...330 Services...330 Organization & Ownership...330 International Insurance Society...331 History...331 Services...331 Organization & Ownership...331 Iowa State Commissioner...331 History...331 Businesses...331 Organization & Ownership...332 Journal of Risk & Insurance...332 History...332 Statistics...332 Businesses...332 Organization & Ownership...332 Kansas State Commissioner...332 History...333 Businesses...333 Organization & Ownership...333 Kentucky State Commissioner...333 History...333 Businesses...333 Organization & Ownership...334 Life Insurance Marketing & Research Association (LIMRA)...334 History...334 Services...334 Organization & Ownership...334 Life Office Management Association (LOMA)...334 History...335 Services...335 Organization & Ownership...335 Life Plans...335 History...335 Services...335 Organization & Ownership...335 Long Term Care...336 History...336 Services...336 Organization & Ownership...336 Louisiana State Commissioner...336 History...336 Businesses...336 Organization & Ownership...336 Maine State Commissioner...337 History...337 Businesses...337 Organization & Ownership...337 Maryland State Commissioner...337 11

History...337 Businesses...338 Organization & Ownership...338 Massachusetts State Commissioner...338 History...338 Businesses...338 Organization & Ownership...338 Medical Information Bureau Group (MIB)...339 History...339 Services...339 Organization & Ownership...339 Michigan State Commissioner...339 History...339 Businesses...340 Organization & Ownership...340 Minnesota State Commissioner...340 History...340 Businesses...340 Organization & Ownership...340 Mississippi State Commissioner...341 History...341 Businesses...341 Organization & Ownership...341 Missouri State Commissioner...341 History...341 Businesses...342 Organization & Ownership...342 Montana State Commissioner...342 History...342 Businesses...342 Organization & Ownership...342 Moody s...343 History...343 Businesses...343 Organization & Ownership...343 National Association of Independent Life Brokerage Agencies...343 History...343 Businesses...344 Organization & Ownership...344 National Association of Insurance Commissioners (NAIC)...344 History...344 Services...344 Organization & Ownership...344 National Association of Mutual Insurance Companies...345 History...345 Statistics...345 Businesses...345 Organization & Ownership...346 National Association of Professional Insurance Agents...346 History...346 Statistics...346 12

Businesses...347 Organization & Ownership...347 National Association of Registered Agents & Brokers...347 History...347 Statistics...348 Businesses...348 Organization & Ownership...348 National Association of Variable Annuities (NAVA)...348 History...348 Services...348 Organization & Ownership...349 National Organization of Life & Health Insurance Guaranty Associations...349 History...349 Services...349 Organization & Ownership...349 Nebraska State Commissioner...349 History...349 Businesses...350 Organization & Ownership...350 Nevada State Commissioner...350 History...350 Businesses...350 Organization & Ownership...350 New Hampshire State Commissioner...351 History...351 Businesses...351 Organization & Ownership...351 New Jersey State Commissioner...351 History...351 Businesses...352 Organization & Ownership...352 New Mexico State Commissioner...352 History...352 Businesses...352 Organization & Ownership...352 New York State Commissioner...353 History...353 Businesses...353 Organization & Ownership...353 North Carolina State Commissioner...353 History...353 Businesses...354 Organization & Ownership...354 North Dakota State Commissioner...354 History...354 Businesses...354 Organization & Ownership...354 Ohio State Commissioner...355 History...355 Businesses...355 Organization & Ownership...355 13

Oklahoma State Commissioner...355 History...355 Businesses...356 Organization & Ownership...356 Oregon State Commissioner...356 History...356 Businesses...356 Organization & Ownership...356 Pennsylvania State Commissioner...356 History...357 Businesses...357 Organization & Ownership...357 Rhode Island State Commissioner...357 History...357 Businesses...357 Organization & Ownership...358 Schiff s Insurance Observer...358 History...358 Businesses...358 Organization & Ownership...358 Sheshunoff Information Services...358 History...359 Businesses...359 Organization & Ownership...359 Society of Actuaries...359 History...359 Businesses...359 Organization & Ownership...359 South Carolina State Commissioner...360 History...360 Businesses...360 Organization & Ownership...360 South Dakota State Commissioner...360 History...360 Businesses...361 Organization & Ownership...361 SS Huebner Foundation for Insurance Education...361 History...361 Services...361 Organization & Ownership...361 Tennessee State Commissioner...362 History...362 Businesses...362 Organization & Ownership...362 Texas State Commissioner...362 History...362 Businesses...363 Organization & Ownership...363 Utah State Commissioner...363 History...363 Businesses...363 14

Organization & Ownership...363 Vermont State Commissioner...364 History...364 Businesses...364 Organization & Ownership...364 Virginia State Commissioner...364 History...364 Businesses...365 Organization & Ownership...365 Washington State Commissioner...365 History...365 Businesses...365 Organization & Ownership...365 Weiss Ratings...365 History...366 Statistics...366 Businesses...366 Organization & Ownership...366 West Virginia State Commissioner...366 History...366 Businesses...367 Organization & Ownership...367 Wisconsin State Commissioner...367 History...367 Businesses...367 Organization & Ownership...367 Wyoming State Commissioner...368 History...368 Businesses...368 Organization & Ownership...368 Duplication or distribution of this report, and/or the data in this report, is strictly prohibited without the written consent of Tiburon Strategic Advisors, LLC 15

INTRODUCTION, KEY FINDINGS, & EXECUTIVE SUMMARY The introduction, key findings, & executive summary of this report summarizes the entirety of the report and offers a set of useful summary facts. It also serves to address the report s objectives, Tiburon s research processes, and the report s target markets. Context Setting The purpose of this report is to provide readers with an initial understanding of the complex insurance agencies, brokers, & producer groups market. The report addresses the evolution of these related distribution channels, and their utilization of insurance products, mutual funds, fee-account programs, & other financial products. Another Tiburon research report addresses insurance products across distribution channels. This is the second draft of Tiburon s research on this topic. Tiburon s first draft of this report was published in 2007; that draft consolidated prior Tiburon research into one report. This is Tiburon s second draft of this report; this draft aligns the report s structure with that of other Tiburon research reports and begins to align it with Tiburon s related independent broker/dealer market report. This draft also includes updates to the profiles of some core Tiburon clients, including Ameriprise Financial, M Financial Group, National Financial Partners, & Northwestern Mutual Life. Tiburon Research Process Readers should find this report to be both comprehensive and unbiased in its opinions. Tiburon is not a narrowly defined research firm and does not do research on speculation nor to earn substantial revenues selling research reports (all Tiburon reports are offered for sale at $5,000 each, which comes nowhere close to even covering the time invested). Instead, Tiburon conducts extremely detailed research to support critical strategic consulting assignments for its financial services industry clients. As part of Tiburon s traditional consulting efforts, before focusing on customized client analyses and to get thoroughly immersed in a business segment, Tiburon typically conducts more than a half-dozen research steps: Summarize & organize recent industry media coverage Incorporate proprietary learnings from Tiburon s benchmarking tools Review & incorporate learnings from all key industry firms web sites Conduct detailed news searches to round out company views Seek out research & analyst reports to compare and further develop findings Solicit opinions from Tiburon s executive program members Interview industry participants to confirm or revise findings Tiburon will update this report in three-to-six months depending on the evolution of the market and demand for such, so the firm welcomes readers to share any feedback, input, or ideas by email, phone, or in-person. If you send comments, Tiburon will be happy to send you a revised copy of the report. In accordance with Tiburon s traditional research process, future versions of this report will attempt to take this research further, including more detailed profiles of each firm and more opinions from other industry observers that can help further explain the conclusions. 16

Target Markets The goal of this report was to simplify a wide variety of data on a widely discussed issue. Tiburon s method (as with all of its work) was simple; call it as best the firm sees it and try to explain the data to the readers. If Tiburon has made any mistakes, the firm apologizes and will seek to correct them in subsequent drafts. Three separate audiences should find this report helpful. If you are an executive at an investment management firm or insurance company (such as a mutual funds or annuities firm), this report should be helpful in understanding how broad market developments may impact the future of your products & services. The report offers a comprehensive overview of this issue, with a view on both institutional and individual advisor impacts. If instead you are an executive at a distribution company (such as a bank or brokerage firm), this report should offer details on an issue faced at both the corporate level and by individual financial advisors. All banks, brokerage firms, insurance agencies, and other advisory organizations are faced with competing both for clients and for talent. Hopefully, this report will offer some competitive insights and allow you to further your own financial advisor strategy. Finally, if you are an individual financial advisor, this report should offer a macro context in which to place your business and consider this aspect of your business. Hopefully, Tiburon s thoughts will assist you in delivering better advice to your clients and running your business more efficiently. Key Findings Below is a list of summary facts from this report: Evolution of the Insurance Agencies, Brokers, & Producer Groups Business This chapter outlines the evolution of the insurance agencies, brokers, & producer groups business -- Northwestern Mutual was Founded by New York Trader John Johnston as the Mutual Life Insurance Company of the State of Wisconsin in 1857 Comments Founded in 1857 Founded as Mutual Life Insurance Company of the State of Wisconsin Founded by John Johnston Based in Janesville, WI CEO: John Johnston Market History Source: 1/27/09 International Directory of Company Histories Web Site; 3/27/07 P R Newswire; 12/18/08 Northwestern M utual Web Site; 12/08/08 Northwestern This section recaps the market Mutual Web Site; 6/8/05 Capital Markets Consultants Conversation (Mendelson); 4/27/05 Northwestern Mutual Web Site; Tiburon Research & Analysis history of the insurance agencies, brokers, & producer groups business Northwestern Mutual was founded by New York Trader John Johnston as the Mutual Life Insurance Company of the State of Wisconsin in 1857 Market Definition This section outlines the market definition of the insurance agencies, brokers, & producer groups business -- Market Growth 17

This section highlights the market growth of the insurance agencies, brokers, & producer groups business -- Key Issues This section highlights the key issues of the insurance agencies, brokers, & producer groups business Reps utilize a wide variety of annuity companies, with Nationwide (Best of America), sun America, and American Skandia being the leaders Amongst the three leaders, Sun America receives the highest satisfaction score of 7.8 out of 10.0 Pacific Life receives the highest satisfaction score amongst insurance companies Insurers have some of the most recognizable brand names in the financial industry, but are not associated with top-flight asset management Insurers are positioning as retirement specialist and employing sub-advisors such as Sun America The largest broker/dealers include AXA and NY Life, each with over 6,000 reps Leading Captive & Independent Insurance Agencies, Brokers, & Producer Groups This section highlights the leading life firms in the insurance agencies, brokers, & producer groups business Largest fee-based employee benefit firms in the San Francisco Bay Area include Watson, Wyatt Worldwide, Tower Perrin, and others Largest insurance brokers by number of reps include Willis insurance and Lockton Insurance. Specifically, Willis Insurance has 13,500 and Lockton Insurance has 1,173 reps Largest insurance brokers in the San Francisco area by number of reps include ABD Insurance and Woodruff-Sawyer Largest fee-based employee benefit firms by number of reps include various companies Top property & casualty insurance providers in terms of net premiums written include State Farm Group and Allstate Total Firm Revenues Nationwide, SunAmerica, and American Skandia are the Leaders Across All Rep Sizes $ 1 M il li on + $ 6 0 0,0 0 0 - $ 9 9 9, 9 9 9 $ 3 0 0,0 0 0 - $ 5 9 9, 9 9 9 $ 0 - $ 2 9 9,9 9 9 Annuity Companies Utilized By Rep Size 0 % 2 0 % 4 0 % 6 0 % 8 0 % Source: 7/01 Independent Rep Best Practices Survey; Tiburon Research & Analysis N a t io n w id e S u n A m e r ic a R e t i r e m e n t M a r k e t s A m e r i c a n S k a n d i a P a c i f i c L if e H a r t f o r d L in c o ln N a t io n a l M a n u li f e P u t n a m S c u d d e r K e m p e r S u n L if e o f C a n a d a ( M F S ) A I G Largest Insurance Brokers In the San Francisco Area by Number of Reps Include ABD Insurance and Woodruff-Sawyer Largest Insurance Brokers In the San Francisco Bay Area By Number of Reps ABD Insurance Woodruff-Sawyer Willis Insurance Services ISU Insurance Services Acordia of California Keenan & Associates 79 109 104 115 203 270 Heffernan Group 65 California Insurance Center 18 Arthur Gallagher 50 53 Lockton Insurance Brokerage 49 Source: 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis

Insurance Group. State Farm has $35 billion and Allstate has $18 billion net premiums Top insurance brokers in terms of net premiums written include Willis Insurance and Lockton Insurance, with the leader having over three times as much as the next competitor Top insurance brokers in terms of net premiums written in the San Francisco Bay Area include Marsh & McLennan and ABD Insurance, both with over $1.0 billion net premiums written Largest fee-based employee benefit firms in the San Francisco area include Watson Wyatt Worldwide, Towers Perrin, and others Market Segmentation This section explains the market segmentation of the insurance agencies, brokers, & producer groups business There are four fundamental shifts that have taken place in insurance distribution, including spun off agencies, proprietary products, expanding products, and new distribution channels Many insurance companies have no captive sales force Some life insurance companies with captive sales forces allow their agents to sell non-proprietary products Insurance companies are rushing to build investment programs to gain a share of the market for high net worth households, currently dominated by full-service brokers and banks And insurance agents now offer a wide variety of financial planning services, with almost all offering insurance planning services and individual retirement accounts Insurance companies are also building mutual fund programs, hoping to take advantage of the pending explosion in retirement savings Insurance sales are spreading across a wider range of sellers, ultimately decreasing full time agents and increasing part-time insurance agents Beyond traditional insurance agents, Top Insurance Brokers in Terms of Net Premiums Written Include Willis Insurance and Lockton Insurance, With The Leader Having Over Three Times as Much as the Next Competitor Willis Insurance Services Lockton Insurance Brokers ABD Insurance Tanner Insurance Keenan & Associates ISU Insurance Services Heffernan Group Woodrruff-Sawyer Sitzmann Morris & Lavis Jenkins Athens Insurance Insurance Brokers By Net Premiums Written ($ Millions) 19 $940 $850 $800 567 $544 $457 $370 $2,260 $8,500 Source: 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis $34,000 And Insurance Agents Now Offer a Wide Variety of Financial Planning Services, With Almost All Offering Insurance Planning Services and Individual Retirement Accounts Individual Retirement Accounts Insurance Planning Services Investment Planning Estate Planning Education Planning Income Planning Charitable Giving Business Planning Elder Care Planning Trust Services Private Banking Source: 1/05 Cerulli Associates Newsletter; Tiburon Research & Analysis Share of Insurance Agents Offering Various Financial Services 4% 27% 60% 60% 60% 56% 92% 90% 87% 96% 96%

various distributors are positioning themselves differently on the consumer affluence curve, with bank brokerage reps low and producer groups high on the curve Insurance sales are more difficult and time consuming than other investment products and as a result many advisors still refer out insurance Key Vendors to the Insurance Agencies, Brokers, & Producer Groups Business This chapter highlights key vendors of the insurance agencies, brokers, & producer groups business Independent Broker/Dealers, Custodians, & Clearing Brokers This section outlines the key independent broker/dealers, custodians, & clearing brokers Consumers can purchase insurance products through multiple channels, including insurance agents, insurance Insurance Ag en ts broker/dealers, and web Insurance Insurance In su rance Agents Agents Broker/Dealers site Producer Groups Distribution insurance companies now use one or more of three distribution models, Source: Tiburon Research & Analysis including captive, independent, and manufacturing only models And it is also important to note that insurance agencies, brokers, & producer groups are positioned at different places on the affluent customer curve Mutual Fund Companies & Other Traditional Product Companies This section outlines mutual fund companies & other traditional product companies -- Fee-Accounts, TAMPs, & Separate Account Managers This section outlines fee-accounts, TAMPs, & separate account managers -- Exchange Traded Funds, Hedge Funds, & Other Investment Product Companies This section outlines exchange traded funds, hedge funds, & other investment product companies -- Wealth Management & Family Office Service Product Companies This section outlines wealth management & family office service product companies -- Technology Companies & Other Key Vendors Consumers Can Purchase Insurance Products Through Multiple Channels, Including Insurance Agents, Insurance Broker/Dealers, and Web Sites Insurance Industry Distribution Channels Consumers Insurance Broker/Dealers Pro ducer Groups In su rance Broker/Dealers Insurance Product Companies Web Site Web S ite Direct Web Site 20

This section outlines technology companies & other key vendors -- Future Predictions for the Insurance Agents, Brokers, and Producer Groups Market This section outlines future predictions for the insurance agents, brokers, and producer groups market. -- Executive Summary The following paragraphs, pulled from the body of this report, include the critical points for all readers. Evolution of the Insurance Agencies, Brokers, & Producer Groups Business This chapter outlines the evolution of the insurance agencies, brokers, & producer groups business Market History This section recaps the market history of the insurance agencies, brokers, & producer groups business. Northwestern Mutual was founded by New York Trader John Johnston as the Mutual Life Insurance Company of the State of Wisconsin in 1857. The firm was based in Janesville, WI and led by its CEO John Johnston. Northwestern Mutual was Founded by New York Trader John Johnston as the Mutual Life Insurance Company of the State of Wisconsin in 1857 Comments Founded in 1857 Founded as Mutual Life Insurance Company of the State of Wisconsin Founded by John Johnston Based in Janesville, WI CEO: John Johnston Source: 1/27/09 International Directory of Company Histories Web Site; 3/27/07 P R Newswire; 12/18/08 Northwestern M utual Web Site; 12/08/08 Northwestern Mutual Web Site; 6/8/05 Capital Markets Consultants Conversation (Mendelson); 4/27/05 Northwestern Mutual Web Site; Tiburon Research & Analysis Market Definition This section outlines the market definition of the insurance agencies, brokers, & producer groups business Market Growth This section highlights the market growth of the insurance agencies, brokers, & producer groups business Key Issues This section highlights the key issues of the insurance agencies, brokers, & producer groups business Reps utilize a wide variety of annuity companies, with Nationwide (Best of America), sun America, and American Skandia being the leaders. Specifically 65% utilize Nationwide, 53% Sun America Total Firm Revenues Nationwide, SunAmerica, and American Skandia are the Leaders Across All Rep Sizes $ 1 M il li on + $ 6 0 0,0 0 0 - $ 9 9 9, 9 9 9 $ 3 0 0,0 0 0 - $ 5 9 9, 9 9 9 21 $ 0 - $ 2 9 9,9 9 9 Annuity Companies Utilized By Rep Size N a t io n w id e S u n A m e r ic a R e t i r e m e n t M a r k e t s A m e r i c a n S k a n d i a P a c i f i c L if e H a r t f o r d L in c o ln N a t io n a l M a n u li f e P u t n a m S c u d d e r K e m p e r S u n L if e o f C a n a d a ( M F S ) A I G 0 % 2 0 % 4 0 % 6 0 % 8 0 % Source: 7/01 Independent Rep Best Practices Survey; Tiburon Research & Analysis

Retirement Markets, and 52% American Skandia. Nationwide, Sun America, and American Skandia are the leaders across all rep sizes. AIG leads in utilization at the AIG Advisor Group broker/dealers but other insurance companies lead elsewhere; Pacific Life dominates at MSC. Insurers have some of the most recognizable brand names in the financial industry, but are not associated with top-flight asset management. Genworth Financial Wealth Management Reports Serving the Most Insurance Companies, But Many Speak of Brinker Capital and Independent Portfolio Consultants in the Insurance Market TAMPs By Number of Insurance Companies Served Insurers are positioning as retirement specialist and employing sub-advisors such as Sun America. Genworth Financial Wealth management reports serving the most insurance companies, but many speak of Brinker Capital and independent portfolio consultants in the insurance market.. Genworth Financial Wealth Management Loring Ward SunGard Lockwood Advisor Port Russell Investment Group Source: 2/5/02 Assante Conversation (Potts); Tiburon Research & Analysis 1 1 2 2 3 17 Brinker Capital is the most widely used TAMP amongst insurance companies. There are a few drawbacks to the insurance industry as well, especially regarding time to market. May not be very sophisticated outside of VAs and VUL and may not even think market- products are a good idea for their clients. Not involved yet in managed accounts because the state of managed accounts is difficult for some commissionoriented people; and few naturally understand the process relationships in a fee-model. May have to do a lot of missionary work with lots of plane tickets needed; RunMoney needs to determine if it has the ability to sustain itself that long; and Channel needs more maturity. RunMoney probably shouldn t bank its whole future on this industry; got to go kill something soon. Both potential size and speed to market define the attractiveness of new markets. Both Potential Size and Speed to Market Define the Attractiveness of New Markets High Potential Size of Opportunity (Market Size Less Captured) Low Slow Family Offices Target Market Evaluation Attorneys Insurance Companies Banks Speed to Market RBDs Wirehouses IBDs RIAs Fast Bigger is not always better for insurance brokers. Some small Source: 7/17/01 RunMoney Conversation (Gregg); Tiburon Research & Analysis 22

to mid-size companies have grown fed up with a lack of personal service from large insurance brokerages. Leading Captive & Independent Insurance Agencies, Brokers, & Producer Groups This section highlights the leading life firms in the insurance agencies, brokers, & producer groups business Largest fee-based employee benefit firms in the San Francisco Bay Area include Watson, Wyatt Worldwide, Tower Perrin, and others. Specifically, Watson Wyatt Worldwide has 115 and Towers Perrin has 54 employees. Largest Fee-Based Employee Benefit Firms in the San Francisco Area Include Watson, Wyatt Worldwide, Tower Perrin, and Others (Page 1) W a t s o n W ya tt W o r ld w id e Tow er s Pe rrin T h e S e g a l Co. H e w it t As s o c ia te s San Francisco Fee-Based Employee Benefit Firms Employees 30 35 54 1 15 Largest insurance brokers by number of reps include Willis insurance and Lockton Insurance. Specifically, Willis Insurance has 13,500 and Lockton Insurance has 1,173 reps. A r th u r A n d e r s e n L L P 2 3 R o s s G o r d o n & 20 A s s o c ia t e s, In c. P e n s io n D y n a m ic s 12 C o r p. C o a te s K e n n e y, In c. 5 C a r e C o u n s e l 5 IS N e t, In c. 3 Source: 11/23/00 San Francisco Business Times; Tiburon Research & Analysis Top property & casualty insurance providers in terms of net premiums written include State Farm Group and Allstate Insurance Group. State Farm has $35 billion and Allstate has $18 billion net premiums. Largest insurance agencies by revenues generated include Marsh & McLennan & Willis Insurance Services, with the leader generating over twice as much as the next competitor. The top ten US insurance brokers by revenues include Marsh & McLennan and Aon Group, with the leader generating almost twice as much as the next competitor. Largest Insurance Agencies by Revenues Generated Include Marsh & McLennan & Willis Insurance Services, With the Leader Generating Over Twice as Much as the Next Competitor Marsh & McLennan Willis Insurance Services Insurance Agencies By Revenues ($ Millions) $2,300 $5,600 Largest fee-based employee benefit firms in the San Francisco area include Watson Wyatt Worldwide, Towers Perrin, and others. ABD Insurance Keenan & Associates ISU Insurance Services Arthur Gallagher Heffernan Group Woodruff-Sawyer Andreini & Company Tanner Insurance $165 $104 $96 $85 $55 $48 $31 $27 Market Segmentation This section explains the market segmentation of the insurance agencies, brokers, & producer groups business Source: 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis 23

Historically, insurance products were only distributed by insurance agents but this has changed substantially. Historically, insurance sales were plain and simple, as insurance agents were all fulltime & captive, they only sold insurance, and there were no part-time insurance agents. Most insurance professionals now exist in one of three models, including the captive agents model, independent agents model, and the producer group model. However, there are pros and cons to each model. The pros to the captive agents model are the excellent training, subsidized resources, and incentives and benefits. Cons include representing companies, product limitations, and no capitalization potential. Pros for the independent agents model include representing clients, not companies, and access to a broader product spectrum. Cons are the high cost of technology and systems required for dealing with multiple companies, high cost of staff training and development, no real influence with carriers and vendors, and little capitalization potential. Producer group pros are representing clients, not companies, access to a broader spectrum and creative marketing ideas, and increased compensation. However some cons are focus is limited to life insurance solutions, lack of institutional market presence, and unproven capitalization potential. Some Life Insurance Companies With Captive Sales Forces Allow their Agents to Sell Non-Proprietary Products Non-Proprietary Products 40% Proprieta ry Products 60% Source: 11/25/00 Bain & Company Presentation (Doe); 11/22/00 Travelers Insurance A dvertisem ent; 11/13/00 HD Vest Conversation (S mith); 11/11/99 Investment News; 9/99 Bank Investment Marketing; 7/99 Annuity Market News; 4/19/99 Investment News; 9/98 AdvisorTech Meeting (M ccarthy); 9/9/98 Freemark Memorandum (Bergman); Tiburon Research & Analysis Life Insurance Agents by Product Mix Some life insurance companies with captive sales forces allow their agents to sell nonproprietary products. For example many life insurance companies allow their agents to sell 40% non-proprietary products. Insurance companies are rushing to build investment programs to gain a share of the market for high net worth households, currently dominated by full-service brokers and banks. And insurance agents now offer a wide variety of financial planning services, with almost all offering insurance planning services and individual retirement accounts. 96% of insurance agents offer individual retirement accounts, and 96% also offer insurance planning services. And Insurance Agents Now Offer a Wide Variety of Financial Planning Services, With Almost All Offering Insurance Planning Services and Individual Retirement Accounts Share of Insurance Agents Offering Various Financial Services Individual Retirement Accounts Insurance Planning Services Investment Planning Estate Planning Education Planning Income Planning Charitable Giving Business Planning Elder Care Planning Trust Services 27% 60% 60% 60% 56% 92% 90% 87% 96% 96% Private Banking 4% 24 Source: 1/05 Cerulli Associates Newsletter; Tiburon Research & Analysis

Training will be a key component in the shift of insurance companies selling investment products. Agents may be the most in need of training in investments as they know the sales process and have clients already. Just like in the brokerage business, many new distribution models have emerged in the insurance business. For example, besides going straight from the insurance company to independent agents, there are four intermediaries utilized as well. Some agents go through captive non-office general agents, whereas others go through producer groups who subsequently go through independent broker/dealers. This is of course, if consumers are not reached by captive insurance agents first. Just Like in the Brokerage Business, Many New Distribution Models Have Emerged in the Insurance Business Source: Captive Office GA Captive Agents Distribution Channels in the Insurance Industry The NW ML Model Captive Non-Office GA The B ranch Office Model Life Insurance Company 12/27/00 FSC Rep Conversation (Lovejoy); Tiburon Research & Analysis IBD/IGA The HD V est or MSC Model The Old M Group Mod el Produ ce r Group s Independent Agents The Personal Producer General Agent Model Non-IBD IGA The Centrelink Model Key Vendors to the Insurance Agencies, Brokers, & Producer Groups Business This chapter highlights key vendors of the insurance agencies, brokers, & producer groups business Independent Broker/Dealers, Custodians, & Clearing Brokers This section outlines the key independent broker/dealers, custodians, & clearing brokers. Consumers can purchase insurance products through multiple channels, including insurance agents, insurance broker/dealers, and web site. Insurance agencies, brokers, & producer groups have been trying to enter the investments business for a decade. In the IBD industry, up-front product commissions contribute 50% to the average reps income while investment advisory fees and trailers are an additional 20-25% each. Up-front product commissions seem to give way to some more investment advisory fees with the larger reps except the very Consumers Can Purchase Insurance Products Through Multiple Channels, Including Insurance Agents, Insurance Broker/Dealers, and Web Sites Insurance Agents Source: Insurance Ag en ts Producer Groups Tiburon Research & Analysis Insurance Industry Distribution Channels Insurance Agents Trailing Product Commissions 20% In su rance Broker/Dealers Consumers Insurance Broker/Dealers Pro ducer Groups In su rance Broker/Dealers Web Site Web S ite Direct Web Site In the IBD Industry, Up-Front Product Commissions Contribute 50% to the Average Reps Insurance Product Companies Income While Investment Advisory Fees and Trailers are an Additional 20-25% Each Reps Compensation By Compensation Type Hourly & Other Fees 6% Up-Front Product Commissions 50% 25 Investment Advisory Fees 24% Source: 7/01 Independent Rep Best Practices Survey; Tiburon Research & Analysis

largest which may be groups of smallers reps. Three-quarters of consumers do business with more than one insurance company. Business generally select their insurance brokers based on breadth of service, reputation, & global expertise. Mutual Fund Companies & Other Traditional Product Companies This section outlines mutual fund companies & other traditional product companies Fee-Accounts, TAMPs, & Separate Account Managers This section outlines fee-accounts, TAMPs, & separate account managers Exchange Traded Funds, Hedge Funds, & Other Investment Product Companies This section outlines exchange traded funds, hedge funds, & other investment product companies Wealth Management & Family Office Service Product Companies This section outlines wealth management & family office service product companies Technology Companies & Other Key Vendors This section outlines technology companies & other key vendors Future Predictions for the Insurance Agents, Brokers, and Producer Groups Market This section outlines future predictions for the insurance agents, brokers, and producer groups market. Tiburon Strategic Advisors Tiburon Strategic Advisors was formed in 1998 to offer market research, strategy consulting, & other related services primarily to financial services firms. Three of Tiburon's core clientele groups are the CEOs and other senior executives of large US financial institutions faced with difficult strategic decisions, leading executives of foreign financial institutions trying to understand and/or enter the US markets, and a long list of venture capital & private equity firms, and investment banks, making investments in, and executing transactions in, areas where Tiburon has developed proprietary insights. The firm has served over 300 corporate clients and completed over 1,200 projects since its founding, and today, its knowledge base includes mutual fund distribution, separately managed account programs, alternative investments, wealth management, insurance products, banking services, the fee-based financial advisor market, the CPA firm market, the family office market, and various international markets. Research Report Series This report is part of the Tiburon Strategic Advisors Research Report Series, which is comprised of a growing number of in-depth reports covering a wide range of topics in the banking, insurance, brokerage, and investment management markets. Tiburon s Research Reports are published in two series. One series is aimed towards Financial Institutions and the other towards Financial Advisors. The Financial Institutions Series reports are macro-industry reports that cover topics such as the mutual funds industry, the full-service brokerage industry, and the registered investment advisor industry. Reports in the Financial Advisors Series are more tactical reports, which include topics 26

such as Fee-Based Financial Advisor Best Practices and Succession Planning & the Growing Acquisition Market. Research Report Access Program Many long-time Tiburon clients subscribe to the firm's research report access program, which allows unlimited online access to all of its research reports for all of a company's employees for an entire calendar year for just one $25,000 subscription. This service has helped numerous Tiburon clients share Tiburon research widely and consolidate their research purchases. Sponsored Research Reports Numerous Tiburon clients have sponsored research reports ($35,000), which entitles them to widely distribute the reports to their employees and/or clients. Tiburon also retains the rights to offer these reports for sale. Research Report Refund Policy Periodically (far less than 1% of the time after hundreds of purchases), Tiburon research report purchasers have sought refunds, which has caused hardship and wasted time for Tiburon, hence the following policy now exists for all Tiburon research report purchases. Tiburon is unable to make any financial refunds for reports. Both fulfilling reports and processing refunds take up Tiburon time, and given that the reports are written as a low cost accommodation service, Tiburon needs to manage its time well, prioritizing market research & strategy consulting clients. Furthermore, given that reports are delivered electronically, returns are impractical. If it helps, Tiburon will attempt to send replacement reports (either the next version of the same report or another report all together) as long as invoices are paid promptly under the terms of the original order (net 30 days). That said, please observe three suggestions before ordering any Tiburon report: First, be sure to look at the summaries and attached table of contents for the report(s) of interest. These are created by Tiburon research staff to best represent the reports to potential purchasers. Sending specific pages is time consuming and unreasonable but the detailed table of contents show pretty clearly the topics covered. Second, please ensure that no other executive at your firm has ordered the same report; Tiburon is willing to allow the internal sharing of its reports by purchasers, but purchasers need to take responsibility to confirm any prior purchases within their firms as the growing complexity of financial services firms makes it impractical for Tiburon to track any firm's subsidiaries and their respective purchases. Finally, please remember that the totality of the report is the offering. If there is a graph that is unreadable because of the smaller font size required for printing, please bring it to the firm's attention and a full-size version will be sent, but please do not seek a refund on a report purchase that you have received. Contacting Tiburon Strategic Advisors Tiburon Strategic Advisors is located in Tiburon, California (just over the Golden Gate Bridge from San Francisco) and can be reached at (415) 789-2540. Feel free to contact any of us. 27

Best of luck to all! Travis Biziorek Research Manager Tiburon Strategic Advisors Chip Roame Managing Principal Tiburon Strategic Advisors 28

A SYNOPSIS OF FINANCIAL SERVICES INDUSTRY MARKETS & DISTRIBUTION CHANNELS Before addressing the core content of this report, a synopsis of financial services industry markets & distribution channels is included below to offer some perspective. Online Tools & Advice This section outlines retail banks. Between 1995 and 2000, the internet penetration in the United States tripled from less than 15% to almost half of households. Between 1995 and 2000, the Internet Penetration in the United States Tripled From Less Than 15% to Almost Half of Households US Household Internet Penetration There are 239 million personal computers in use, up nearly 8,000% since 1980 and 30% since 2000. Households Without Internet 86% 64% 52% There are 1.0 billion personal computers in use worldwide, up more than 20,000% since 1980 and 80% since 2000. Households With Internet 14% 36% 48% 1995 1998 2000 Source: 11/21/05 Pew Internet & American Life Project Web Site; Tiburon Research & Analysis 270 million personal computers are sold worldwide each year, up 67% since 2003. The share of US population with internet connectivity has steadily grown from 44% in 2000 to 73% in 2008. The Share of US Population with Internet Connectivity Has Steadily Grown from 44% in 2000 to 73% in 2008 US Population By Propensity to Have Internet Connectivity Broadband connections now account for 90% of all internet connections, up from 30% since 2007. No Internet Connection 56% 50% 42% 41% 31% 32% 30% 27% 69% 68% 70% 58% 59% Morningstar is the most popular 50% Internet Connection 44% financial planning software product across revenue ranges. 2000 2001 2002 2003 2004 2005 2007 2008 Its most dominant position is Sourc e: 9/29/08 Inter net World Stats Web Site; Tiburon Resear ch & Analy sis with the smallest reps, where its utilization is almost 60% and its nearest competitor is closer to 30%. Financial Profiles does well amongst all segments except the largest independent reps. CheckFree/Mobius does well amongst the largest reps. Morningstar Advisor is the most widely visited web site across most broker/dealers, including American Express, LPL, Royal Alliance, SunAmerica Securities, FSC, and 73% 29

Sentra-Spelman. Raymond James reps show a preference for Yahoo Finance; MSC reps show a preference for CNBC; and Advantage Capital reps show a preference for Smart Money. Online Brokerage This section outlines online brokerage. In the late 1990s, online brokerage firms were predominantly taking accounts away from the traditional competitive playing field, with only 10% of accounts from new investors. Specifically, in 1999, only 12% of clients that hired an online brokerage firm were new to the investing world. Conversely, 34% of accounts were won from a full-service brokerage, 39% from an existing online brokerage relationship, and the remaining 15% from some other type of financial institution (such as banks, mutual fund shops, insurance companies, et al). In the Late 1990s, Online Brokerage Firms Were Predominantly Taking Assets Away From the Traditional Competitive Playing Field, With Only 10% of Assets From New Investors 1999 New Online Brokerage Accounts by Source Existing Discount Brokerage Clients 39% Accounts From Banks, M utual Funds, or Other Financial Institutions 15% Source: 3/01 Cerulli Presentation (O Donnell); Tiburon Research & Analysis New Clients 12% Full-S ervice Brokerage Clients 34% The number of discount brokerage firms has now slipped below the 50 mark, down about 35% from the peak of 77 in 2002. Among the Big Five firms, Scottrade offers the lowest flat market order commission to clients at $7, 30% lower than its nearest competitor. In second place is TD Ameritrade at $10.99. From there, it goes E*Trade at $12.99, then The Charles Schwab Corporation and Fidelity Investments at $19.95. Among the Big Five Firms, Scottrade Offers the Lowest Flat Market Order Commission to Clients at $7, 30% Lower Than Its Nearest Competitor Big Five Online Brokerage Firms Online Flat Stock Market & Limit Order Commission (1,000 Shares or Less) Scottrade TD Ameritrade E*Trade Charles Schwab & Company Fidelity Investments $7.00 $10.99 $12.99 $19.95 $19.95 Source: 2/06 AAII Newsletter; 4/30/05 Wall Street Journal; 2/05 AAII Newsletter; 6/7/04 Barron s; 2/04 AAII Newsletter; Tiburon Research & Analysis E*Trade offers the cheapest margin of the Big Five brokerage firms, again trailed closely by Scottrade. E*Trade charges 9.49% for a $7,500 debit balance, while Scottrade charges 9.75%, TD Ameritrade charges 10.00%, and Fidelity 10.33%. The Charles Schwab Corporation has the priciest margin, at 11.00%. 30

Three of the Big Five online brokerage firms have substantial bank businesses, led by E*Trade and trailed by The Charles Schwab Corporation and TD Ameritrade. E*Trade s banking business is known for its cutting edge integration across brokerage and banking, which is widely considered to be the most advanced in industry. Its E*Trade Complete offer allows clients to transfer money to and from accounts, either at the firm or not. Further, the Big Five are also heavily engaged in offering mortgages (through their banking units) and insurance. In insurance, Fidelity Investments owns Insurance.Com, which is one of the largest online distributors of auto insurance in the US. Fidelity Investments dominates the Big Five in nearly every category when it comes to total business. Fidelity has a total of 12.2 million total accounts (The Charles Schwab Corporation has 7.2 million, TD Ameritrade has 6.0 million, E*Trade has 4.3 million, Scottrade has 1.4 million, and the rest of the industry is estimated to have 3.0 million). It has a total of $2.459 trillion in total assets under administration, far above The Charles Schwab Corporation ($1.3 trillion), TD Ameritrade ($256 billion), E*Trade ($187 billion), Scottrade ($44 billion), and all other online brokerage firms (estimated to have $100 billion). Fidelity generates approximately $10.5 billion in total revenues across its businesses, which is double #2 The Charles Schwab Corporation ($5.2 billion), and well ahead of TD Ameritrade ($2.0 billion), E*Trade ($2.6 billion), and Scottrade (estimated at $300 million), and all other firms (estimated at $500 million). When including its clearing & 401K assets, Fidelity Investments has a huge lead in total assets. Specifically, The Charles Schwab Corporation (including its large institutional & other businesses) controls 30% of industry assets, and Fidelity Investments controls 57% (largely due to the more than $1 trillion managed in its mutual fund business, and $500 billion at National Financial, its clearing house). Conversely, the Big Three-to-Five have a significantly smaller share of the pie, due to their much lesser participation in the clearing, custody, proprietary mutual fund, and 401K markets. TD Ameritrade has 6% of the assets, E*Trade has 4%, and Scottrade has only 1%. All other firms are estimated to control less than 5% of the asset pie when all businesses are included. Online Banking & Mortgages This section outlines online banking & mortgages. When Including Its Clearing & 401K Assets, Fidelity Investments Has a Huge Lead in Total Assets Total Assets by Online Brokerage Firm TD Ameritrade 6% E*Trade 4% Fidelity Investments 57% Scottrade 1% Other Firms 2% Charle s Schwab & Company 30% Source: 3/30/06 Hoover s Web S ite; 3/29/06 The Charles S chwab Corporation Web S ite; 3/29/06 Fidelity Investm ents Web S ite; 3/29/06 TD Ameritrade Web Site; 3/29/06 E*Trade Web Site; 3/29/06 Scottrade Web Site; Tiburon Research & Analysis 31

The number of banks charging online banking fees dropped drastically between 1999 and 2000, to only a third of them. In 1999, two-thirds of banks charged a fee for online access to their accounts. In 2000, that share was cut in half, to only 33% of banks. The top ten online banks now have nearly 35 million customers, up 100% since 2002. Specifically, in 2002 the top ten online banks collectively counted 17 million customers. That figure grew to 20 million by 2003, up to 24 million in 2004, and jumped again to 34 million in 2005. Not surprisingly, younger people are much more likely to bank online than the elder generations. Specifically, 86% of internet users between the ages of 18 and 35 use online banking. 83% of those internet users between the ages of 36 and 49 use online banking. 78% of those between 60 and 64 use it. Finally, 57% of internet users above the age of 65 use online banking. Not Surprisingly, Younger People are Much More Likely to Bank Online than the Elder Generations Do Not Bank Online Bank Online 14% 17% 86% 83% Banking Usage By Age Range 22% 78% 43% 57% Bank of America is the top online bank, with over thirteen million customers banking online. Wells Fargo is about half as successful, with 6.5 million online customers. Both are trailed by JP Morgan Chase (3.2 million customers), Wachovia (2.6 million), and Washington Mutual (2.1 million). Interestingly, ING Direct is competing with the big traditional banks after only a handful of years, with 2.5 million customers effectively tying Wachovia, and leading Washington Mutual. Ages 18-34 Ages 35-49 Ages 50-64 Ages 65+ Source: 3/06 American Banker (Synergistics); Tiburon Research & Analysis Whereby Virtually All Consumers in 2001 Would Use Online Functionality For Auto Insurance, Less Than 5% Would Actually Apply Online Online Insurance This section outlines online insurance. Consumer Interest in Auto Insurance Online No 12% Whereby virtually all consumers in 2001 would use online functionality for auto insurance, less than 5% would actually apply online. Specifically, in 2000, 88% of consumers reported that they would use the online functionality offered by insurance companies. However, only 5% said that they would actually purchase a policy online. The argument for online service is centered on lowering cost; a simple administrative customer service task such as checking on a claim could cost a company more than Yes 88% Would Use Online Functionality Source: 6/8/01 Adv isor Products P resentation (Gluc k) (Forr ester Res earch) ; Tibur on Res earch & A nalysis 96% 4% Would Apply For Online 32

twenty times what it would to be handled online. Specifically, to handle an administrative insurance task, a company could spend $20 for an average ten minute phone call, and includes the cost of labor, real estate, and maintenance costs for the center. Conversely, empowering the consumer to handle the task themselves online would cost the company as little as $1. Retail Banks This section outlines retail banks. Retail banks emerged shortly after the US was founded and held steadfast as the largest financial service companies until the 1980s, when they were challenged by full-service & discount brokers, the market slow down, and now their own strategies. The Glass Steagall Act was adopted in 1933. The Act prevents banks from underwriting stocks and bonds. This gentlemanly division of labor was designed to make sure that a catastrophic failure in one part of the finance industry did not invade every other part. The Act was named after its authors Virginia senator Glass and Alabama congressman Steagall. There are 11,426 broadly defined retail banks, including 7,426 traditional retail banks plus 1,000 savings & loans and 3,000 credit unions. There are 154,250 broadly defined retail bank branches, including 94,250 belonging to traditional retail banks and another 60,000 belonging to savings & loans and credit unions. Broadly defined retail banks generate $60.0 billion revenues, including $45.0 billion by traditional retail banks. There are 154,250 Broadly Defined Retail Bank Branches, Including 94,250 Belonging to Traditional Retail Banks and Another 60,000 Belonging to Savings & Loans and Credit Unions 39.3 Federally Chartered Retail Bank Branches Broadly Defined Retail Bank Branches (Thousands) 30.0 State Chartered Retail Bank Branches 5.0 Foreign Bank With US P resence Branches 74.3 Traditional Retail Banks 10.0 Savings & Loans Branches 30.0 Credit Union Branches 114.3 Broadly Defined Retail Banks Broadly defined retail banks earn $9.1 billion, including $6.8 billion by traditional retail banks. Sourc e: Tiburon Researc h & Analys is There are 7,426 traditional retail banks, down 50% since 1990. There are 39,300 federally chartered retail bank branches, down 50% since 1990. There are 1,143,000 broadly defined retail bank employees, down 50% since 1990. Traditional retail banks have $9.0 trillion assets. 33

Historically banks have had two conflicting channels their broker/dealers and trust departments. The bank broker/dealers traditionally serve mid-market clients, sell thirdparty mutual funds, and often offer better services at lower prices than bank trust departments. Bank trust departments traditionally serve high net worth clients, sell internal separately managed account and consider themselves investment managers and customer advisors. They are generally better at providing ongoing financial planning services but typically do not give clients a lot of choice in what they do. They control $1 trillion of assets under management, and there are 100,000 bank trust officers. Another source said that some banks establish artificial dividers at $100,000 in client investable assets. Size has some benefits as well as some drawbacks. Some pros of size are diversification of sources of income, geography, products, and costs can be spread across a larger base. The bank is able to make justified technology investments in call centers, mortgage servicing, branches, and ATMs. Problems such as poor loans and regulatory fines have less of an impact. It is easier for banks to produce consistent service, offer competitive pricing, and offer geographic convenience. Cons of size are that a big bank is difficult to manage efficiently. They are more subject to litigation and regulatory scrutiny. They are less nimble than smaller rivals. There is no evidence that efficiency or profitability increases with size. It is difficult to spread a uniform culture. Industry giants in other industries tend to undercut each other and lose money in the process. After a decade of mergers & acquisitions, retail banks and other financial services companies have now spun off some asset management firms. The aggregate valuation of foreign financial institutions acquisition of retail banks is $8.3 billion, up 20% since 2001. Citigroup, Bank of America, and JP Morgan Chase are the largest banks in assets, each 500-700% bigger than even the 10th largest bank. Another source said that the top three US Banks control more than 40% of the industry s assets; another source noted that Citigroup has 18% of the total assets of the 50 largest US The Aggregate Valuation of Foreign Financial Institutions Acquisition of Retail Banks is $8.3 Billion, Up 20% Since 2001 Foreign Financial Institutions Acquisitions of Retail Banks Aggregate Valuation ($ Billions) banks, with the 50 totaling $5.7 trillion; several foreign banks can also claim huge US assets Deutsche Bank at $312 billion, ABN Amro at $287 billion, and HSBC at $204 billion; Bank of America and JP Morgan Chase were propelled over the $1 trillion mark with mergers (Fleet Boston and Bank One, respectively). Bank broker/dealers may be the ultimate winning channel as separately managed accounts with lower minimums are created, and at the same time, higher-end brokers are recruited and broker/dealers acquired. $7.3 $0.3 $0.2 $5.1 $3.5 $8.3 2001 2002 2003 2004 2005 2006 Source: 1/20/08 Thomson Financial Analysis; 9/04 US Banker; Tiburon Research & Analysis 34

Banks will likely grow their separately managed accounts business, but they will likely not capture market share nor will separately managed accounts ever surpass proprietary management. Full-Service Brokerage Firms This section outlines full-service brokerage firms. The typical broker is 44 years old. Over three quarters of brokers are male. Almost all brokers have series seven licenses, with only ten percent not obtaining the license. Over half of all brokers have a bachelors degree and some have continued their education to include graduate degrees and advanced professional qualifications. Almost onequarter have graduate degrees and almost one-fifth have various advanced professional qualifications. Over Three Quarters of Brokers are Male Wirehouse, Other National, Regional, & Boutique Broker/Dealer Brokers Licensed by Gender Female 17% Male 83% Source: 6/03 Registered Rep; Tiburon Research & Analysis More experienced brokers make more money, with the most experienced making over $240,000 per year, and the least experienced making less than More Experienced Brokers Make More Money, With the Most $74,000. Experienced Making Over $240,000 Per Year There are now over 5,000 brokerage firms, up over 100% in the past twenty five years. Today, brokerage firms employ almost 700,000 series 7 registered individuals, compared to just 181,000 30 years ago. Wirehouse, Other National, Regional, & Boutique Broker/Dealer Brokers Mean Compensation by Years of Experience ($ Thousands) $74 $136 $174 $213 $243 There are four key trends in the Less Than 5 5-9 10-14 15-19 20 or More full-service brokerage industry, Years Experience including impact of short-term Note: The mean levels are $59,000, $111,000, $135,000, $122,000, and $141,000 for the same ranges Source: 6/03 Registered Rep; Tiburon Research & Analysis challenges, repositioning of core offers, custom recruiting and compensation, and new models emerging. The impact of short-term challenges include a depressed market, repeated industry stumbles, low account returns, and an increased number of arbitration cases. Repositioning of core offers involves declining 35

commissions, fewer proprietary products, increased a high net worth focus, increased focus on financial planning, fee-accounts, and wealth management, and improved reporting. Custom recruiting and compensation means varying recruiting strategies, decreased compensation, and focused compensation plans. New models emerging include other national firms, regional brokerage firms, and semi-independent models. Independent Reps This section outlines independent reps. The independent broker/dealer & independent rep market emerged out of the life insurance industry in the 1960s to 1980s, which has been followed by periods of rapid consolidation, firm restructurings, and maturation & reconsolidation. The independent broker/dealer market is difficult to measure because of the great number of small independent broker/dealers & substantial number of low producing parttime reps, and their other overlapping definition with both insurance agents and feebased financial advisors. The independent broker/dealer market can be defined to include traditional independent broker/dealers, insurance broker/dealers, and/or captive insurance agencies, suggesting a market of 4,800 to 5,000 firms. There are 147,863 broadly defined independent broker/dealer reps, up 4,000 since 2001. There are 34,004 broadly defined independent broker/dealer reps producing more Than $100,000. There are 34,005 Broadly Defined Independent Broker/Dealer Reps Producing More Than $100,000 Broadly Defined Independent Broker/Dealer Reps Producing More Than $100,000 Broadly defined independent broker/dealers generate $11.1 billion revenues, up over 35% since 2001. 27,976 29,374 30,843 32,385 34,005 The average rep s revenues come about half from up-front product commission and lesser amounts from both trailers and investment advisory fees. Upfront 2003 2004 2005 2006 2007 product commissions Sourc e: 4/28/08 Investment News; Tiburon Researc h & Analy sis contribute a little over 50% (53%) to the average independent rep s revenues, while trailers (21%) and investment advisory fees (18%) account for an additional 20% or so each. Hourly & other fees contribute the remaining 8% to the average rep s revenues. Some look at this data and conclude that almost 75% of revenues (74%) are from commissionable products; others look at the same data and observe that this means that almost 40% of revenues (39%) of revenues are from recurring sources. The average rep firm has $37 million in assets under administration; the largest independent reps have more than three times the average assets ($124 million versus 36

S e c u r i t i e s & E x c h a ng e C o mm i s s i o n R eg i s te r e d I n v e s tme n t A d v i s or s S ta t e R e g i s te r e d I n v e s tm e n t A d v i s o r s R e g i s t e re d I n ve s t me n t A d v i s o r s M u tu a l F u n d C o mp a n i e s, I n st i t u t i o n a l Se p a r a te A c c o un t M a n a g er s, H e dg e F u n d s, C a p t i v e C h a n n e l F e e- A c c o u n t P r o g r a ms F e e - B a s e d F i n a n c i a l A d v i s o r s I B D F e e - A c co u n t P r o g r a ms & I B D R e p s w i t h O w n R I A Fe e - O n l y F i n a n c i a l A d v i s o r s T A M P s & F ee - O nl y F i n a n c i a l D A d v i s o r s w i t h o u t i s c r e t i o n "R e a l " F e e - O n l y F i na n c i al A d v i s o r s (S i n g l e C o u n te d D a t a ) N o n - R I A L o o k - A l i k e S e gm e n ts B r o a d l y D e f i n e d F e e - O n l y F i n an c i a l A d v i s o r s $37 million). This is a sizable number, especially in comparison to the smallest reps who on average administer just $11 million. The average independent rep firm generates $437,000 in total revenues; the largest rep firms generate more than five times the average revenue amount ($2.4 million versus $437,000). The smallest rep firms, on average, generate just $101,000 in revenues. Nearly one-third of independent reps hold the Certified Financial Planner designation. Fee-Based Financial Advisors This section outlines fee-based financial advisors. The Merrill Lynch Rule was established in 1999 upon the introduction of its Unlimited Advantage fee-based brokerage account to allow brokers that previously relied solely on commissions to accept fee business without registering as investment advisers. It was created to exempt brokers who offered a fee-based compensation arrangement to brokerage clients from being regulated under the Investment Advisors Act of 1940. The Merrill Lynch Rule seemed to mock the need for fiduciary responsibility. Two methods exist for sizing the fee-based financial advisor market, including counting the underlying firms and counting the custodians. The first method of counting fee-based financial advisors is bottom up, but all databases have issues. Fee-based financial advisor data can be accessed through bottom up registered investment advisor databases available from the SEC & state registration systems, financial information group, & national regulatory services. The second method of counting fee-based financial advisors is top down, but custody business is more widely spread than many believe. The Number of Fee-Based Financial Advisors Ranges from 7,518 to 18,159 Depending on which Segments are Included, with 18,159 Possibly Being the Most Useful Estimate Fee-Based Financial Advisors The fee-based financial advisors market is much broader than that held by the traditional custodians. 10,900 9,600 20,500 2,341 18,159 10,200 7,959 441 7,518 4,300 11,818 Defining the fee-based financial advisor market is difficult for many reasons, including overlapping federal & state registration processes, the fact Source: 10/7/08 Citigroup Analyst Report; 1/08 Registered Rep (Moss Adams); Tiburon Research & Analysis that the registered investment advisor definition includes non-fee-based financial advisors, & the double counting of IBD reps. The number of fee-based financial advisors ranges from 7,518 to 18,159 depending on which segments are included, with 18,159 possibly being the most useful estimate. 37

The Charles Schwab Corporation is the largest custodian for fee-based financial advisors. The top three custodians may control only one-third of fee-based financial advisor assets. Fee-based financial advisors administer a client process which includes client profiling, asset allocation, investment research & selection, vendor participation, portfolio management & reporting, and client billing. Smaller firms are more likely to outsource services while larger firms generally do not outsource their access to securities, separate account management, or asset allocation. Fee-based financial advisors custodian choices are driven primarily by custodians service & technology. Almost all of fee-based financial advisors assets under management are invested in mutual funds, equities, & bonds. Smaller Firms are More Likely to Outsource Services While Larger Firms Generally Do Not Outsource their Access to Securities, Separate Account Management, or Asset Allocation Asset Allocation Access to Separate Account Managers Performance Monitoring S ecurities Access Manager Selection Performance Reporting Back-Off ice Support Services Source: 12/97 Schwab Research Report; Tiburon Research & Analysis Fee-Based Financial Advisors Incidence of Outsourcing Services By Number of Clients 50% 50% 50% 100% 50% 80% 80% 10% 10% 20% 10% 25% 27% 10% 10% 50% 13% 25% 10% 20% 20% 10% 25% 25% 20% 50% 50% 65% 20% 80% 80% 38% 10% 18% 20% <50 50-100 101-250 251-500 501+ Independent reps most often mention using tools provided by their financial planning software and broker/dealer for their sales enabling technology. In Tiburon surveys, ten independent reps mentioned depending on financial planning software presentations as their sales enabling technology, by far the most popular response. Six reps mentioned using presentations provided to them by their broker/dealers. It is unknown whether those presentations are proprietary or private labeled, but it is likely they were private labeled versions of materials provided by providers such as Ibbotson Associates and Kettley. On another note, two respondents mentioned using Microsoft Office as their only presentations technology for client proposals, depending on Excel and Microsoft Word. Insurance Agents This section outlines insurance agents. Reps utilize a wide variety of annuity companies, with Nationwide (Best of America), sun America, and American Skandia being the leaders. Specifically 65% utilize Nationwide, 53% Sun America Retirement Markets, and 52% American Skandia. Genworth Financial Wealth management reports serving the most insurance companies, but many speak of Brinker Capital and independent portfolio consultants in the insurance market. 38

There are a few drawbacks to the insurance industry as well, especially regarding time to market. May not be very sophisticated outside of VAs and VUL and may not even think market- products are a good idea for their clients. Not involved yet in managed accounts because the state of managed accounts is difficult for some commissionoriented people; and few naturally understand the process relationships in a fee-model. May have to do a lot of missionary work with lots of plane tickets needed; RunMoney needs to determine if it has the ability to sustain itself that long; and Channel needs more maturity. RunMoney probably shouldn t bank its whole future on this industry; got to go kill something soon. Largest fee-based employee benefit firms in the San Francisco Bay Area include Watson, Wyatt Worldwide, Tower Perrin, and others. Specifically, Watson Wyatt Worldwide has 115 and Towers Perrin has 54 employees. Largest Fee-Based Employee Benefit Firms in the San Francisco Area Include Watson, Wyatt Worldwide, Tower Perrin, and Others (Page 1) W a t s o n W ya tt W o r ld w id e Tow er s Pe rrin T h e S e g a l Co. H e w it t As s o c ia te s San Francisco Fee-Based Employee Benefit Firms Employees 30 35 54 1 15 Top property & casualty insurance providers in terms of net premiums written include State Farm Group and Allstate Insurance Group. State Farm has $35 billion and Allstate has $18 billion net premiums. CPA Firms This section outlines CPA firms. A r th u r A n d e r s e n L L P 2 3 R o s s G o r d o n & 20 A s s o c ia t e s, In c. P e n s io n D y n a m ic s 12 C o r p. C o a te s K e n n e y, In c. 5 C a r e C o u n s e l 5 IS N e t, In c. 3 Source: 11/23/00 San Francisco Business Times; Tiburon Research & Analysis There are 450,000 Certified Public Accountants, with growth having slowed over recent years. Specifically, there were 448,847 CPAs at year-end 2000 and that number has been increasing at a rate of about 3,000 CPAs per year since 1998. The biggest increase was from 1988 to 1990, with an increase of approximately 31,000 CPAs. There were just 362,397 CPAs as recently as 1988. Of the 450,000 CPAs, a Few More than 175,000 CPAs are in Private Practice or Public Accounting The number of CPAs is relatively large compared to the number of practitioners in other financial markets. The number of CPAs is huge compared to the number of RIAs with a difference of 422,847 and the number compares almost exactly to the 550,000 Series 7 brokers. CPAs in Other Industries 272,451 61% Number of CPAs By Occupation (448,847 CPAs) CPAs in Private Practice 176,396 39% Of the 450,000 CPAs, a few more than 175,000 are in private Source: 1/3/01 HD Vest Conversation (Bellows); Tiburon Research & Analysis 39

practice or public accounting. Specifically, 39% of CPAs are in private practice as opposed to 61% of CPAs who have roles in business, industry, academia, etc. The Big Four CPA firms have 60,000-100,000 employees each, up to six times the number of employees in the largest Group B firms. Of the Big Four firms, Price Waterhouse Coopers leads the way with 97,109 employees followed by Deloitte & Touche with 73,810 employees, KPMG with 69,100 employees, and Ernst & Young with 60,713 employees. Of the Group B firms, BDO Seidman leads with 16,078 employees followed by Grant Thornton with 14,019, employees, and McGladrey & Pullen with 12,775 employees. The vast majority of auditing is still done by the Big Four CPA firms. The Big Four CPA firms perform 90% of all audits for public companies while all other CPA firms account for the remaining 10%. Half of all individual income tax returns are completed by paid preparers. Of the 127.5 million individual income tax returns, paid preparers filed 63.8 million while 63.7 million were selfprepared. The Vast Majority of Auditing is Still Done by the Big Four CPA Firms Public Company Audit Market by Size of CPA Firm Performed by Other Firms 10% Performed by Big Four CPA Firms 90% Source: 9/21/03 Accounting Today (General Accounting Office); 11/15/99 Wall Street Journal; Tiburon Research & Analysis Of the 340,000 members of the AICPA, at least 90,000 provide some type of financial planning services to their clients. Specifically, 90,000 or 30% provide financial planning services while 250,000 or 70% do not. This graph may tell an inaccurate story as only 170,000 CPAs are in public accounting so it may be that 90,000 of 170,000 (or over 50%) do offer the services. One source claimed that the 90,000 AICPA members who provide financial planning range from CPAs who help family members with financial planning questions to having a full financial advisory practice. The majority of CPAs have less than $25 million in investable assets; this may be explainable by the part-time nature of this business for most CPAs. Specifically, 6% of CPA financial advisors do not have any AUM, 47% have under $25 million, 6% have $25 million to $49 million, 13% have $50 million to $99 million, 19% have $100 million to $249 million, and 9% have $250 million and up. Estate Attorneys This section outlines estate attorneys. Real Estate Agents This section outlines real estate agents. Mortgage Brokers This section outlines mortgage brokers. Upscale Channels 40

This section outlines upscale channels. The upscale channels industry includes 74 firms. The upscale channels firms serve just over 22,000 clients. The upscale channels firms have $35.2 trillion assets under administration. The upscale channels firms generate $24.2 billion in revenues. Processing banks account for the greatest number of employees in the upscale channels with nearly 70,000 employees. Processing Banks Account for the Greatest Number of Employees in the Upscale Channels with Nearly 70,000 Employees Upscale Channels Firms Employees By Market Processing Banks 68,681 Investment banks and boutique brokerage firms are one of the most well-known channels in the upscale channels industry. There are approximately 114 offices, 51,080 employees, $968 billion assets under management, $16.5 billion revenues, and $11.3 billion net income in the investment banking & boutique brokerage business. Sourc e: Tiburon Resear ch & Analy sis Institutional Channels This section outlines institutional channels. I nve stment Banks & Boutique Broke rage Firms English Speaking Countries Markets This section outlines English speaking countries markets. Priva te Bank Se parate Account Managers Investment Consulta nts Sports Age nts & Business Managers Famil y Offices 14,653 51,080 Canada has the largest area in the English speaking markets, slightly larger than the US; Australia & New Zealand are nearly as large as the US. Specifically, Canada has a market area of 5.9 millions of square miles, US has a market area of 5.7 millions of square miles, Australia & New Zealand has a market area of 4.8 millions of square miles, South Africa has a market area of 0.6 millions of square miles, and the United Kingdom and Ireland has a market area of 0.2 millions of square miles. Canada Has the Largest Area in the English Speaking Markets, Slightly Larger Than the US; Australia & New Zealand Are Nearly as Large as the US United Kingdom & Ireland English Speaking Countries Market Area By Country (Millions of Square Miles) Canada US Australia & New Zealand South Africa 0.2 0.6 Source: 6/6/06 CIA Web Site; 3/29/05 Economist Web Site; 3/16/00 CIA World Factbook Web Site; 2/13/00 New York Times; 12/99 The Europe World Yearbook; Tiburon Research & Analysis 4.8 5.7 5.9 41

US consumer wealth dwarfs that of the United Kingdom & Ireland, with about over four times the assets. Specifically, the US has $17.1 trillion in assets, while the United Kingdom & Ireland have about $4 trillion. The British high net worth & ultra-high net worth classes control nearly three-quarters of financial assets. The moderate net worth class controls $352 billion total, the high net worth class $487 billion and the ultra high net worth class $433 billion. The British High Net Worth & Ultra-High Net Worth Classes Control Nearly Three-Quarters of Financial Assets $352 $487 $433 Moderate Net Worth High Net Worth Ultra-High Net Worth Source: 11/29/98 London Sunday Times; Tiburon Research & Analysis Assets Controlled by Asset Class ($ Billions) By 2050, the margin between the United Kingdom population over the age of 65 and that of the US will be largely the same. The margin between the share over 65 in the US and United Kingdom is now 4%, in 2050 it will be 5% (26% in the United Kingdom to 21% in the US). South Africa currently has 55 registered banks, including twelve foreign banks and four mutual banks. That figure does not include 60 foreign banks with authorized representative offices. The 55 registered banks have 123,272 employees in 3,251 offices, approximately one office for every 13,000 inhabitants. Postbanks, a banking system with 2,400 offices run by the postal system, receives deposits from the public but does not provide credit. One-fifth of British invest in stock or stock funds; this is low compared to the US, but high compared to other European countries. Specifically, 20% of the UK population invest into stocks or stock funds, whereas, 14% of France s population invests into stocks or stock funds and 7% of Germany s population invests into stocks or stock funds. One-Fifth of British Invest in Stock or Stock Funds; this is Low Compared to the US, but High Compared to Other European Countries Source: 4/8/00 Washington Post; Tiburon Research & Analysis Share of Investments Made Into Stocks or Stock Funds by Country The five largest Canadian banks control 93% of assets compared to only 19% by the United States' largest five. 20% 14% UK Population France Population Germany Population 7% Europe, Middle East, & Afria Markets 42

This section outlines retail banks. European markets are unique and varied as is evidenced by comparing statistics. For example although France has a much greater total area than Germany, with 210,040 and 138,225 square miles respectively, Germany s population of 82 million is significantly larger than Frances population of 60 million. Italy meanwhile is nearly half the size of France, at 116,217 square miles and yet the population is only slightly smaller at 57 million. Perhaps not so surprising, is the fact that the size of the GDP of these three countries tends to correspond relative to the population. Specifically (in order of highest population), Germany s GDP is $1.98 trillion, France s is $1.43 trillion, and Italy s is $1.18 trillion. Other European countries have a total population of 107 million combined, a combined area of 499,615 square miles, and a combined GDP of $2.05 trillion. The US by contrast has a population of 289 million, an area of 3,618,785 square miles, and a GDP of $10.38 trillion. The most common currency in Europe is the Euro. The European Union Parliament is well diversified across members, with Germany the most heavily represented with one-seventh of parliament members. France, the UK, and Italy are all equally represented, each holding 11% of parliament seats, while Spain and Poland each represent 7% of total Parliament members. The remaining 39% of representatives are from other European countries. The European Union Parliament is Well Diversified Across Members, With Germany the Most Heavily Represented With One-Seventh of Parliament Members European Union Parliament Members by Country All Other Membe rs 39% Pola nd 7% Source: 4/1/06 Financial Times (EDobserver); Tiburon Research & Analysis Spain 7% Germa ny 14% Ita ly 11% F rance 11% UK 11% The US has nearly 50% more wealth than Western and Eastern Europe combined. With $26 trillion of financial stock, Western Europe is significantly wealthier than Eastern Europe with only $1 trillion. The US by contrast, has $44 trillion of financial stock. Asia Pacific Markets This section outlines Asia pacific markets. High net worth investors asset levels continue to increase in Asia and could reach $7.2 trillion by 2003. In 1997, high net worth Asian investors had assets of $4.0 trillion. By 1998 they had increased to $4.4 trillion, and are expected to climb rapidly through 2003. The US has about double the wealth of Japan, China, and India combined. The US has $44 trillion in financial stock. With $18 trillion, Japan leads the pack in Asia, as China and India have $5 trillion and $1 trillion respectively. US investments are much heavier in equities than Japanese investments, but not much more so than Indian investments- likely due to that country s ties with England. Unlike the US, Asian investments are placed heavily in bank deposits. India for instance has 43

63% of its financial stock in bank deposits, while China and Japan have 48% and 38% respectively. Latin America Markets This section outlines Latin America markets Offshore Markets This section outlines offshore markets. Markets & Distribution Channel Conclusions This section outlines conclusions for the markets & distribution channels. Online Tools & Advice This section outlines retail banks. The number of personal computers in circulation will likely reach 570 million by 2013, up over 100% since 2007. The number of personal computers in use worldwide will reach 2.0 billion by 2014, up over 100% from 2007. 80 to 100 million personal computers will be sold each year from 2008 to 2013, up 5% per year. The Number of Personal Computers in Circulation will Likely Reach 570 Million by 2013, Up Over 100% Since 2007 280 Personal Computers in Circulation (Millions) 320 370 415 460 515 570 2007 2008 2009 2010 2011 2012 2013 Sourc e: Tiburon Res earch & Analysis Online tools & advice firms will earn $24 billion by 2013, up 60% since 2007. Online Brokerage This section outlines online brokerage. There are four advantages of scale moves in the discount brokerage market that will drive further M&A activity in the future, including increased commission revenues, improved margins, upgraded customers, and added cross-selling opportunities. Through Mergers & Acquisitions, the Number of Online Brokerage Firms will Continue to Dwindle Number of Online Brokerage Firms 50 40 2006 2010 2015 30 Source: 3/13/06 AFTrader.Com Web Site; 3/12/06 G oogle Web Site; 3/12/06 Hoover s Web Site; 2/06 AAII Journal; 4/12/05 Barron s; 2/18/05 AAII Journal; Economies of scale are crucial 6/29/04 Wall Street Journal; 6/7/04 Barron s; 3/17/03 Barron s; Tiburon Research & Analysis in the discount brokerage market due to high upfront costs combined with low incremental costs to add clients. 44

Through mergers & acquisitions, the number of online brokerage firms will continue to dwindle. Online Banking & Mortgages This section outlines online banking & mortgages. Perhaps not surprisingly, some estimates suggest online banking will some day reach threequarters penetration of bankers. In 2005, that share is 39%. By 2010, that share is expected to be about double, or 75%. Online banking usage may eventually rival ATM usage. Online bank assets are expected to double its deposits every two to three years for the rest of the decade. Perhaps Not Surprisingly, Some Estimates Suggest Online Banking will Some Day Reach Three-Quarters Penetration of Consumer Households Share of Consumer Households with Bank Accounts Using Online Banking 39% Source: 11/05 US Banker (Pew Internet and American Life Project); 12/17/02 American Banker; 5/7/02 Bob Veres Media Reviews; 4/02 American Banker; 8/14/01 American Banker (Tower Group); T iburon Research & Analysis 75% 2005 2010 The number of online bill pay transactions is likely to reach 12.0 million by 2008, Up 300% since 2003. The total number of online mortgage transactions is expected to increase in the future. Like in securities trading, eventually nearly all mortgage transactions will occur over the web, either by consumers or their brokers. Online Insurance This section outlines online insurance. The total number of online insurance transactions is expected to increase in the future. Eventually nearly all insurance contracts will be entered over the web, either by consumers or their agents. Retail Banks This section outlines retail banks. Bank of America is the leading advertising spender. They spent $58 million on advertising, over double the next closest competitor. Overall leaders include Capital One at $64 million, Bank of America at $58 million, Washington Mutual at $22 million, Fleet Boston at $21 million, and ING at $18 million. Banking industry executives feel that if their banks are in acquisition mode, other banks or thrifts are the likely targets. 61% of banking executives believe that if they were acquiring it would be either a bank or a thrift. 10% believe it would be an insurance agency. 5% believe it would be an asset manager. 4% believe it would be a transaction 45

processing company. 3% believe it would be a brokerage firm. 3% believe it would be an advisory firm. 14% believe it would be something else. Chartering a new bank is costly and time-consuming, requiring the mobilization of market and technical expertise and the ability to satisfy demanding regulators. Some estimates predict that the ten largest retail banks will account for over half of domestic banking assets. Full-Service Brokerage Firms This section outlines full-service brokerage firms. Financial advisors must emphasize customer service in the future to survive. With 12,000 mutual funds and only 8,000 actively traded stocks, the consumer can pick and choose a mutual fund to closely match desired goals, reducing the role of the broker or advisor. The internet has reduced transaction costs and increased free information for the investor. Additionally, index funds are growing at three times the rate of mutual funds. Investors are turning away from investment advice while the bull market leads investors to conclude that they don t need professional financial advice. The only way for financial advisors and brokers to compete is with outstanding customer service. Competition on an informational or price basis is not feasible long-term. Independent Reps This section outlines independent reps. Independent broker/dealers have over 61,000 producing reps in 2006, growing 33% by 2012. Nearly one-third of independent broker/dealers new reps are recruited from other independent broker/dealers. Specifically, 30% independent reps are recruited from other independent broker/dealers. Some independent broker/dealers recruit as many as 50% of their new reps from other broker/dealers. independent Reps that do move typically proceed through four decision stages, starting with indentifying exiting consideration reasons. Reps that do Move Typically Proceed Through Four Decision Stages, Starting with Indentifying Exiting Consideration Reasons Financial Advisor Recruiting Interviews Project Rep Broker/Dealer Decision Processes Prior Broker/Dealer(s) Experiences Exiting Consideration Reasons Marketing Messages Exiting Triggering Event As the independent broker/dealer industry is entering maturity, the focus has shifted from growth in advisors to increasing assets per advisor, building efficiency and profitability, and refining market niches Sourc e: Tiburon Res earch & Analysis New Broker/Dealer Selection Criteria New Broker/Dealer Criteria Weighting Independent Broker/Dealer The demand to go independent will always exist, but the barriers to entry are on the rise and the historical forces behind go-it-on-your-own are not as prevalent. Tomorrow s 46

independent reps will require more coaxing to make the transition than did their predecessors. To be considered a major independent, a firm must have $50 million in annual revenues and employ more than 300 reps; leading firms should also be able to point to revenues per rep exceeding $50,000. Fee-Based Financial Advisors This section outlines fee-based financial advisors. The fee-based financial advisors market will likely see many developments, including a slowing in the growth of the number of fee-based financial advisors, but rapid growth in their assets under management, continuing central role of custodians & difficulty in penetrating custody market, continuing use of mutual funds & growing use of exchange traded funds, alternative investments, & wealth management products, increased telephone & virtual wholesaling strategies, opportunities in outsourcing, & finally some consolidation in the industry. Larger fee-based financial advisors expect to defy the law of large numbers by growing at a faster rate than small feebased financial advisors. Larger Fee-Based Financial Advisors Expect to Defy the Law of Large Numbers by Growing at a Faster Rate than Small Fee-Based Financial Advisors Fee-Based Financial Advisors By Expected Three-to-Five Year Client Asset Growth Rate The number of fee-based financial advisors served by custodians will increase at a slower rate to 27,000 by 2012. Greater than 10% 74% 85% The three largest fee-based financial advisor custodians serve over 67% of fee-based financial advisors. Mutual funds and individual stocks, & bonds account for nearly all of registered investment advisor assets under management. All other products account for 14% registered investment advisors assets under management. Fee-based financial advisor mergers & acquisitions are up over 600% since 1999, with 81 deals taking place in 2007. Fee-based financial advisor mergers & acquisitions will increase to 163 per year by 2012. Insurance Agents This section outlines insurance agents. CPA Firms This section outlines CPA firms. Less than 10% 26% Less than $250 Million Source: 10/7/08 Citigroup Analyst Report; Tiburon Research & Analysis 15% Greater than $250 Million 1176 47

Estate Attorneys This section outlines estate attorneys. Real Estate Agents This section outlines real estate agents. Mortgage Brokers This section outlines mortgage brokers. Upscale Channels This section outlines upscale channels. Institutional Channels This section outlines institutional channels. English Speaking Countries Markets This section outlines English speaking countries markets. Big banks dominate the English speaking markets; the concentration of share in the Canadian, United Kingdom, and Australian banking industries makes these markets at least four times as intense as the US. In Canada, the five largest banks control 91%, in the United Kingdom, the top five control 80%, and in Australia the top five control 74%. Conversely, in the US the top five banks control only 19% of the market. Big Banks Dominate the English Speaking Markets; the Concentration of Share in the Canadian, United Kingdom, and Australian Banking Industries Are At Least Four Times as Intense As That in the US Share of Banking Assets Controlled By Five Largest Banks Canada has a concentrated Source: 9/29/05 American Banker; 7/14/04 American Banker; 12/5/00 New York Times; 6/7/00 Financial Post; Tiburon Research & Analysis market, with five banks controlling almost all banking industry assets. Specifically, Royal Bank of Canada controls 26% of the assets, Toronto Dominion 18%, Canadian Imperial Bank of Commerce controls 16%, Bank of Nova Scotia controls 16%, and Bank of Montreal 15%. All other Canadian banks control only 9% of the assets. There are two fundamental ways for foreign financial services firms to enter the English speaking markets build or buy. The pros of building are total control of product development or service delivery. The cons are that it takes a large investment of resources. To buy, the pros are immediate entrance, and having a local management team in place. The cons are that it may be costly to pay for, and ingrained methods of doing business may be difficult to overcome. The volume of leveraged buyouts is up substantially in the United Kingdom since 2003. In 2003, there was a total of $25.3 billion in leveraged buyout activity. In 2004, activity rose to $35.1 billion. 91% 80% 74% 19% Canada UK Australia USA 48

Europe, Middle East, & Afria Markets This section outlines retail banks. Europe has the second largest share of worldwide internet users with about 30%. North America and the Asia Pacific are also rank proportionately high in terms of overall numbers internet users. Specifically North America represents 22% and Asia Pacific leads the way with an amazing 37% of the global internet users. Latin America represents a significantly smaller share of users at 9% while Africa and the Middle East only 4% combined. Europe Has the Second Largest Share of Worldwide Internet Users With About 30% North America 22% World Internet Usage by Locale Latin America 8% Africa 2% Eu rope 29% Sourc e: 4/4/06 Financ ial Times (Internet Wor ld Stats ); Tiburon Research & A nalysis Middle East 2% Asia 37% The largest bank in Germany is Allianz, trailed somewhat closely by Deutsche Bank. In fact, they are the only banks in Germany with over one trillion in assets. More specifically, Allianz has nearly $1.36 trillion in assets and Deutsche Bank has $1.14 trillion. Other leading German banks by asset level, include Bayerich Hypo-und- Vereinsbanken ($753.7 billion), Dresdner Bank ($713.7 billion), HVB Group ($638.6 billion), and Commerzbank ($579.7 billion). Many other banks have more than $100 billion in assets as well, including West LB ($345 billion), Eurohypo ($309.1), Nord/LB ($276.2 billion), HSH Norbank ($276.2 billion), Bankingesellschaft Berlin Group ($180.9 billion) and BHW Holding ($161.8 billion). Asia Pacific Markets This section outlines Asia pacific markets. Asia leads the world in internet users, with nearly 40% share globally. While North America and Europe are also proportionately high internet users, they only represent 22% and 29% of the global internet users. Latin America represents an even smaller share of users at 9% while Africa and the Middle East only 4% combined. The Asian REIT market is only one-third the size of that in the US. The American REIT market has $300 billion in assets under management, while the Asian REIT has only $87 billion, marking a significant difference in size. Previously, the Asian credit market has been dominated by a handful of large players such as CitiFinancial, and less reputable firms just a step up from loan sharks. Latin America Markets This section outlines Latin America markets. Offshore Markets This section outlines offshore markets. 49

EVOLUTION OF THE INSURANCE AGENCIES, BROKERS, & PRODUCER GROUPS BUSINESS This chapter outlines the evolution of the insurance agencies, brokers, & producer groups business Market History This section recaps the market history of the insurance agencies, brokers, & producer groups business The insurance industry has evolved through three phases, including its early, middle and recent phases. Early Phase This section outlines the early phase of the insurance industry Northwestern Mutual was founded by New York Trader John Johnston as the Mutual Life Insurance Company of the State of Wisconsin in 1857. The firm was based in Janesville, WI and led by its CEO John Johnston. Northwestern Mutual was Founded by New York Trader John Johnston as the Mutual Life Insurance Company of the State of Wisconsin in 1857 Comments Founded in 1857 Founded as Mutual Life Insurance Company of the State of Wisconsin Founded by John Johnston Based in Janesville, WI CEO: John Johnston Middle Phase This section outlines the middle phase of the insurance industry Recent Phase This section outlines the recent phase of the insurance industry Source: 1/27/09 International Directory of Company Histories Web Site; 3/27/07 P R Newswire; 12/18/08 Northwestern M utual Web Site; 12/08/08 Northwestern Mutual Web Site; 6/8/05 Capital Markets Consultants Conversation (Mendelson); 4/27/05 Northwestern Mutual Web Site; Tiburon Research & Analysis Market Definition This section outlines the market definition of the insurance agencies, brokers, & producer groups business Captive Agents This section outlines life insurance agents. Independent Agents This section outlines property & casualty agents. Market Growth This section highlights the market growth of the insurance agencies, brokers, & producer groups business Insurance Agencies, Brokers, & Producer Groups Employees This section outlines the market growth of insurance agencies, brokers, & producer group employees 50

Insurance Agencies, Brokers, & Producer Groups Reps This section outlines the market growth of insurance agencies, brokers, & producer group reps Insurance Agencies, Brokers, & Producer Groups Net Premiums Written This section outlines the market growth of insurance agencies, brokers, & producer group net premiums written Insurance Agencies, Brokers, & Producer Groups Revenues This section outlines the market growth of insurance agencies, brokers, & producer group revenues Insurance Agencies, Brokers, & Producer Groups Net Income This section outlines the market growth of insurance agencies, brokers, & producer group net income Key Issues This section highlights the key issues of the insurance agencies, brokers, & producer groups business Product Utilization Trends This chapter outlines product utilization trends for insurance products, mutual funds, feeaccounts, and other products. Insurance Products Reps sell a wide variety of other insurance products including term life, long-term care, and others. Specifically, 97% sell term life and 73% sell long-term care. Reps of all sizes sell a wide variety of other insurance products. Product range includes term life, long-term care, survivorship, disability and Property & Casualty. Reps utilize a wide variety of annuity companies, with Nationwide (Best of America), sun America, and American Skandia being the leaders. Specifically 65% utilize Nationwide, 53% Sun America Retirement Markets, and 52% American Skandia. Nationwide, Sun America, and American Skandia are the leaders across all rep sizes. Amongst the three leaders, Sun America receives the highest satisfaction score of 7.8 out of 10.0. Total Firm Revenues Nationwide, SunAmerica, and American Skandia are the Leaders Across All Rep Sizes $ 1 M il li on + $ 6 0 0,0 0 0 - $ 9 9 9, 9 9 9 $ 3 0 0,0 0 0 - $ 5 9 9, 9 9 9 Annuity Companies Utilized By Rep Size N a t io n w id e S u n A m e r ic a R e t i r e m e n t M a r k e t s A m e r i c a n S k a n d i a P a c i f i c L if e H a r t f o r d L in c o ln N a t io n a l M a n u li f e P u t n a m S c u d d e r K e m p e r S u n L if e o f C a n a d a ( M F S ) A I G Independent reps utilize a wide variety of insurance companies, with AIG being the most popular. Specifically, 28% of $ 0 - $ 2 9 9,9 9 9 0 % 2 0 % 4 0 % 6 0 % 8 0 % Source: 7/01 Independent Rep Best Practices Survey; Tiburon Research & Analysis 51

reps utilize AIG and 25% utilize Pacific Life. AIG leads in utilization at the AIG Advisor Group broker/dealers but other insurance companies lead elsewhere; Pacific Life dominates at MSC. AIG is one of the most popular insurance companies across most revenue segments. Pacific Life receives the highest satisfaction score amongst insurance companies. Specifically, Pacific Life received a score of 7.9 out of 10 with Manulife coming at close second with a score of 7.6. Satisfaction scores for life insurance companies are fairly high across broker/dealers. Satisfaction scores for life insurance companies are fairly high across rep sizes. AIG and pacific life are the most widely utilized insurance companies and Pacific Life receives a slightly higher AIG and Pacific Life are the Most Widely Utilized Insurance Companies satisfaction score of 7.9 out of and Pacific Life Receives a Slightly Higher Satisfaction Score 10. AIG received a score of 7.3. Mutual Funds Insurance companies are partial to load funds. Insurers are fighting their way into the mutual fund market. Insurers have some of the most recognizable brand names in the financial industry, but are not associated with top-flight asset management. Average Satisfaction (1-10; 10 = Highest) Pacific Life Receives the Highest Satisfaction Score Amongst Insurance Companies Prude ntia l (A me rica n Skandia) Satisfaction with Insurance Companies Across All Independent Reps (1-10; 10 = High) Source: 5/03 Independent Rep Best Practices Survey; Tiburon Research & Analysis 10 9 8 7 6 5 4 3 2 1 0 Insurers are positioning as retirement specialist and employing sub-advisors such as Sun America. Annuities compete on basis of features, while mutual fund compete more on performance. The Hartford is utilizing Wellington Management Company to manage its mutual fund and annuities. AIG Pa cific Life Nati onwi de Lincoln Benefit H artford GE Jackson National Ma nul ife ING C. N.A. Insurance Companies Utilization & Satisfaction Across All Independent Reps Pacific Life Utilization: 25% S atisfaction: 7.9 AIG Utilization: 28% Satisfaction: 7.3 0 20 40 60 80 100 Utilization (Percent) Note: This data may be biased by the fact that the original survey was fielded amongst a group of leading AIG Advisor Group reps; as the survey sample continues to grow, any remaining biases should disappear Source: 5/03 Independent Rep Best Practices Survey; Tiburon Research & Analysis 6.5 6.5 6.6 7.1 7.0 7.0 7.3 7.3 7.3 7.6 7.9 52

Fee- Accounts Insurance companies are entering the investments business rapidly and they are significant users of TAMPs. The largest broker/dealers include AXA and NY Life, each with over 6,000 reps. Insurance companies are rushing to build investments programs to gain a share of the market for high net worth households, currently dominated by full-service brokers and banks. Genworth Financial Wealth management reports serving the most insurance companies, but many speak of Brinker Capital and independent portfolio consultants in the insurance market.. Genworth Financial Wealth Management Reports Serving the Most Insurance Companies, But Many Speak of Brinker Capital and Independent Portfolio Consultants in the Insurance Market TAMPs By Number of Insurance Companies Served Genworth Financial Wealth Management Loring Ward 3 17 Brinker Capital is the most widely used TAMP amongst insurance companies. SunGard Lockwood Advisor Port 1 2 2 Insurance companies may turn out to be one of the biggest TAMP markets. There has been an increased focus on Russell Investment Group Source: 2/5/02 Assante Conversation (Potts); Tiburon Research & Analysis investments. However there is a costly process to build in-house platform because of slow growth due to training of advisors, slower sales cycle, and investments are not primary business. But insurance companies are constantly shifting priorities. Reps utilize a wide variety of tamps, with SEI being the leader by far. Specifically, 56% of reps utilize SEI, compared with the closest competitor Meridian with 23%. SEI is the leading TAMP across reps of all sizes. While many of the TAMPs receive low satisfaction scores, both SEI and Lockwood received excellent scores. Specifically, Lockwood received a score of 8.8 out 10.0 and SEI 8.2. Managed assets are growing as a share of IBD product production. Specifically, managed assets grew from 11% to 16% from 1995 to 1998. LPL, Raymond James, and Royal Alliance are three leaders in fee accounts. Specifically LPL earns 20% of its revenues from fee-accounts, Royal Alliance 14%, and Raymond James 23%. Other broker/dealers earn about 10% of their revenues from fee-accounts. And the producer groups have moved into investments as well. 1 53

Training will be a key component of a successful offer. Insurance companies may be the most in need of training in investments as they know the sales process and have clients already. Some competitors are increasingly focusing on training as well. Envestnet claims to offer technology powered practice management. SEI is rolling out a new online initiative this summer (although they are focused on the independent advisor market) Utilizing industry lingo will also be crucial (e.g., Brinker Capital s brochure talks of looking at current clients and cases. There are a few drawbacks to the insurance industry as well, especially regarding time to market. May not be very sophisticated outside of VAs and VUL and may not even think market- products are a good idea for their clients. Not involved yet in managed accounts because the state of managed accounts is difficult for some commissionoriented people; and few naturally understand the process relationships in a fee-model. May have to do a lot of missionary work with lots of plane tickets needed; RunMoney needs to determine if it has the ability to sustain itself that long; and Channel needs more maturity. RunMoney probably shouldn t bank its whole future on this industry; got to go kill something soon. Both potential size and speed to market define the attractiveness of new markets. Both Potential Size and Speed to Market Define the Attractiveness of New Markets Target Market Evaluation While insurance presents an attractive market, that doesn t mean no other tamps have found their way into the space, including CPAs and banks. High Potential Size of Opportunity (Market Size Less Captured) Attorneys Insurance Companies Banks RBDs Wirehouses RIAs Bigger is not always better for insurance brokers. Some small to mid-size companies have grown fed up with a lack of personal service from large insurance brokerages. Family Offices Low Slow Speed to Market Source: 7/17/01 RunMoney Conversation (Gregg); Tiburon Research & Analysis IBDs Fast Other Products This section of the report will cover other products. Leading Captive & Independent Insurance Agencies, Brokers, & Producer Groups This section highlights the leading life firms in the insurance agencies, brokers, & producer groups business Insurance Agencies, Brokers, & Producer Groups by Number of Employees This section outlines the leading insurance agencies, brokers, & producer groups by employees Largest insurance agencies by number of employees include various companies. Largest insurance brokers by number of employees include various companies. 54

Largest fee-based employee benefit firms by number of employees include various companies. Largest fee-based employee benefit firms in the San Francisco Bay Area include Watson, Wyatt Worldwide, Tower Perrin, and others. Specifically, Watson Wyatt Worldwide has 115 and Towers Perrin has 54 employees. Largest Fee-Based Employee Benefit Firms in the San Francisco Area Include Watson, Wyatt Worldwide, Tower Perrin, and Others (Page 1) W a t s o n W ya tt W o r ld w id e Tow er s Pe rrin T h e S e g a l Co. H e w it t As s o c ia te s A r th u r A n d e r s e n L L P San Francisco Fee-Based Employee Benefit Firms Employees 2 3 30 35 54 1 15 Largest producer groups firms by number of employees include various companies. R o s s G o r d o n & A s s o c ia t e s, In c. P e n s io n D y n a m ic s C o r p. C o a te s K e n n e y, In c. C a r e C o u n s e l 5 5 12 20 Insurance Agencies, Brokers, & Source: 11/23/00 San Francisco Business Times; Tiburon Research & Analysis Producer Groups by Number of Reps This section outlines the leading insurance agencies, brokers, & producer groups by reps The largest insurance agencies include AXA and NY Life, each with over 6,000 reps. Largest insurance brokers by number of reps include Willis insurance and Lockton Insurance. Specifically, Willis Insurance has 13,500 and Lockton Insurance has 1,173 reps. IS N e t, In c. 3 Largest insurance brokers in the San Francisco area by number of reps include ABD Insurance and Woodruff-Sawyer. ABD Insurance has 270 and Woodruff-Sawyer has 203 reps. Largest Insurance Brokers In the San Francisco Area by Number of Reps Include ABD Insurance and Woodruff-Sawyer Largest Insurance Brokers In the San Francisco Bay Area By Number of Reps ABD Insurance Woodruff-Sawyer 203 270 Largest fee-based employee benefit firms by number of reps include various companies. Willis Insurance Services ISU Insurance Services Acordia of California Keenan & Associates Heffernan Group 65 79 109 104 115 Largest producer groups by number of reps include various companies. California Insurance Center Arthur Gallagher Lockton Insurance Brokerage 53 50 49 Source: 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis Insurance Agencies, Brokers, & Producer Groups by Net Premiums Written This section outlines the leading insurance agencies, brokers, & producer groups by net premiums written Top property & casualty insurance providers in terms of net premiums written include State Farm Group and Allstate Insurance Group. State Farm has $35 billion and Allstate has $18 billion net premiums. 55

Top property & casualty insurance providers in terms of net premiums written in the San Francisco bay area include various companies. Top insurance brokers in terms of net premiums written include Willis Insurance and Lockton Insurance, with the leader having over three times as much as the next competitor. Top Insurance Brokers in Terms of Net Premiums Written Include Willis Insurance and Lockton Insurance, With The Leader Having Over Three Times as Much as the Next Competitor Willis Insurance Services Lockton Insurance Brokers Insurance Brokers By Net Premiums Written ($ Millions) $8,500 $34,000 Top insurance brokers in terms of net premiums written in the San Francisco Bay Area include Marsh & McLennan and ABD Insurance, both with over $1.0 billion net premiums written. ABD Insurance Tanner Insurance Keenan & Associates ISU Insurance Services Heffernan Group Woodrruff-Sawyer Sitzmann Morris & Lavis Jenkins Athens Insurance $2,260 $940 $850 $800 567 $544 $457 $370 Source: 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis Largest fee-based employee benefit firms by net premiums written include various companies. Largest producer groups by net premiums written include various companies. Insurance Agencies, Brokers, & Producer Groups by Revenues This section outlines the leading insurance agencies, brokers, & producer groups by revenues Largest insurance agencies by revenues generated include Marsh & McLennan & Willis Insurance Services, with the leader generating over twice as much as the next competitor. The top ten US insurance brokers by revenues include Marsh & McLennan and Aon Group, with the leader generating almost twice as much as the next competitor. Largest Insurance Agencies by Revenues Generated Include Marsh & McLennan & Willis Insurance Services, With the Leader Generating Over Twice as Much as the Next Competitor Marsh & McLennan Willis Insurance Services ABD Insurance Keenan & Associates ISU Insurance Services Arthur Gallagher Heffernan Group Woodruff-Sawyer Andreini & Company Tanner Insurance Insurance Agencies By Revenues ($ Millions) $165 $104 $96 $85 $55 $48 $31 $27 $2,300 $5,600 Largest fee-based employee benefit firms by revenues include various companies. Source: 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis Amongst the insurance producer groups, M is the leader. Insurance Agencies, Brokers, & Producer Groups by Net Income This section outlines the leading insurance agencies, brokers, & producer groups by net income 56

Largest insurance agencies by net income include various companies. Largest insurance brokers by net income include various companies. Largest fee-based employee benefit firms by net income include various companies. Largest fee-based employee benefit firms by net income include various companies. Largest fee-based employee benefit firms in the San Francisco area include Watson Wyatt Worldwide, Towers Perrin, and others. Largest Fee-Based Employee Benefit Firms in the San Francisco Area W a ts o n W y a tt W o r ld w id e Number of Bay Area Employees 1 15 T o w e r s P e r r in 54 Largest fee/commission based employee benefit firms in the San Francisco area include Pricewaterhouse Coopers and William M Mercer. T h e S e g a l H e w itt A s s o c ia t e s Ar t h u r A n d e r s e n R o s s Go r d o n & A s s o c ia t e s P e n s io n D yn a m ic s 1 2 20 23 30 35 C o a te s K e n n e y 5 C a r e Co u n s e l 5 IS Ne t 3 Source: 11/23/00 San Francisco Business Times; Tiburon Research & Analysis 57

MARKET SEGMENTATION This section explains the market segmentation of the insurance agencies, brokers, & producer groups business Historically, insurance products were only distributed by insurance agents but this has changed substantially. Historically, insurance sales were plain and simple, as insurance agents were all fulltime & captive, they only sold insurance, and there were no part-time insurance agents. Insurance agents were historically all full-time & captive. Insurance agents historically only sold insurance. And no part-time insurance agents historically existed. There are four fundamental shifts that have taken place in insurance distribution, including spun off agencies, proprietary products, expanding products, and new distribution channels. The first fundamental shift in insurance distribution has been spun off agencies. Most insurance professionals now exist in one of three models, including the captive agents model, independent agents model, and the producer group model. However, there are pros and cons to each model. The pros to the captive agents model are the excellent training, subsidized resources, and incentives and benefits. Cons include representing companies, product limitations, and no capitalization potential. Pros for the independent agents model include representing clients, not companies, and access to a broader product spectrum. Cons are the high cost of technology and systems required for dealing with multiple companies, high cost of staff training and development, no real influence with carriers and vendors, and little capitalization potential. Producer group pros are representing clients, not companies, access to a broader spectrum and creative marketing ideas, and increased compensation. However some cons are focus is limited to life insurance solutions, lack of institutional market presence, and unproven capitalization potential. Captive Agents This section outlines the captive agent portion of the insurance agencies, brokers, & producer groups business Many insurance companies have no captive sales force. However some of the bigger insurance companies still have good captive sales forces, including Northwestern Mutual, New York Life, Mass Mutual, AXA, Ameriprise, and State Farm. Independent Agents This section outlines the independent agent portion of the insurance agencies, brokers, & producer groups business

Independent agents and insurance producer groups have been growing in prevalence. Independent shops realized that by pooling production and funding a central support office, they had increased buying power. Although producer groups are in their infancy, their emergence may potentially be realignment in the distribution of financial services. However independent agents are the last of a dying breed. Brokers & Producer Groups This section outlines the brokers & producer groups portion of the insurance agencies, brokers, & producer groups business Traditionally, broker general agents managed impaired risks. Broker general agents deliver three things, including advanced case design, life settlements, and premium financing. M Financial Group, Partners Financial, and the Hemisphere Group are all examples of producer groups. The second fundamental shift in insurance distribution has been the move away from exclusively proprietary product sales. Some life insurance companies with captive sales forces allow their agents to sell nonproprietary products. For example many life insurance companies allow their agents to sell 40% non-proprietary products. However, in the property & casualty industry, firms like Allstate still require 100% proprietary product sales. Some Life Insurance Companies With Captive Sales Forces Allow their Agents to Sell Non-Proprietary Products Life Insurance Agents by Product Mix Non-Proprietary Products 40% Proprieta ry Products 60% The third fundamental shift in insurance distribution has been insurance companies expanding products offerings. Source: 11/25/00 Bain & Company Presentation (Doe); 11/22/00 Travelers Insurance A dvertisem ent; 11/13/00 HD Vest Conversation (S mith); 11/11/99 Investment News; 9/99 Bank Investment Marketing; 7/99 Annuity Market News; 4/19/99 Investment News; 9/98 AdvisorTech Meeting (M ccarthy); 9/9/98 Freemark Memorandum (Bergman); Tiburon Research & Analysis Insurance companies are rushing to build investment programs to gain a share of the market for high net worth households, currently dominated by full-service brokers and banks. Life insurance agents have picked up securities licenses to sell variable life and are now starting to dabble in investment products. 30% of life insurance agents currently have NASDAQ securities licenses. This has affected life insurance products as nearly three-quarters, or 70%, are now equity based. 59

By 2010, almost two-thirds of life insurance agents are expected to hold NASD securities licenses. Insurance agents have been in & out of the advisory business for years. And insurance agents now offer a wide variety of financial planning services, with almost all offering insurance planning services and individual retirement accounts. 96% of insurance agents offer individual retirement accounts, and 96% also offer insurance planning services. Insurance companies are also building mutual fund programs, hoping to take advantage of the pending explosion in retirement savings. And Insurance Agents Now Offer a Wide Variety of Financial Planning Services, With Almost All Offering Insurance Planning Services and Individual Retirement Accounts Individual Retirement Accounts Insurance Planning Services Investment Planning Estate Planning Education Planning Income Planning Charitable Giving Business Planning Elder Care Planning Trust Services Private Banking Source: 1/05 Cerulli Associates Newsletter; Tiburon Research & Analysis Share of Insurance Agents Offering Various Financial Services 4% 27% 60% 60% 60% 56% 92% 90% 87% 96% 96% Training will be a key component in the shift of insurance companies selling investment products. Agents may be the most in need of training in investments as they know the sales process and have clients already. Some insurance companies, like Prudential & AXA have already implemented new training programs. Prudential has developed a new training program, and AXA began retraining its 7,400 agents. And competitors are increasingly focusing on training as well, like Envestnet and SEI. Envestnet claims to offer technology powered practice management. Meanwhile, SEI is rolling out a new online initiative. Utilizing industry lingo will also be crucial in training programs. For example, Brinker Capital s brochure talks of looking at current clients and cases. The fourth fundamental shift in insurance distribution is the entrance of new distribution channels. Just like in the brokerage business, many new distribution models have emerged in the insurance business. For example, besides going straight Just Like in the Brokerage Business, Many New Distribution Models Have Emerged in the Insurance Business Source: Captive Office GA Captive Agents Distribution Channels in the Insurance Industry The NW ML Model Captive Non-Office GA The B ranch Office Model Life Insurance Company 12/27/00 FSC Rep Conversation (Lovejoy); Tiburon Research & Analysis IBD/IGA The HD V est or MSC Model The Old M Group Mod el Produ ce r Group s Independent Agents The Personal Producer General Agent Model Non-IBD IGA The Centrelink Model 60

from the insurance company to independent agents, there are four intermediaries utilized as well. Some agents go through captive non-office general agents, whereas others go through producer groups who subsequently go through independent broker/dealers. This is of course, if consumers are not reached by captive insurance agents first. Insurance sales are spreading across a wider range of sellers, ultimately decreasing full time agents and increasing part-time insurance agents. Full-time agents have decreased from 47% in 1997 to 22% in 2003. Meanwhile, part-time agents have increased from 47% in 1997 to 60% in 2003. Beyond traditional insurance agents, various distributors are positioning themselves differently on the consumer affluence curve, with bank brokerage reps low and producer groups high on the curve. Bank brokerage reps are typically low on the curve, serving less wealthy individuals and selling smaller policies. Producer groups and upscale competitors, however, are positioned high on the curve, catering to the highly affluent investors. Beyond Traditional Insurance Agents, Various Distributors are Positioning Themselves Differently on the Consumer Affluence Curve, With Bank Brokerage Reps Low and Producer Groups High on the Curve Consumer Affluence $$$ $ Bank Brokerage Reps Consumer Affluence Curve Source: 12/11/00 The Insurance Advisor Business Plan; Tiburon Research & Analysis Stockbrokers Independent Agents Captive Agents Bank Trust Officer Producer Groups, CPAs, & Attorneys $ Insurance $$$ Policy Sizes However the sales forces for emerging distribution channels lack knowledge & experience, creating a potential for insurance specialists. Specialists assist with case design, product selection, sales support, and training support. First, specialists can help gather facts and analyze data to determine the client s needs and objectives. Next, they can assist in choosing the correct mix of products for client needs and wants. Specialists can also help But Specialists Mainly Assist in Product Training in sales support, by completing paperwork and tracking Specialist Assistance by Demand applications. In addition, they can anticipate and fix problems. Last, specialists can run classes Product Training 59% to train reps on basics of insurance and updates of new Sales Support 50% products and services. But, specialists mainly assist in product training. More specifically, 59% of the time specialists are helping train new advisors on products. Sales support is second, then analysis Analysis Support Case Design Source: 9/05 Registered Rep; Tiburon Research & Analysis 27% 46% 61

support, and finally case design. Insurance sales are more difficult and time consuming than other investment products and as a result many advisors still refer out insurance. Insurance is different than mutual funds or annuities where the customer can be in the investment the same day. Most life insurance requires medical exams and 60-90 days waiting periods. Busy brokers and bankers will need help therefore in selling life insurance products. Some life insurance companies are developing simpler life insurance products in order to overcome this dilemma. 62

KEY VENDORS TO THE INSURANCE AGENCIES, BROKERS, & PRODUCER GROUPS BUSINESS This chapter highlights key vendors of the insurance agencies, brokers, & producer groups business Consumers can purchase insurance products through multiple channels, including insurance agents, insurance broker/dealers, and web site. Consumers Can Purchase Insurance Products Through Multiple Channels, Including Insurance Agents, Insurance Broker/Dealers, and Web Sites Insurance Industry Distribution Channels Consumers Distribution insurance companies now use one or more of three distribution models, including captive, independent, and manufacturing only models. Insurance Ag en ts Insurance Insurance Agents Agents Producer Groups Insurance Broker/Dealers In su rance In su rance Broker/Dealers Broker/Dealers Pro ducer Groups Web Site Web S ite Direct Web Site This research report is focused on the first two categories who have either captive or independent distribution forces. Source: Tiburon Research & Analysis Insurance Product Companies Independent Broker/Dealers, Custodians, & Clearing Brokers This section outlines the key independent broker/dealers, custodians, & clearing brokers It seems like the wholesale companies would present enormous challenges and would be second choice to the life insurer with captive and/or even independent controlled distribution. We would also pay some special attention to the foreign companies coming into the US including Axa, Allianz, ING, and Aegon. And it is also important to note that insurance agencies, brokers, & producer groups are positioned at different places on the affluent customer curve. Insurance producer groups have terrific client bases and are considering a move into investments. Five landmines & time sinks to avoid include insurance companies that are noninvestment oriented, companies with low-end clientele, We Should Seek Large Companies With Investments-Orientation Company Size Large Small Source: Tiburon Research & Analysis Insurance Agencies, Brokers, & Producer Groups Investments-Orientation Target Company Analysis SF CNA Traditional Insurance NY L NWM L Alls Aegon P rinc CUNA Allz Met AGL NF P MGrp M ass Jack FFR High Hrtf SLC NW AmSk Allm G u ar Orientation Pac Li fe J o Han ING Mo NY Lin Fin Phoe AXA Sun Am Investments 63

companies with potential to have fee-based investing licked, wholesale insurance organizations, and companies that own a solution. We should seek large companies with investments-orientation. We should target firms that have captive or highly influenced sales forces. We should target firms that have high net worth clients. We should find opportunities to be the solution. We Should Target Firms That Have High Net Worth Clients High Net Worth Insurance Agencies, Brokers, & Producer Groups High Net Worth Clients Target Company Analysis CN A FFR NFP H igh MGrp Phoe Out of the 1,000+ insurance agencies, brokers, & producer gropus we made a priority list of the top 25 opportunities: 1. SunAmerica 2. ING 3. NFP/FFR 4. M Group 5. Phoenix 6. AXA 7. Guardian 8. Allmerica 9. Pacific Life 10. Penn Mutual 11. American General 12. State Farm 13. Allstate 14. CUNA Mutual 15. American Skandia 16. New York Life 17. Met Life 18. Northwestern Mutual 19. Mass Mutual 20. MoNY (Advest) 21. Nationwide 22. Principal 23. CNA 24. Lincoln Financial 25. John Hancock Customer Base Low Net Worth SF Traditional Insurance Source: Tiburon Research & Analysis A lls C ons ec o NWM L NYL Aeg on M a ss Princ All z J ac k M e t AG L NW G ua r SLC Hrt f CU NA A msk All m Lin Ben Orientation Lin FInl M ony Pac Life Jo H an AXA Sun Am ING Investments We can also identify a list of the next 35 that maybe easier short-term hits for RunMoney. Insurance agencies, brokers, & producer groups have been trying to enter the investments business for a decade. Insurance agencies, brokers, & producer groups receive mixed feedback from fullservice brokers. 64

Some full-service brokers recognize the industry presence of insurance agencies, brokers, & producer groups but most dismiss insurance agencies, brokers, & producer groups as non-competitors. Insurance agents have benefited from the trend towards retirement planning. Several insurance agencies, brokers, & producer groups have bought some of the IBDs. And a huge number of mergers make it difficult to figure out who to call. AIG s troubles may extend beyond the marsh bid rigging allegations. The insurance scandal is likely to result in more disclosure requirements for insurance agencies, brokers, & producer groups and the National Association of Insurance Commissioners has issued model legislation. Multiple sources suggest that regulation gaps across the individual states may prompt more federal Government attention to the insurance industry. Individual states have also gotten involved in proposing additional legislation concerning insurance sales. New York attorney general Spitzer s investigation will not end at Marsh & McLennan; however it s not going to be open season on the industry. No matter the distribution model, insurance professionals have moved towards investments. Life insurance agents have picked up securities licenses to sell VL and are now starting to dabble in investment products. About 30% of the nation s 200,000 life insurance agents hold NASD securities licenses, a number that s expected to grow to 60% over the next ten years. Insurance broker/dealers are still dominated by insurance, many reps work part-time, and many firms lack adequate investment offices. In the IBD Industry, Up-Front Product Commissions Contribute 50% to the Average Reps Income While Investment Advisory Fees and Trailers are an Additional 20-25% Each Reps Compensation By Compensation Type Hourly & Other Fees 6% More broadly are all the independent broker/dealers which still sell a lot of insurance are growing quickly. Trailing Product Commissions 20% Up-Front Product Commissions 50% In the IBD industry, up-front Investment Advisory Fees product commissions contribute 24% 50% to the average reps income while investment advisory fees and trailers are an additional 20-25% each. Source: 7/01 Independent Rep Best Practices Survey; Tiburon Research & Analysis 65

Up-front product commissions seem to give way to some more investment advisory fees with the larger reps except the very largest which may be groups of smallers reps. Across all reps, mutual funds and variable annuities account for the majority of investment product usage. Mutual funds seem to decline in importance for larger reps at the expense of investment advisory accounts, except for the largest reps which may be groups of smaller reps. Three-quarters of consumers do business with more than one insurance company. Business generally select their insurance brokers based on breadth of service, reputation, & global expertise. Businesses Generally Select their Insurance Brokers Based on Breadth of Service, Reputation, & Global Expertise Businesses By Most Important Factor in Selecting Insurance Brokers Mutual Fund Companies & Other Traditional Product Companies This section outlines mutual fund companies & other traditional product companies Global Expertise 20% Geographical Locatoin 3% Fees 8% Breadth of Service 45% Fee-Accounts, TAMPs, & Separate Account Managers This section outlines feeaccounts, TAMPs, & separate account managers Reputa tion 24% Source: 4/05 Treasury Asset Management; Tiburon Research & Analysis 4 Exchange Traded Funds, Hedge Funds, & Other Investment Product Companies This section outlines exchange traded funds, hedge funds, & other investment product companies Wealth Management & Family Office Service Product Companies This section outlines wealth management & family office service product companies Technology Companies & Other Key Vendors This section outlines technology companies & other key vendors 66

FUTURE PREDICTIONS FOR THE INSURANCE AGENCIES, BROKERS, & PRODUCER GROUPS BUSINESS This section outlines the future predictions of the insurance agencies, brokers, & producer groups business. 67

APPENDIX This appendix will profile many of the leading industry players. Profiles will vary in depth based on Tiburon s historical need in its past client work to have researched each company. These profiles should be considered a bonus in this report as opposed to authoritative summaries of these firms strategies. In future drafts of this report, profiles are likely to be further detailed, so if your firm is included, please do send along any relevant marketing materials. The format of these company profiles is as follows: The first paragraph is a complete summary of the firm (including broad information on its history, business, numbers, ownership structure, and leadership) Subsequent paragraphs provide more detail, such as historical numbers, specific business & product details, etc. Profiles of Captive Insurance Agencies This section outlines profiles of captive insurance agencies. American International Group (AIG) AIG was founded by Cornelius Star in 1919, and is based in New York, NY. AIG operates in 130 countries and has 92,000 employees. AIG generates $98 billion in revenues, $9.7 billion net income, and has $962 billion assets. AIG is publicly traded on the New York Stock Exchange under the ticker signal AIG. The company is led by its CEO Martin Sullivan. History The first section of AIG s profile will explain the key historical events in the firm s development. American International Group (AIG) Comments Founded in 1919 Founded by Cornelius Starr Based in New York, NY 130 countries 92,000 employees $98 billion revenues $9.7 billion net income $962 billion corporate assets Public company: NYSE - AIG CEO: Martin Sullivan Web sites: www.aig.com, www.aigcorporate.com, www.aigdirect.com, www.aigpcg.com, www.aigpassport.com, www.americangeneral.com, www.aigag.com, www.aiglifebrokerage.com, www.agla.com, www.aigbenefitsolutions.com, www.aigannuity.com, www.aigvalic.com, www.americaspeaks-out.com, www.sunamericafunds.com, www.royalalliance.com, & www.aigsunamerica.com Source: 10/1/07 Fortune; 9/28/07 Wall S treet Journal; 9/24/07 Insurance Newscast; 9/10/07 Internet News; 9/07 Private Wealth M agazine; 9/07 Robb Report; 9/07 Financial Advisor; 9/07 Financial Planning; 8/20/07 Investment News; 8/13/07 Insurance Newscast; 8/07 B oom er M arket A dvisor; 8/07 Registered Rep; 7/26/ 07 Investment News; 7/10/07 AIG American General Web Site; 7/2/07 Valic Web Site; 3/07 Strategic Insight Analysis; Tiburon Research & Analysis American International Group was founded in 1919 and has evolved through three phases, including its early, Hank Greenberg acquisitions, and troubled & after effects phases. Businesses The second section of AIG s profile will outline its core businesses. AIG is organized into four functional business units, including general insurance, life insurance & retirement services, financial services, and asset management. 68

AIG earns over half of its net income from life insurance & retirement services, with the rest being split between general insurance, financial services, and asset management. Specifically, 51% of AIG net income comes from life insurance & retirement services. General Insurance AIG lists general insurance as its first line of business, despite a relatively low $3 billion in operating income. This is the largest publicly traded seller of property & casualty insurance to business. AIG s general insurance unit generated over $3 billion, down significantly from 2003. Specifically, the income decreased from $4.6 in 2003 to $3.0 in 2004. AIG s general insurance division has five primary business units, including its domestic brokerage group and domestic personal lines business. The five groups consist of: domestic brokerage group, domestic personal lines, United Guaranty Corporation, Transatlantic Holdings, and the Foreign Insurance Group AIG s general insurance business first business is its domestic brokerage group. AIG s general insurance domestic brokerage unit generates over $20 billion in net premiums written in 2004, up slightly from 2003. Specifically, net premiums written increased from $20 billion in 2003 to $23 billion in 2004. AIG s General Insurance Division Has Five Primary Business Units, Including its Domestic Brokerage Group and its Domestic Personal Lines Business Domestic Brokerage Group Domestic Personal Lines Source: 7/18/05 AIG Web Site; Tiburon Research & Analysis AIG General Insurance Businesses AIG General Insurance Businesses Units United Guaranty Corporation Transatlantic Holdings The Foreign General Insurance Group AIG s General Insurance Domestic Brokerage Unit Generates Over $20 Billion in Net Premiums Written, Up Slightly from 2003 AIG Domestic Brokerage Unit Net Premiums Written ($ Billions) $20 $23 AIG is the largest publicly traded seller of property & casualty insurance businesses. AIG general insurance s first business, domestic brokerage group, is comprised of eight 2003 Source: 7/17/05 AIG Web Site; Tiburon Research & Analysis 2004 separate business units including its National Union Fire Insurance Company and American Home Assurance. The eight businesses include: National Union Fire Insurance Company, American Home Assurance Company, Lexington Insurance Company, AIG Environmental, AIG Risk Management, AIG Worldsource, HSB Group, and other Specialty Business units. 69

AIG general insurance s domestic brokerage group s first business is the National Fire Insurance Company of Pittsburgh. AIG s National Union has a business called AIG Executive Liability. AIG offers a series of coverages, including directors & officers and errors & omissions under its AIG Executive Liability brand. AIG offers its AIG Passport for multi-national companies to purchase locally admitted erroers & omissions liability insurance in 18 countries. AIG s Executive Liability offers liability coverage for non-profit organizations. AIG general insurance s domestic brokerage group s second business is the American Home Assurance Company, which provides commercial umbrella liability insurance and primary workers compensation insurance. AIG s general insurance s domestic brokerage group s third business is the Lexington Insurance Company, which is the largest excess and surplus line carrier. It is based in Boston, MA with Kevin Kelly as the CEO and Shaun Kelly as president. AIG s general insurance Lexington Insurance Company specializes in difficult-to-place property & casualty risks. AIG general insurance s domestic brokerage group s fourth business is AIG Environmental, which is the leading provider of environmental coverage and services. AIG s general insurance s AIG Environmental offers fifteen specialized environmental insurance products. AIG s general insurance s AIG Environmental was the first to offer pollution coverage in 1995. AIG s general insurance business has developed two key claims management processes, including its catastrophe advantage process and claims intake department. AIG general insurance s domestic brokerage group s fifth business is AIG Risk Management, which provides casualty risk management products and services to large commercial customers. AIG s general insurance s domestic brokerage group s sixth business is AIG Worldsource, which provides global insurance programs for US-based multinationals and foreign companies with US operations. AIG general insurance s domestic brokerage group s seventh business is HSB Group, which is the parent company of Hartford Steam Boiler Inspection & Insurance Company. AIG general insurance s domestic brokerage group s final business is its specialty business unit, which includes a number of specialty business units in aviation, transportation, construction, energy, & engineering. 70

AIG s AIG Aviation offers AIG Aviation Select which provides comprehensive aviation coverage. AIG s general insurance business second unit is its domestic personal lines business. AIG general insurance domestic personal lines unit generated over $4 billion in net premiums written in 2004, up slightly from 2003. Specifically, the net premiums written increased from $3.7 billion in 2003 to $4.3 billion in 2004. AIG s general insurance domestic personal lines business has three key businesses, including AIG Direct and the AIG private client group. AIG s general insurance domestic personal lines AIG Direct provides private passenger auto insurance through a range of direct sales channels. AIG s general insurance acquired GE s personal auto insurance business in 2002. In addition, AIG Director has increased new policy production by 45% in 2004. AIG s general insurance domestic personal lines AIG Direct increased new policy production by 45% in 2004. AIG s general insurance domestic personal lines agency has an auto division. AIG s general insurance domestic personal lines private client group provides personal insurance & risk management to high-net-worth individuals. AIG s Private Client Group claims 99% satisfaction rating amongst its high-net-worth policy holders. Only 1% are not satisfied with AIG s Private Client Group. AIG s Private Client Group offers nine types of insurance, including homeowners, automobile, and others. Other types of insurance include: Homeowners Automobile Private Collections of Art & Jewelry Excess Liability Excess Flood Yacht Aviation Kidnap & Ransom Insurance for Family Offices AIG s general insurance s private client group claims many advantages in serving wealthy families, including comprehensive array of insurance products and unsurpassed risk management expertise. AIG s general insurance s private client group created a hurricane protection act to proactively alleviate wind and water damage, and to help preserve its clients furnishings, artwork, & other valuable possessions. The act was launched in 2006 and is available in Florida and Long Island, NY. It dispatches hurricane specialists to policy holders homes to help assess damage. 71

AIG s general insurance s United Guaranty Corporation provides insurance products and services to mortgage lenders of all sizes. AIG s general insurance s United Guaranty Corporation unit generated over $500 million in net premiums written, up almost 15% from 2003. AIG general insurance s Transatlantic Holdings is its majority-owned reinsurance company subsidiary. Transatlantic Holdings is the largest publicly traded, US based reinsurance organization. AIG s general insurance s Transatlantic Holdings writes nearly $4 billion in net premiums, up slightly from 2003. AIG s general insurance s international property & casualty insurance operations are conducted through its foreign general insurance Group. AIG s general insurance s international property & casualty insurance operations has $9.4 billion net premiums. AIG s Foreign general insurance unit writes nearly $9 billion in net premiums, up almost 20% from 2003. AIG s general insurance s international property & casualty insurance has the most extensive foreign network of any insurance organization. AIG s general insurance s international property & casualty insurance s American International Underwriters is the marketing unit for AIG s overseas property & casualty unit. Life Insurance & Retirement Services AIG s second division is its life insurance & retirement services line, which generates two-thirds of the firm s total revenues. AIG s life insurance & retirement services lines has $23.2 billion net premiums written, $67.0 billion in revenues, and $7.9 billion operating income. AIG s life insurance & retirement services writes $23.2 billion in net premiums, relatively unchanged since 2002. Net premiums have increased Over 10% between 2002-2004 but decreased 10% between 2004 and 2006. AIG s life insurance & retirement services unit generates over $67 billion in revenues, up significantly from 2003. AIG s life insurance & retirement services earns almost $8 billion, up over 20% from 2003. AIG s life insurance & retirement services business has four key domestic operations, and one non-us business. Including AIG American General, AIG Annuity Insurance Company, AIG VALIC, AIG Sun America Retirement Markets, and foreign Business. AIG s life insurance & retirement services individual fixed annuities, group retirement products, and individual variable annuities account for two-thirds of revenues. One quarter of revenues are generated by individual fixed annuities. Another one-quarter is generated by group retirement products. One-fifth of revenues are generated by 72

individual variable annuities. The last one-third is generated by life insurance, payout annuities, group life & health, and home services. AIG American General AIG s life insurance & retirement services first business, AIG American General, distributes life insurance, annuity accident, & health products through its proprietary and third-party distributions channels. AIG American General has 4,000 employees, 54,000 independent agents, and 8 million customers. AIG s life insurance & retirement services has 4,000 employees. AIG s AIG American General business also supports 57,000 independent agents through its independent agency group, up over 50% since 2001. AIG s American General business services has 8.0 million customers. AIG s American General claims to distinguish itself through diversification of distribution & product lines, marketplace differentiation, and operational excellence. AIG s American General offers life insurance, credit & group insurance, and sophisticated estate planning. AIG American General s first business is life insurance. AIG s American General offers both universal life & term life. AIG s American General offers its elite global indexed universal life and investors variable universal life. AIG s American General offers its select-a-term. Select-a-term offers 18 term periods. AIG s American General s second business is annuities. AIG s American General offers its vision-maximizer single premium indexed deferred annuity. AIG s American General Offers its Elite Global Indexed Universal Life and Investors Variable Universal Life American General Universal Life Insurance Types Elite Global Indexed Universal Life Credits into best performing indexes from the S&P 500, the Dow Jones Euro Stoxx 50, the Hong Kong Hang Seng Index Guarantees minimum 2.50% annual return Able to be offered as CDs, annuities, and universal life insurance Investors Variable Universal Life Provides benefits to employees Protects employers assets Used with non-qualified deferred compensation plans Source: 9/5/07 Insurance Newscast; 9/07 Senior Market Advisor; 6/19/07 Offshore Pro Email (Ginsberg); Tiburon Research & Analysis AIG American General s specialty markets provides structured settlements, pensions, and single premium immediate annuities. AIG American General s third business is credit & group insurance. AIG American General AIG Benefit Solutions assets producers selling employer-paid voluntary, worksite, & association plans. 73

AIG American General s credit & group insurance business includes dental insurance. AIG American General s fourth business is sophisticated estate planning. AIG American General provides life insurance through captive American General Life & Accidental Insurance Company (Captive Agents), its independent agency group, and its life brokerage group. AIG subsidiary American General also distributes products through Valic. AIG subsidiary American General Life also distributes through AIG s financial institutions group. This group has 25 internal and external wholesalers, 37,000 bank reps and distributes through 340 financial institutions partnerships. AIG subsidiary American General Life also distributes its products directly through AIG s consumer lending business. They provide home mortgages, home equity loans, direct consumer loans, and retail sales financing. American General has 2.0 million consumer lending customers. AIG subsidiary American General also has a subsidiary called American General Investment Management. American General Investment Management has $73 billion assets under management. The company manages public and corporate pension plans, endowments, foundations, insurance companies, and health care systems. It is also a sub-advisor on a number of VALIC s annuities and mutual funds. AIG s life insurance & retirement services second business, AIG Annuity Insurance Company, is the largest issuer of fixed annuities in the US. AIG life insurance & retirement services AIG Annuity Insurance Company focuses on the bank channel. AIG life insurance & retirement services AIG Annuity Insurance Company sold almost $8.8 billion in annuities through banks in 2004. AIG s life insurance & retirement services AIG Annuity Insurance Company has record operating income in 2004. AIG s life insurance & retirement services AIG Annuity Insurance Company has its lowest ever operating expenses in 2004. AIG Valic AIG s life insurance & retirement services AIG Valic provides group retirement plans to various organizations. AIG Valic was founded in 1955 as Variable Annuity Life Insurance Company. Company is based in Houston, TX with 360 employees, 28,000 institutional clients, and 2 million retail clients. Valic has $62 billion assets and $740 million sales. Valic s CEO is Bruce Abrams. AIG s AIG Valic has 360 employees. AIG s AIG Valic serves 28,000 institutional clients, up 3,000 since 2004. 74

AIG s AIG Valic serves two million retail clients, up 25% since 2005. AIG s AIG Valic has over $60 billion assets under management, double its size in 1996. AIG s AIG Valic Has Over $60 Billion Assets Under Management, Double its Size in 1996 AIG Valic Assets Under Management ($ Billions) AIG s AIG Valic has over $740 million in sales. AIG s AIG Valic earns $1.0 billion. $30 $50 $43 $44 $62 AIG s AIG Valic includes Valic Retirement Services Company, 1996 2003 2004 2005 2007 Valic Financial Advisors, and the Valuable Annuity Life Insurance Source: 7/2/07 Valic Web Site; 7/2/07 Monster.Com Web Site; 7/2/07 Wikipedia Web Site; 7/18/05 AIG Web Site; Tiburon Research & Analysis Company. Valic Retirement Services Company includes institutional sales team. Valic Financial Advisors primarily sell annuities and insurance through broker/dealers. AIG s AIG Valic s first subsidiary is Valic Retirement Services Company. AIG s AIG Valic is a leading provider of group retirement plans to primary and secondary educational, health care, and public sector organizations. Valic is a leading provider of retirement services to primary and secondary education, as well as the third leading provider to institutions of higher education. In the health care segment Valic is the second leading provider to healthcare groups. AIG s AIG Valic s clients include Nissan Health Care Corporation and the San Diego City Schools. Specifically, amongst AIG Valic clients are Federal Credit Union members, Huntington Hospital, New Jersey ABP / ACTS, Nissan Health Care Corporation, Richmond, VA Public Schools, San Diego Schools, School District of Philadelphia. AIG s AIG Valic offers it s clients the Schwab Personal Choice Retirement Account, which it calls its brokerage access account. AIG s AIG Valic is proud of its marketing materials, including an enrollment promotion kit established for seventh-day adventists. AIG s AIG Valic sues former employees that attempt to steal its clients. AIG s AIG Valic has a subsidiary called Acumen Financial Group, which is focused on developing its proprietary systems. AIG Valic acquired it in 2006. AIG s AIG Valic s second subsidiary is Valic Financial Advisors. AIG s AIG Valic has 2,000 financial advisors. AIG s AIG Valic financial advisors have been in the midst of sales forces transformation since 2005. The Pre-2005 Model was transaction oriented and sold 1-2 simple products, 75

annuity salesmen in group annuity market for 50 years.. The Post-2005 Model focuses teams on the institutional side of the business specifically on group acquisition & retention. The field sales force is focused on retail clients, relationship-building, asset gathering, and financial planning especially in the rollover market. The sales force s key issues are asset aggregation and asset retention. Sales force may still have relationship with small groups that have under $20 million. AIG Valic financial advisors have access to a wide variety of products but proprietary products are heavily promoted. AIG s AIG Valic financial advisors primarily sell annuities, life insurance, long-term casualty insurance, & investments. AIG s AIG Valic offers a fee-accounts program called guided portfolio services in association with Ibbotson. AIG s AIG Valic s guided portfolio services reached 200,000 clients in 2006. AIGs AIG Valic s guided portfolio services platform has $8.0 billion assets under management, up 60% since 2006. AIG s AIG Valic s Guided Portfolio Services Platform Has $8.0 Billion Assets Under Management, Up 60% Since 2006 AIG Valic Guided Portfolio Services Assets Under Management ($ Billions) AIG s AIG Valic has collected the majority of its assets in its guided portfolio services in taxexempt accounts. AIG s Valic introduced a rollover education center. $5.0 $8.0 AIG s AIG Valic holds an annual Source: 8/23/07 Rex & Company Email (McGraw); 7/2/07 Valic Web Site; 12/31/06 AIG Annual Report; Tiburon Research & Analysis sales conference, which has been held in some terrific location. Previous locations: Barcelona, Spain in 2000; Orlando, FL in 2001; Miami, FL in 2003; and Whistler, British Columbia in 2004. AIG s AIG Valic s third subsidiary is the Variable Annuity Life Insurance Company. AIG Valic s primary annuity product is called its Portfolio Director. AIG Valic s Portfolio Director offers three sets of underlying funds, including its Valic Company I & II fund and public funds. The first fund is Valic Company fund which includes I Funds. The second fund is another Valic Company fund and includes II Funds. The Last Fund is a combination of public funds that include AIG Sun America, Ariel, Lou Holland, and Vanguard. AIG Valic introduced its income lock guaranteed income for life solution. AIG Sun America Retirement Markets 2006 2007 76

AIG s life insurance & retirement services fourth business, AIG Sun America Retirement Markets, distributes individual variable annuities. The firm is based in Woodland Hills, CA. AIG leverages its own financial advisor network, which now account for over one-third of sales. Another third is generated through AIG Advisor Group, one-fifth is generated through wirehouses & national broker/dealers, and one-tenths through banks. AIG s AIG Sun America also distributes products through third-party channels, including other IBDs, wirehouses, banks, and insurance agencies. The company has 121,000 financial reps, and distributes through other IBDs (aside from AIG Advisor Group), wirehouses & broker/dealers, banks, and insurance agencies. AIG subsidiary First Sun America specializes in single-premium deferred annuities and flexible-premium variable annuities. The company offer products exclusively in New York. AIG subsidiary Anchor National Life Insurance Company is a leading variable annuity provider. The company is based in Los Angeles, CA and has $24 billion in assets. AIG s AIG Sun America sponsors the America speaks out on retired investor research study with Harris Interactive. The firm surveyed 1,000+ investors 45 and older. The study sought to understand what investors think of variable annuities and what they are willing to pay for them. Organization & Ownership The final section of AIG s profile will address its organizational structure of ownership. AIG s web site is extensive and offers links to each of its client types, including individual & family consumers, businesses, & financial professionals. AIG is led by CEO Martin Sullivan and an experienced management team. Edmund Tse and Tom Tizzio are both Senior Vice Chairman, and then the company has the top executives of its subsidiaries. Donald Kanak is the Vice Chairman & Chief Operating Officer of AIG. Jay Winthrop is the CEO of AIG Sun America. Steve Bensinger is the Executive Vice President of VALIC, and Peter Harback is the President of AIG Advisor Group. Frank Zarb has made it known he would like to be replaced as Chairman of the Board as soon as possible. He is the former chairman of NASDAQ; former chairman & CEO Hank Greenberg was forced to resign in 2005 due to scandals; Greenberg still acts as chairman of the Starr Foundation, which is the $3.5 billion foundation started by the founder of AIG who named him his successor. Former CFO Howard Smith was fired in 2005 for failing to cooperate with investigators. Large institutional shareholders have recently recommended the firm make former SEC Chairman Arthur Levitt a director of the firm. Martin Sullivan was formerly the co-coo of AIG Advisor Group. Ameriprise Financial Ameriprise Financial was founded in 1894 and is based in Minneapolis, MN. The firm has 2.5 million clients, $466 billion client assets, $8.0 billion in revenues, $631 million profits, and is led by its CEO Jim Cracchiolo. 77

History The first section of Ameriprise Financial s profile will explain the key historical events in the firm s development. Ameriprise Financial was created as investors syndicate in 1894, became known as Investors Diversified Services (IDS), and then American Express financial advisors, before being spun off in 2005. Ameriprise Financial Comments Founded in 1894 Based in Minneapolis, MN 2.5 million clients $466 billion client assets $8 billion in revenues $631 million profits CEO: Jim Cracchiolo Public company (NYSE: AMP) Web Site: ww.ameriprisefinancial.com, www.securitiesamerica.com, www.greatmove.com, & www.brecek.com Investors Syndicate & IDS Years This section includes Ameriprise Financial s Investors Syndicate & IDS years. Ameriprise Financial founded first as investors syndicate in 1894. Ameriprise Financial changed its name from investors syndicate to investor diversified services in 1949. Ameriprise Financial created IDS life in 1958. Source: 2/27/07 Ameriprise F inancial A nnual Report; 10/10/05 Wall Street Journal; 8/05 Financial Planning; 8/05 Registered Rep; 8/05 Bob Veres Newsletter; 7/05 Research; 6/16/05 American Express Web S ite; 4/18/05 Fortune; 4/1/05 New Y ork Times; 5/3/04 Investment News; 10/1/02 American Express Presentation (Lennig); 6/02 American Express Brochure; 12/17/01 Investment News; 7/27/01 Wall Street Journal; Tiburon Research & Analysis American Express Years This section includes Ameriprise Financial s American Express years. Ameriprise Financial s Securities America founded by EF Hutton broker Steve Wild as Financial Dynamics in 1984. Ameriprise Financial s American Express acquired Investors Diversified Services in 1984. Ameriprise Financial s Securities America became a full-service broker/dealer in 1988. Ameriprise Financial s Securities America began a 100% payout in 1991. Ameriprise Financial s Securities America began an in-house registered investment advisor in 1993. Ameriprise Financial renamed itself from Investors Diversified Services to American Express financial advisors in 1994. Amerirpise Financial s Threadneedle Investments was founded in 1994. The firm was based in London, England. Ameriprise Financial renamed its mutual funds from IDS funds to AXP funds in 1995. 78

Ameriprise Financial s Securities America sales force grew to over 1,000 in 1998. Ameriprise Financial s American Express Financial Advisors acquired Securities America, adding 1,100 financial advisors in 1998. Ameriprise Financial s H&R Block Financial Advisors acquired Birchtree Financial Services in 1999. The firm is based in Kansas City, MO. Ameriprise Financial s H&R Block Financial Advisors acquired Olde Financial Corp in 1999. The firm is based in Detroit, Michigan and offered brokerage and other financial services through Olde Discount s network of 1,400 registered reps located in 181 branches in 35 states. They had 600,000 accounts and $37 billion assets under administration making them the fourth largest discount broker. H&R Block paid $850 million for the firm. The acquisition strengthened H&R Block s financial center initiative by providing the back office infrastructure, management expertise and product breadth for H&R Block to grow aggressively their investment advisory business. The objective was not to license perparers; only 60 are licensed. Instead, the objective was to build an internal referral model. Ameriprise Financial s Securities America ended its 100% payout in 2000. Ameriprise Financial s American Express Financial Advisors took $1 billion charge to write down worthless high-yield bonds issued in the 1990s in 2001. Ameriprise Financial CEO Jim Cracchiolo has helped his firm s profit figures by slashing one-fifth of his work force since 2001. Specifically, 21% of employees lost their jobs. Ameriprise Financial s Securities America transition ended and full-force recruiting began in 2003. Ameriprise Financial acquired UK s Threadneedle Investment in 2004. The firm was founded in 1994. Ameriprise Financial s American Express financial advisors was fined by Connecticut Department of Banking for $110,000 in 2004. Ameriprise Financial s Securities America captured substantial representatives from Vera Vest in 2004. Ameriprise Financial s Securities America s Brecek & Young was acquired by Security Benefit Corporatoin in 2004. The firm is based in Folsom, CA. Ameriprise Financial Years This section includes Ameriprise Financial s recent phase. Ameriprise Financial s American Express Financial Advisors were fined by the National Associate of Securities Dealers in 2005. Ameriprise Financial s American Express Financial Advisors was spun-off from American Express and changed its name to Ameriprise Financial in 2005. The firm has been operating under the new name since August 2005. The deal was finalized in 79

September 2005 American Express parent injected $1.0 billion into the unit upon its spin-off to keep its independence from outside investors. The spun-off company ranked approximately #300 on the Fortune 500 upon deal completion. The move allegedly catalyzed by difficulty for the financial advisory unit to compete for internal resources and funding. Ameriprise Financial trades on the NYSE under the ticker AMP. Ameriprise Financial was selected as the new name after several months of deliberation and narrowing down the choices from 3,500 names. Other names American Express considered for the unit were all trademarked: Archetype Amplify Amworth Luminous Oakbridge Sageborne Sagemont Tiller Ameriprise was selected to conjure up a sense of the compnay s American roots, the vastness of its advisor network, and its enterprising culture. Ameriprise Financial representatives report feelings of unease regarding the spinoff from American Express. Issues include low retention bonuses, lack of ownership in practices, loss of American Express brand, and fear of being bought by a wirehouse. Ameriprise Financial s representatives will be referred to as the personal advisors of Ameriprise Financial under the new Ameriprise Financial name. Ameriprise Financial, upon its spin-off from American Express, was set to be owned in large chunks by some well known investment firms. Specifically, Berkshire Hathaway has 12% ownership, Davis Select Advisors has 6%, Fidelity Investments has 5%, and 77% is owned by other firms. Ameriprise Financial s shares one saving grace resisting a potential sell-off upon the spin-off is the fact that it was qickly added to the Standard & Poor s 500. Ameriprise Financial reassured potentially wavering wealth clients through the spin-off with cookies. The firm sent clients more than $100,000 in assets Mrs. Fields chocolate chip cookies along with a personalized note from their advisors. The intention was to reassure them that personalized and independent advice will be the priority of the spinoff company. Ameriprise Financial agreed to pay $7.4 million to settle New Hampshire Bureau of Securities Regulation charges of improper mutual funds sales practices in 2005. Ameriprise Financial s American Express Financial Advisors was fined by the National Associate of Securities Dealers in 2005. Ameriprise Financial s Securities America acquired 97 representatives of Cap Pro in 2005. 80

Ameriprise Financial s Security America acquired Brecek & Young in 2008. The firm is based in Folsom, CA. Ameriprise Financial acquired H&R Block Financial Advisors from H&R Block in 2008. Based in Detroit, MI the firm has 260 offices, 1,100 reps, $8 billion assets under administration, & a $128 million net loss. Ameriprise Financial paid $315 million for the firm, gaining more than 900 reps. H&R Block Financial Advisors will become part of Ameriprise Financial s employee platform. Ameriprise Financial Acquired H&R Block Financial Advisors from H&R Block in 2008 Comments Based in Detroit, MI 260 offices 1,100 reps $28 billion assets under administration $128 million net loss Acquired in 2008 Paid $315 million Gains more than 900 reps Will become part of Ameriprise Financial s employee platform Ameriprise Financial has had Source: 8/6/08 Investment News; Tiburon Research & Analysis some troubles with regulators questioning its mutual fund practices and failure to supervise its sales force. Ameriprise Financial s H&R Block Financial Advisors has made several key acquisition to build its financial advisory business, including Birchtree Financial and Olde Financial Corp. Ameriprise Financial has accomplished two other things with its Securities America Acquisition. The firm accomplished proprietary product sales and improved their scale perception. Ameriprise Financial may extend its presence in the independent broker/dealer market with additional acquisitions. Ameriprise Financial s Securities America former founder Steve Wild went on to found another independent broker/dealer called QA3 Financial. The firm seeks to build partnerships between certified public accountants and lawyers. American express is dissolving financial direct, its direct, no-load sales channel, to focus more on the company s brokerage business. Ameriprise Financial s insurance, annuity, and mutual fund operations will go under the name River Source. Ameriprise Financial enlisted the services of New York advertising agency Saatchi & Saatchi to promote the new company. Campaign launched late 2004 and will inject over $20 million into advertising campaign, which will represent biggest ad expenditure ever by the firm. Before the spin-off as Ameriprise Financial, American Express Financial Advisors had used the parent s agency on record Ogilvy & Mather. Company will consider multiple media for campaign TV, radio, and print. Amerirpise Financial s parent, American Express, planned to inject $1 billion cash into the nw company after the spin-off; about one-third of that was earmarked for an 81

extensive branding campaign. 35% of the funds were used for branding & advertising expenses while the remainder was used for technology & perssonel retention expenses. Ameriprise Financial has been running a clever ad campaign to build brand recognition and its client base, focusing on financial planning services that the firm provides. Firm will spend the $350 million over the next two to three years. The campaign encompasses print full and two page ads in large publications television, online, radio, and outdoor media such as billboards. Firm focuses ads on its ability to meet diverse needs of mass affluent baby boomers. Chief competitors to the campaign are said to be other heavy advertisers to the mass affluent, specifically AG Edwards & Edward Jones. Interesting priority on financial planning services, with retirement, investments, and insurance successively highlighted. Promotes the firm having the most certified financial planners of any other company. Clever motif of 1960s imagery, such as old pictures of teenagers, & hippy art. Tag line: Back then, you didn t need a company with 100 years of financial services experience, but now you do. Images: High school football player, cheerleader, punk rockers, graffiti, man on the moon photos. Ameriprise Financial CEO Jim Cracchiolo has not been shy in stating that his firm is most interested in targeting the mass affluent with its advertising campaign. Focused on individuals between $100,000 and $1 million in investable assets, believes the niche is underserved. Ameriprise Financial s Jim Cracchiolo has cut costs by $900 million since 2000. Statistics The second section of Ameriprise Financial s profile will review some key statistics regarding the firm. Ameriprise Financial has 11,000 employees. Ameriprise Financial representatives are three-quarters platform II representatives. Specifically, 26% of representatives use platform I and 74% use platform II. Ameriprise Financial earns $631 million net income, still below its 1998 high. In 1998 the firm earned $818 million. Ameriprise Financial Earns $631 Million Net Income, Still Below its 1998 High Ameriprise Financial Net Income ($ Millions) Businesses The third section of Ameriprise Financial s profile will outline its core businesses. $594 $707 $818 $580 $668 $735 $574 $631 Ameriprise Financial is comprised of its broker/dealer unit, as well as several other 1996 1997 1998 2001 2003 2004 2005 2006 operations recently renamed as Source: 2/27/07 Ameriprise Financial Annual Report; 9/26/05 Business Week; 8/05 Financial Planning; 6/16/05 Am erican Express Web S ite; 7/29/03 American River Source. Specifically, the Banker; 10/29/02 Wall Street Journal; 9/1/02 Wall Street Journal; 12/31/98 American Express Annual Report; Tiburon Research & Analysis business units are: Ameriprise Financial Broker/Dealer, H&R Block Financial Advisors, Securities America, Brecek & 82

Young, River Source Investments, River Source Insurance, River Source Annuities, River Source Distributor, & Threadneedle. Ameriprise Financial underwent a major shift in the structure of services offered to its representatives in 2000, creating three tiers differentiated by service offerings. Ameriprise Financial introduced the three-tier model in an effort to attract seasoned planners to the franchise option, instead its own top-producing representatives opted to switch. Ameriprise Financial offers three platforms, which are differentiated by services and responsibilities including gemployee, franchisee, and Securities America. Ameriprise Financial s total assets are composed of nearly two-thirds assets under management. Ameriprise Financial s total assets under management are over one-half managed for corporate clients. Specifically, 54% are managed for corporate clients. Ameriprise Financial was doubted as to whether it could successfully integrate with Securities America. Mitch Vigeveno, CEO of Turning Point stated, The transfer from P1 or P2 to P3 will be hard, cumbersome, and undesirable. Securities America has its own system with its built-in clearing firm and own portfolio and management tools; there are operational hurdles; their service models are totally dependent on National Financial, while Amex is not. They ll need to get product continuity to migrate to P3. Ameriprise Financial was Doubted as to Whether it Could Successfully Integrate with Securities America Comment on Integration Difficulties With Securities America The transfer from P1 or P2 to P3 will be hard, cumbersome, and undesirable. Securities America has its own system with its built-in clearing firm and own portfolio and management tools; there are operational hurdles; their service models are totally dependent on National Financial, while Amex s is not. They ll need to get product continuity to migrate to P3 Mitch Vigeveno Turning Point 2000 Source: 1/1/00 Turning Point Conversation (Vigeveno); Tiburon Research & Analysis Ameriprise Financial s senior management vowed to allow crossover by representatives between Securities America and Ameriprise Financial. This is seen as a gamble because of Securities America s heftier commissions and broad product offering. Ameriprise Financial s Securities America runs primarily as an independent entity, coordinating only in buying power, best practices, management training, and legal & compliance. Ameriprise Financial s Securities America is measured by Ameriprise Financial on three metrics, including representative growth, revenue growth, and net income. Ameriprise Financial s three platform strategy has been substantially abandoned. 83

Ameriprise Financial Broker/Dealer Ameriprise Financial s first business is its core Ameriprise Financial business. The core business has 1,295 employees, 3,700 offices, 12,592 reps, 2.7 million client accounts, 466 billion client assets under administration, and $8 billion revenues. Ameriprise Financial has 1,295 corporate office employees. Ameriprise Financial has 3,700 offices, reportedly with plans to close dozens more in areas with less wealth. Ameriprise Financial s average representative office has 1.3 partners, 0.3 licensed representatives, and 1.2 administrative support staff & other employees. Ameriprise Financial s employees in the average representative office are more than half partners and licensed reprentatives. Specifically, the average representative office is comprised 46% of partners, 11% of licensed reps, and 43% of administrative support staff & other employees. Ameriprise Financial has 12,592 representatives, up 40% since 1997. Ameriprise Financial Has 12,592 Representatives, Up 40% Since 1997 Ameriprise Financial Representatives Ameriprise Financial has more than 75 representatives per office, which is up slightly since 2001. 8,000 8,340 8,800 10,350 11,500 11,700 12,121 12,354 12,440 12,592 Ameriprise Financial s average representative is 38 years old, has been a representative for 11 years, started or joined his or her current business 10 years ago, and joined Ameriprise Financial 9 years ago. 1995 1996 1997 1998 2001 2002 2003 2004 2005 2006 Source: 9/3/07 Investment News (SIFM A); 2/27/07 Ameriprise F inancial Annual Report; 10/25/05 American Banker; 9/29/05 Wall Street Journal; 9/26/05 Business Week; 8/05 Financial Planning; 9/04 Registered Rep; 8/03 Bob V eres Newsletter; 8/03 Financial Planning; 3/03 Ticker; 7/02 Money; 7/99 Ameriprise Financial Brochure; 12/31/98 American Express Annual Report; 1/19/98 Wall Street Journal; Tiburon Research & Analysis Ameriprise Financial s platform II representatives would mostly not cut it at a major wirehouse; only 15% of them produce greater than $250,000 in gross. Ameriprise Financial representatives were almost one-third captive stockbrokers prior to joining the company. Ameriprise Financial representatives are only 13% OSJ managers. Ameriprise Financial representatives most common licenses & dsignations include series 7, state insurance licenses and series 63. Ameriprise Financial advertises that 35% of its representatives have a certified financial planner designation. Ameriprise Financial claims that retention rate among representatives with five or more years experience is between 92% and 96%. 84

Ameriprise Financial has seen 7 of its top 100 advisors depart as the spinoff from American express looms. Ameriprise Financial opened up its offerings of insurance products and variable annuities in a recruiting move to lure away wirehouse brokers wanting to keep trailing commissions. Ameriprise Financial ran recruiting ads in major publications aimed at career-switchers. Ameriprise Financial has varying production requirements for platform I and platform II representatives, along the lines of production, financial planning, client satisfaction, and quality of advice. Ameriprise Financial has 2.7 million client accounts, up 20% since 2004. Ameriprise Financial s customers are only one-third American Express card holders. Ameriprise Financial s average rep office has 156 clietns, up 3% since 2002. Ameriprise Financial s average representative office has 117 clients per partner and 106 clients per employee. Ameriprise Financial has 237 client accounts per representative, up 65% since 2001. Ameriprise Financial executives urge its financial advisors to focus on clients with assets over $100,000. Ameriprise Financial offers gold and platinum services to those clients with more than $100,000 with the firm. Ameriprise Financial offers American Express platinum credit card holder membership rewards bonus points for a free consultation with a platinum financial services financial advisors. Ameriprise Financial has $173 billion life insurance in-force. Ameriprise Financial has $466 billion in client assets, up 100% from 2002. Ameriprise Financial has $33.5 million in assets under administration per representative, on a steady incline since 2001. Ameriprise Financial s average representative office has nearly $30 million in client assets, up Ameriprise Financial Has $466 Billion in Client Assets, Up 100% From 2002 Note: Another source said that client assets dipped to $175 billion in early 2002 Source: 2/27/07 Ameriprise Financial Annual Report; 9/26/05 Business Week; 8/05 Financial Planning; 8/05 Bob V eres Newsletter; 6/16/05 Am eriprise Financial Web Site; 7/29/03 American Banker; 10/29/02 Wall Street Journal; 9/1/02 Wall Street Journal; 7/02 Money; 1/19/98 Wall S treet Journal; Tiburon Research & Analysis Ameriprise Financial Assets Under Administration ($ Billions) $150 $172 $275 $253 $231 $365 $408 $428 $466 1996 1997 2000 2001 2002 2003 2004 2005 2006 85

7% since 2002. Ameriprise Financial s average representative office has nearly $25 million assets per partner and $20 million assets per employee. Ameriprise Financial s clients are more than one-half moderate net worth households and high net worth households & institutions. Ameriprise Financial s new client assets are more than one-half from retirement plan rollovers and moved from full-service brokers. Ameriprise Financial has $8 billion revenues, up 100% since 1996. Ameriprise Financial s average representative office generates $263,000 revenues, up 10% since 2002. Ameriprise Financial generates better than $500,000 in annual revenues per reprentative, a number likely to be overstated due to the firm s other businesses being included in the tally. Ameriprise Financial Has $8 Billion Revenues, Up 100% Since 1996 $4.1 Source: 2/27/07 Ameriprise Financial Annual Report; 8/05 Financial Planning; 6/30/05 LPL Conversation (Lopez); 6/16/05 Ameriprise Financial Web S ite; 2/2/05 American Banker; 2/2/05 The Daily Deal; 8/03 Financial Planning; 10/29/02 Wall Street Journal; 12/31/98 American Express Annual Report; Tiburon Research & Analysis $4.6 Ameriprise Financial Revenues ($ Billions) $5.1 $5.0 $5.6 $6.1 $7.0 $7.5 $8.1 1996 1997 1998 2001 2002 2003 2004 2005 2006 Ameriprise Financial s average representative office generates 91 basis points of revenues on client assets. Ameriprise Financial s average representative office generates $1,689 per client. Ameriprise Financial representatives average office generates $197,000 revenues per partner and $179,000 revenues per employee. Ameriprise Financial representative revenues are nearly three-quarters generated from up-front product commissions and trailing product commissions. Ameriprise Financial s average representative office s expenses are mostly accounted for by $70,000 of representatives compensation and administrative support compensation. Ameriprise Financial s average representative office s expenses are 55% composed of representatives compensation and administrative support compensation. Ameriprise Financial is believe to be an insurance company in disguise by some analysts, with 70% of its earnings coming from the sales force attributed to insurance & annuity sales. 86

Ameriprise Financial s average representative office earns more than $125,000 in pretax profits, up 10% since 2002. Ameriprise Financial s average representative office earns more than a 50% pre-tax profit margin. Ameriprise Financial s average representative office generates $886 pre-tax profits per client. Ameriprise Financial s average representative office generates more than $100,000 pretax profits per partner and nearly $100,000 pre-tax profits per employee. Ameriprise Financial representatives are satisfied with the company, giving it an overall score of 6.9 out of 10. Ameriprise Financial representatives believe that the company is a good place for new representatives to learn the business. Comments include: Good place to learn American Express is a good place to start if you re new to the business American Express has an odd business model. It s a great place to learn and move on; they basically train their future competition High turnover American Express is losing a good chunk of its sales force American Express can t seem to retain clients; it can t retain reps either American Express continuously struggles to hang onto reps American Express has lost a lot of reps to other broker/dealers like LPL Emphasis on proprietary products It s a more proprietary environment at American Express, which takes away from its supposedly independent model There s an emphasis on proprietary products at American Express I don t appreciate the fact that American Express pushes so many of its proprietary products it s not focused on the needs of the client Reps at American Express push American Express products because they charge fees for non-proprietary products There are too many restrictions at American Express such as the ticket charges for using non-proprietary products General comments American Express new compensation plan offers competitive payouts American Express financial planning methods aren t that impressive American Express is too big in size and too insincere in attitude Ameriprise Financial representatives invest client assets in a wide variety of products, including mutual funds, annuities, and life insurance. Ameriprise Financial is the leading seller of universal and whole life insurance. Ameriprise Financial has 12,592 representatives. Ameriprise Financial has mutual fund net sales of $35 billion, up 15% after several years of decline. 87

Ameriprise Financial offers mutual fund from 25 Ameriprise Financial offers mutual funds from 250 families. Ameriprise Financial offers over 3,000 mutual funds, which has increased nearly 25% since 2000. More than three-quarters of the mutual funds offered by Ameriprise Financial representatives are no-load funds. Ameriprise Financial s deal with Charles Schwab & company aids its advisors. Previously offered a marketplace of 500 mutual funds to its advisors. Deal permits representatives to sell the 2,000 mutual funds from Schwab s Mutual Fund Marketplace (1,500 no-load and 500 load funds). Online discount brokerage also available for these funds. Schwab connection will be invisible to clients, but representatives tack on an additional $10 to Schwab s $29.95 fee. Almost two-thirds of Ameriprise Financial clients assets in mutual funds are in proprietary funds. One representative noted that Ameriprise Financial s proprietary mutual funds offering has expanded drastically. Comments for proprietary funds: the product offering has changed a lot in the past year; it used to be lacking, especially in proprietary mutual funds, but has expanded drastically. Comments for non-proprietary funds: reps can sell Ameriprise, Putnam Funds, Franklin Templeton, Goldman Sachs, and Calvert Funds. Ameriprise Financial s select funds program accounts for half of its non-proprietary mutual fund sales. Ameriprise Financial select funds program offers reduced or waived ticket charges on 700 mutual funds. Ticket charges range from $15-$85 on non-program funds and program funds carry $5-$15 ticket charges. Ticket charges waived on mutual fund transactions of $10,000 or more. Trying to build goodwill with preferred partner mutual fund companies (revenue-sharing program). Ameriprise Financial charged its representatives as much as $85 for each American Funds transaction, up from a $20 fee, in a move to encourage the sale of its proprietary funds. Ameriprise Financial s fund selection for the select funds program is based on five factors, including brand recognition, product support, breadth of product line, performance, & current sales with Ameriprise Financial. Ameriprise Financial s select funds program participants include well established mutual fund companies. Ameriprise Financial representatives most widely utilized mutual fund companies include American Funds, AIM, & Oppenheimer. 88

Ameriprise Financial representatives are most satisfied with Eaton Vance and Oppenheimer mutual funds. Ameriprise Financial representatives are most satisfied with telephone client support and fund family performance provided by mutual fund companies. Ameriprise Financial has relationships with multiple variable & fixed annuity providers. Ameriprise Financial offers multiple variable & fixed annuities. Ameriprise Financial had $8.5 billion in annuity sales in 2002, making them the 11 th largest annuity writer. Ameriprise Financial has over $50 billion in deferred annuities in force, up nearly 10% in 2004. Ameriprise Financial offers proprietary variable & fixed annuities through its IDS product line. Offering includes: IDS life flexible portfolio annuity, index 500 annuity, immediate annuity, employee benefit annuity, and retirement advisor variable annuity (proprietary product, and 4th most popular variable annuity in US.) Ameriprise Financial s reps more than one-half sell annuities. Ameriprise Financial representatives most commonly used annuities include Prudential (American Skandia) and Pacific Life. Ameriprise Financial representatives are most satisfied with AIG, Putnam, and Pacific Life s annuities offerings. Ameriprise Financial s key area is insurance. Ameriprise Financial has only sold Ameriprise Insurance to one-quarter of its clients. Ameriprise Financial has life insurance offerings. Offerings include: Term Life, Fixed, Whole, or Traditional Life; Fixed Universal Life; Variable Life; and Variable Universal Life. Ameriprise Financial has nearly $150 billion in life insurance in force, up steadily since 1996. Ameriprise Financial representatives most popular insurance products are term life, disability, and long-term care. Ameriprise Financial representatives most commonly utilized insurance companies are Prudential (American Skandia), Genworth Financial, & Pacific Life.. Ameriprise Financial representatives are most satisfied with Lincoln Benefit, Pacific Life, and Genworth Financial s insurance offerings. Ameriprise Financial offers proprietary IDS life products. Comments include: IDS strengths are really in long-term care, variable life, and some disability. It is 89

comprehensive and extremely good in its benefits offerings (e.g., strong home care). It is sort of the Rolls Royce of long-term care, so if a client needs something different, I d go outside. If a client needs term life or some types of disability, then I know these are not IDS strengths and I ll go outside for these. Ameriprise Financial also offers health and property & casualty insurance. Ameriprise Financial utilizes diversified brokerage services as independent GA for nonproprietary products. Ameriprise Financial has fee-accounts business. Ameriprise Financial has fee-accounts. Ameriprise Financial has nearly $20 billion in fee-accounts assets under management. A number of Ameriprise Financial representatives utilize fee-accounts, which has increased since 2001. Specifically, 60% of reps utilize fee-accounts, stable since 2001. Ameriprise Financial has three key fee-account programs, including Its strategic portfolio services advantage, wealth management service program, and premier portfolio services. Ameriprise Financial s separately managed accounts program, wealth management services, introduced in 1985, had been a long standing but consistently evolving product before it was rolled into American Express UMA. Ameriprise Financial s wealth management services recently become a strategic initiative. Supports American Express affluent strategy and capitalizes on recent market trend away from mutual funds and towards separately managed accounts. Recent investments in both product marketing and infrastructure designed to increase advisor readiness and improve the product experience. Ameriprise Financial s wealth management services fee schedule starts at 125 basis points and declines with account Ameriprise Financials Wealth Management Services Has a Funnel Process for Selecting New Separate Account Managers size. Ameriprise Financial has been steadily growing the number of products in its separately managed accounts program. Specifically, from 4 in 1985 to 57 in 2002. Ameriprise Financial now has 25 managers with 57 products in its wealth management services program. Ameriprise Financials Separate Account Manager Selection Process Initial Screening In-Depth Reviews Selection New Program Managers All Managers Focus on categories that need expansion (gaps, advisor requests) Develop initial pool of candidates (brand names, top quartile performers, strategic partners) Screen candidates against high-level requi rements (performance, risk, style) Preliminary telephone suitability check Send out RFIs to likely candidates and review responses in detail with phone calls or on-site visits Perform further qualitative and quantitative analysis of candidates Develop research team recommendations Receive approval from WMS executive team Complete contract negotiations Ameriprise Financials wealth Source: 10/1/02 American Express Presentation (Lennig); Tiburon Research & Analysis 90

management services has a funnel process for selecting managers. new separate account Ameriprise Financial had introduced a multiple style portfolio in 2002 before rolling it into premier portfolio services. Ameriprise Financial has a flat maximum fee for its diversified portfolio services feeaccount program. Program fees range from 2% for $50,000 to $100,000 and 15 for over $5 million. Ameriprise Financial s multiple style portfolio had two key third-party managers, including CDC IXIS and Salomon Brothers. Ameriprise Financial launched a unified managed account program called premier portfolio services in 2003. Ameriprise Financial previously had a mutual fund wrap program called strategic portfolio services advantage. Program is a traditional blended mutual fund wrap account program / fee-based brokerage account program with 1,500 mutual funds offered from 175 fund families; also includes individual securities. Program has $17 billion assets under management. Ameriprise Financial has a flat maximum fee for its strategic portfolio services feeaccount program. Specifically, the fee is 2%. Ameriprise Financial representative utilize Lockwood s turnkey asset management program. Those Ameriprise Financial representatives who have utilized Lockwood are moderately satisfied, giving it an overall score of 6 out of 10. Ameriprise Financial representatives provide services through the company s registered investment advisor. A number of Ameriprise Financial representatives provide services through their own registered investment advisor, which has increased since 2001. Ameriprise Financial Representative s Most Commonly Utilized Custodians Include Fidelity Investments and The Charles Schwab Corporation Ameriprise Financial Representative By Custodian Utilization Ameriprise Financial representative s most commonly utilized custodians include Fidelity Investments and The Charles Schwab Corporation. Fidelity Investments The Charles Schwab Corporation 12% 12% Ameriprise Financial representative are most satisfied with The Charles Schwab & company. TD Ameritrade Source: 5/03 Independent Rep Best Practices Survey; Tiburon Research & Analysis 6% 91

Ameriprise Financial s transition to fee-accounts business was perceived to be difficult by some. Ameriprise Financial offers a comprehensive selection of individual securities. Ameriprise Financial is self-clearing. Ameriprise Financial representatives only mentioned Pershing as the clearing broker they used. Ameriprise Financial representatives who utilize Pershing are not very satisfied, giving it only a 1 out of 10. Ameriprise Financial individual securities commission schedule varies. Ameriprise Financial has expanded its alternative investments offerings to include Hedge Funds & Managed Futures, Venture Capital & Private Equity, Real Estate, and Other Alternative Investments. Ameriprise Financial also offers other products & services such as limited partnerships and CDs. Ameriprise Financial s financial planning & advice services fees rose 15% to nearly $140 million in 2004. Three-quarters of Ameriprise Financial s total sales were generated by financial plans & advice services. Almost half of Ameriprise Financial s clients have received financial planning services and they account for nearly three quarters of the firm s sales. Ameriprise Financial s financial planning clients stay at least ten years three-quarters of the time. Ameriprise Financial offered proprietary financial planning software in 200. Th sofwater is called Financial Advisory Services (FASware). Top-five accounting firm allegedly rated it as the best out of ten planning software packages tested. Ameriprise Financial retirement services launched a retirement profile program for representatives and their clients. Representatives receive personalized analysis of retirement savings needs based on payroll, 401k, and other defined contribution plans. Free online educational program for representatives clients and client company employees. Ameriprise Financial s one financial account program is a series of banking, mortgage, and lending products aimed at attracting new clients. Ameriprise Financial certified deposits sales are approximately $3 billion annually. 92

Ameriprise Financial s trust company is offering more services to its advisors. Ramping up its menu of trust services and adding trust specialists as it prepares for a nationwide push. Company wants to keep relationships in-house rather than referring clients elsewhere for trust services. Currently trust specialists are located in three states (FL, MA, WI) to assist representatives in each state. Ameriprise Financial is adding new estate planning and charitable remainder trust services. Applied for a federal thrift charter to speed the growth of its trust business. Ameriprise Financial representatives utilize specialized trust company. Ameriprise Financial launched a new service to support 401K programs of small and medium sized businesses to complement its established large company offering. Ameriprise Financial representatives are satisfied with the company s payouts & fees, giving such an average score of 7.5 out of 10. Ameriprise Financial has developed a new compensation plan. Score card system provides annual snapshot of each rep s practice including: key emphasis, tenure, new client relationships, number of financial plans delivered, and types of product sold. Initially announced in 2002 which caused discontent among representatives and concern over product orientation (e.g., higher payout for mutual funds instead of exchange traded funds). Many argued that they would receive a lower payout on the new plan and some predicted that smaller representatives would be forced to leave, placing additional client burdens on the remaining representatives. Ameriprise asserted that most representatives would benefit from the new plan. Company changed payout to 79%, 82%, 85%, 88%, or 91% for representatives as opposed to the former 85% or 91%. The plan is difficult to understand and interpret. Ameriprise Financial s payouts & fees schedule is complicated due to its three tier model. Ameriprise Financial is increasing payouts for non-proprietary funds from 67% to 85%. Ameriprise Financial s top step platform II representatives still only generate $663,000 in gross dealer concessions, and take home just over $500,000 after the firm skim & fees. Ameriprise Financial s payouts range from 40% to 85% depending upon the representatives platform affiliation, according to representatives: Platform I Packaged Products Payouts P1 is on a sliding scale with a guaranteed draw; the higher the draw you take, the lower the payout; the payout is 40%-50% depending on how much of a draw the representatives take Platform II Packaged Products Payouts P2 is at 85% across the board, but there s a slight advantage for the Platinum team people with a slightly higher payout Ameriprise Financial representatives have historically incurred a handful of startup & association fees for being with the firm. Ameriprise Financial s use of GDCS complicates pricing even further. 93

Ameriprise Financial fee-account administration fees are average. Ameriprise Financial platform I representatives to do not pay transaction fees and/or ticket charges for packaged products. Ameriprise Financial representative fees include infrastructure, licensing, and insurance fees. Ameriprise Financial operations departments include various departments. Ameriprise Financial representatives have a national forum for voicing concerns called National Franchise Advisory Council. The goals include: attempt to obtain group medical coverage, raise their grievances with Ameriprise, and increase telemarketing support and launching new 529 plans. Members of the steering committee have already met with Ameriprise. The Council s president is Kathleen Thomas. Ameriprise Financial representatives are moderately satisfied with the company s customer service & operations, giving such an average score of 6.5 out of 10. Ameriprise Financial representatives have positive comments about the company s customer service & operations, noting they will do whatever is necessary to help the representatives; others note that mistakes have increased due to the employees workloads. Comments include: Positive Comments If there s an operational problem with something at the home office, such as lost checks, things that have to do with timing issues, etc. Ameriprise Financial stands by what the rep says and will back date things In helping their advisors, on a scale of 1-10, it s an 8; there s a lot of restructuring because lots of things are getting outsourced, but there s a big effort to help the reps There s a Client Relations Department for client complaints; the managing principle will help, or Ameriprise Financial will hire counsel; but the new world may change this Ameriprise Financial is very, very good, very fair; on the rep s behalf, they will do everything in their power to assist reps in reasonable outcomes; there s wonderful documentation; they will bend over backwards Possible Areas For Improvement Within the last year, people have been overloaded, so there are more mistakes and reps need to spend more time on problems than before There s a lot of turnover you get a decision tree when you call the general number and have to type in the number to get connected to that area; there s a structure to the process, but it depends on the individual case The frustrating ones are because of the skill or attitude of the people on the phone; outside of the people issue, on the insurance writing side, the minutiae can get frustrating Ameriprise Financial product support includes various services. 94

Ameriprise Financial representatives have positive comments about the firm s financial planning support, mentioning the support staff is very knowledgeable. Comments include: Positive Comments Ameriprise Financial is was one of the best firms at dealing with financial planning; there s a comprehensive range of tools, and all the people who work there are competent in the financial planning process, and can prepare their own deep analysis If the reps need help, they get expert assistance They can get your answer in a timely manner, usually almost immediately Toll free call to get assistance from how to fill out a form to concepts, like how to serve a client s particular situation There is a financial planning option on the menu for the toll free consulting services number Ameriprise Financial offered a technology kit called advisor link for no charge in 2000, which provided representatives with a handful of software applications. Kit includes: Microsoft Office, Microsoft Windows, Advisor Connect (advisor intranet), Lotus Notes email, Planner Access to Client Data (PACD), sales & service tools, FASware (financial planning software). Ameriprise Financial representatives are moderately satisfied with the company s product, sales & marketing, and business building support, giving such an average score of 6.9 out of 10. Ameriprise Financial sales & marketing support includes advertising spending on a national level. Support features include: ads, newsletters, brochures, direct mailings, conference presentations, web site building, and client referral programs. Ameriprise Financial has a comprehensive, sophisticated, and specialized menu of marketing support tools. Ameriprise Financial representatives rely on passive and proactive client referrals to capture new clients assets, nearly two-thirds of the time. Ameriprise Financial representatives utilize web site developers. Ameriprise Financial representatives are satisfied with web site developers. Ameriprise Financial representatives utilize newsletters. Ameriprise Financial representatives are satisfied with newsletters. Ameriprise Financial representatives utilize seminar materials. Ameriprise Financial representatives are satisfied with seminar materials. Ameriprise Financial representatives top priorities are to retain clients, increase income, increase assets under management, increase revenues, and integrate technology. 95

Ameriprise Financial representatives believe the need to offer more services is their biggest threat & challenge. Ameriprise Financial business building support includes leads and a marketing & business plan. Ameriprise Financial allows platform II representatives to transfer their businesses upon eight conditions. Conditions include: accrued monetary obligations are settled, rep is in good standing, executed general release, appropriate licensure, new contract, claim of liability, training, and transfer fees. Ameriprise Financial representatives most prevalent written business documents are compliance manuals and business plans. Ameriprise Financial also has a well-regarded small business program. Program includes: quarterly management report, financing, corporate charge card, and discounts at leading vendors such as IBM, FedEx, Hilton, Mobil, and Hertz. Ameriprise Financial representatives mostly plan to retire in more than fifteen years. Specifically, 86% of reps plan to retire in more than fifteen years. Ameriprise Financial representatives plan to sell to a partner or employee when they retire in about two-thirds of cases. Ameriprise Financial has offered its continuity of practice program since 1998. Designed for transitions between two Ameriprise Financial franchise owners; provides step-by-step instructions, has a right of first refusal, needs to approve all transactions, and charges a $1,000 transfer fee. Ameriprise Financial s Continuity of Practice Program is Comprised of Five Components. Components include: Moss Adams workbook, designed for internal transfers, web site, scorecard, and financing. Ameriprise Financial advisors are encouraged to establish buy/sell agreements to assure smooth transitions in the event of death or disability. Encourages financial advisors to execute an agreement with another financial advisor to transfer their business immediately upon death or mental or physical incapacity. If no such agreement exists at the time of death or disability, in the interest of good client relations, Ameriprise will operate the practice for up to 90 days for a management fee while a buyer is identified by the executor of the estate. If no buyer is identified after 90 days, Ameriprise may assume that the practice has been abandoned and may take ownership, such transfers are subject to the same conditions as a retirement scenario. Ameriprise Financial has the right of first refusal for buying its advisors businesses. Has established a provision in its Franchise Agreement that states it has right of first refusal in buying any rep s business. If a financial advisor enters into a succession planning agreement less than 90 days prior to the proposed transfer date, Ameriprise has the right to purchase the business at any time at the same terms. If the agreement is entered into 90 days or more prior to the planned transfer, Ameriprise has the right to purchase the business within 30 days of the GVP receiving the signed succession planning agreement. 96

Ameriprise Financials American Express predecessor offered representatives that were also certified public accountants the opportunity to maintain their certified public accountant practice separate from the independent advisor business. Due diligence review required for representatives at a cost of $6,000 - $9,000 one-time fee. American Express Centurion Bank provides loans for Ameriprise Financial advisors. Referred to as Continuity of Practice Business Loan or Succession Planning Business Loan. Available solely to finance the acquisition of an existing Ameriprise Advisor s business (as described in section 14 of the Franchise Agreement). The minimum loan amount is $10,000 and the maximum amount and term depend on the credit rating of the borrower and other factors, such as the cost of the business being acquired. The standard promissory note that Centurion requires is included in the offering circular. The rate of interest varies depending upon market conditions; loans in early 2002 were at 6.95% with a three year term and payments due monthly. These loans are unsecured and may be prepaid without penalty. If there is a default on the promissory note, it is deemed to be a default under the Franchise Agreement and Ameriprise can take any needed action. Ameriprise Financial representatives most commonly utilized financial advisor coaches include Bill Cates, Steve Moeller, Bill Bachrach, and Dan Sullivan. Ameriprise Financial technology offerings include new client sales, calculators, financial planning, asset allocation and stock quotes. Ameriprise Financial offers free online trading to accounts greater than $25,000, called American Express Brokerage. Accounts > $25,000 can buy stocks online for free (sells are $14.95). Accounts > $100,000 can buy and sell stocks online for free. Trades above 3,000 shares are $0.03/share. Sales of stocks bought on same day are $14.95. Trades are $14.95 at lower asset levels. Ameriprise Financial s consolidated statement offering garners generally positive comments. Comments include: Positive Comment The statement even includes nonproprietary mutual funds and insurance Client statement is colorful and presented nicely All non-proprietary funds not in fee-accounts are cumulated inside a brokerage account on the statement All Amex stocks have more detailed information Amex funds show individualized returns for that individual investor, dollar cost averaging, when money was put in and out Areas of Improvement Rep s copy of the statement is plain and generic looking Ameriprise Financial representatives are moderately satisfied with the company s technology offerings & support, giving such an average score of 6.3 out of 10. Ameriprise Financial representatives most utilized financial planning software applications are Financial Profiles and Morningstar. 97

Ameriprise Financial representatives are very satisfied with financial profiles and Morningstar, giving both average scores of 10 out of 10. Ameriprise Financial representatives most widely utilized Morningstar and Sungard/Frontier Allocation Master asset allocation software. Ameriprise Financial representatives are most satisfied with Ibbotson/portfolio optimizer and Morningstar asset allocation software. Ameriprise Financial representatives mostly utilized Morningstar data & research services. Ameriprise Financial representatives are satisfied with most data & research services, especially Standard & Poor s. Ameriprise Financial representatives mostly utilized Advent (Axys) portfolio management program. Ameriprise Financial representatives who utilize advent (Axys) portfolio management software are satisfied, giving it an average score of 9 out of 10. Amerprise Financial representatives mostly utilized ACT contact management software. Specifically, 54% of reps utilize ACT. Ameriprise Financial representatives who utilize pro tracker are very satisfied, giving it an average score of 10 out of 10. Ameriprise Financial representatives are moderately satisfied with the company s training & education opportunities, giving such an average score of 6.3 out of 10. Ameriprise Financial has top producers trips, annual conferences, & regional meetings. Ameriprise Financial representatives have attended the company s annual conferences one-half the time. Ameriprise Financial s regional meetings received the highest satisfaction scores from Ameriprise Financial representatives. Ameriprise has a comprehensive training offering, much of which comes with a cost. Ameriprise Financial representatives most widely read Financial Advisor and Financial Planning. Specifically, 76% of reps read both Financial Advisor and Financial Planning. Ameriprise Financial representatives gave Bloomberg wealth manger, journal of financial planning, wall street journal, and Forbes the highest satisfaction scores of publications read amongst. Ameriprise Financial representatives most visited Morningstar advisor among web sites. 98

Ameriprise Financial representatives who have visitied Quicken, Morningstar advisor, and CNBC web sites gave them the highest satisfaction scores from who have visited the sites. Ameriprise Financial created an investment program targeting women to capitalize on the trend of increasing female investing influence. Offers seminars to female clients and prospects titled Strong Women, Powerful Finance Strategy. Ameriprise Financial started an online brokerage firm in 1999 and now over threequarters of customer service is completed online. Specifically, 80% are now online customers. H&R Block Advisors Ameriprise s second business is H&R Block Financial advisors which it plans on rolling into Ameriprise s employee platform. The company is based in Detroit, MI and has 260 offices, 1,100 reps, $28 billion assets under administration, and was acquired in 2008 for $315 million by Ameriprise. Ameriprise Financial s H&R Block Financial Advisors has three core strategies in terms of selling financial advice via its financial advisors, including leveraging intimate knowledge, targeting a unique market, and counting on a long-term transformation. Ameriprise Financial s H&R Block Financial Advisor s cut its number of complex managers from 50 25 in 2006. Ameriprise Financial s H&R Block has 260 financial advisory offices, down significantly in recent years. In 2003, Ameriprise Financial s H&R Block has 400 financial advisor offices, 360 in 2004 and only 260 in 2005. Ameriprise Financial s H&R Block has 1,100 financial advisors, still down since its 1999 acquisition of Olde Financial Corporation. In 1999, Ameriprise Financial s H&R Block had 1,400 financial advisors. Ameriprise Financial s H&R Block s financial advisors are almost all men. Specifically, 95% of financial advisors are men. Ameriprise Financial s H&R Block Financial Advisors Has 1,100 Financial Advisors, Still Down Since Its 1999 Acquisition of Olde Financial Corporation 1,400 H&R Block Financial Advisors 1,030 1,060 1,100 1999 2003 2004 2006 Source: 5/27/06 H&R Block Web Site; 4/15/06 H& R Block Letter (Sigler); 11/7/05 H& R Block P ress Release; 8/1/05 H& R Block Press Release; 11/30/04 H& R Block Press Release; 9/2/04 H&R Block Press Release; 4/04 H&R Block Brochure; Tiburon Research & Analysis Ameriprise Financial s H&R Block Financial Advisors average rep is young, in his upper 30s Ameriprise Financial s H&R Block Financial Advisors average rep is 48 years old, has been certified as a CPA or EA for 19 years, started or joined his or her current business 14 years ago, and added financial planning to his or her current business 9 years ago 99

Ameriprise Financial s H&R Block reps most commonly have series 65 and state insurance licenses. Other common licenses are series 7, 63, and 6. Ameriprise Financial s H&R Block has been advertising to hire financial advisors to help its struggling financial advice business through its Preferred Partners Program. The firm is planning to hire 1,000 advisors over the next three years. Ameriprise Financial s H&R Block intends to build its financial advice business by building relationships with clients who know and trust its name, through national advertising, through competitive commission plans, and by incubating a culture supporting entrepreneurs. Ameriprise Financial s H&R Block Financial Advisors plans to grow its financial advisory business by teaming groups of tax preparers with financial advisers. Ameriprise Financial s H&R Block reportedly has an attrition problem with financial advisors leaving Ameriprise Financial s H&R Block investment services. Efforts to recruit financial advisors is mixed with the number of advisors remaining essentially flat. Experienced higher than expected advisor attrition Ameriprise Financial s H&R Block suspects the problem lies in the transition of tax preparers into financial advisors. Difficulties in turning number crunchers into sales people. Ameriprise Financial s H&R Block offered its tax advisers computer prompts pointing them to different investment recommendations. Ameriprise Financial s H&R Block financial advisors average rep office has over 50 financial planning clients, down 23% from 2002. Ameriprise Financial s H&R Block financial advisors clients are nearly one-fifth financial planning clients. Specifically, 18% are financial planning & tax clients while 82% are tax only clients. Ameriprise Financial s H&R Block financial advisors average rep offie has 33 financial planning clients per partner and 8 financial planning clients per employee. Ameriprise Financial s H&R Block financial advisors expects one-fifth of its tax clients to benefit from financial advice. Ameriprise Financial s H&R Block financial advisors target $100,000 $1 million clients. Ameriprise Financial s H&R Block Financial Advisors Expects One- Fifth of its Tax Clients to Benefit from Financial Advice H&R Block Tax Clients Expected to Benefit from Financial Advice Financial Advice 20% Ameriprise Financial s H&R Block financial advisors target clients nearing retirement age or those already retired. Ameriprise Financial s H&R Block has $30 billion assets No Benefit from Financial Advice 80% Source: 3/8/04 Investment News; Tiburon Research & Analysis 100

under administration, consistent since 2005. Ameriprise Financial s H&R Block is planning for advisory assets under administration to almost double. Ameriprise Financial s H&R Block financial advisors average rep office has $3 million in client assets, up 18% since 2002. Ameriprise Financial s H&R Block financial advisors average rep office has $1 million assets per partner and leess than $1 million assets per employee. Ameriprise Financial s H&R Block financial advisors has over three-quarters of reps clients as moderate net worth households. Specifically, 22% have less than $100,000 investable assets, 42% have $100,000-$1 million, and 36% have $1 million+ and institutions. Ameriprise Financial s H&R Block financial advisors has an average client account of over $70,000, up substantially in 2006. Specifically, average client account was $64,456 in 2005 and $72,914 in 2006. Ameriprise Financial s H&R Block Financial Advisors Has an Average Client Account of Over $70,000, Up Substantially in 2006 H&R Block Financial Advisors Average Client Account Size $64,456 $72,914 Ameriprise Financial s H&R Block financial advisors has almost three-quarters of its clients with less than $50,000 in their accounts. Specifically, 70% of client accounts are less than $50,000, 28% are $50,000- $500,000, 2% are greater than $500,000. Source: 6/5/06 Investment News; Tiburon Research & Analysis 2005 2006 Ameriprise Financial s H&R Block financial advisors average rep office has $38,000 assets per financial planning client. Ameriprise Financial s H&R Block rep offices new client assets are half moved from fullservice brokers. Specifically, the other 50% came 10% from periodic investments from earnings, 10% retirement plan rollovers, and 30% other sources. Ameriprise Financial s H&R Block s Ameriprise Financial s H&R Block investment services generates almost $200 million in revenues. Specifically, it generates $190 million revenues. Ameriprise Financial s H&R Block financial advisors average H&R Block rep office generates over $250,000 revenues, which is a 165% increase since 2002. Ameriprise Financial s H&R Block s Ameriprise Financial s H&R Block Investment Services introduced minimums for low producing brokers in 2006. They are giving four months to meet goals or let go. 101

Ameriprise Financial s H&R Block financial advisors average rep office generates 156 basis points of revenues on client assets. Ameriprise Financial s H&R Block financial advisors average H&R Block rep office generates $602 financial planning revenues per financial planning client. Ameriprise Financial s H&R Block financial advisors average rep office generates over $100,000 revenues per partner and more than $25,000 revenues per employee. Specifically the average office generates $130,000 revenues per partner and $33,000 per employee. Ameriprise Financial s H&R Block financial advisors average rep office charges $100 per hour for hourly services. Ameriprise Financial s H&R Block financial advisors average rep office earns nearly $125,000 in pre-tax profits, up 121% since 2002. Ameriprise Financial s H&R Block financial advisors average H&R Block rep office earns nearly a 50% pre-tax profit margin. Specifically, the pre-tax profit margin is 47% with expenses being 53%. Ameriprise Financial s H&R Block s Investment Services Business reported increasing losses. Specifically, in 2002 the investment service business lost $55 million in 2002 and $128 million in 2003. Ameriprise Financial s H&R Block financial advisors has nearly two-thirds of its rep offices financial planning revenues generated from up-front product commissions. Specifically, 61% of financial planning revenues are generated from up-front product commissions, 22% from trailing product commissions, 13% from investment advisory fees, and 4% from hourly and other fees. Ameriprise Financial s H&R Block financial advisors pitches the four essential building blocks for a secure financial future as accumulation, distribution, protection, & legacy. Ameriprise Financial s H&R Block financial advisors reps invest client assets in a wide variety of products, led by mutual funds, annuities, and fee-accounts. Ameriprise Financial s H&R Block generates its investment revenues from a variety of products, especially individual securities and mutual funds. Client assets are 67% mutual funds, 12% annuities, 10% feeaccounts, 4% individual securities, and 7% insurance Ameriprise Financial s H&R Block Financial Advisors Reps Invest Client Assets in a Wide Variety of Products, Led by Mutual Funds, Annuities, and Fee-Accounts Source: Fee -Accounts 10% Annui ties 12% Individual Securitie s 4% 5/03 Tax Pro Best Practices Survey; Tiburon Research & Analysis H&R Block Client Assets by Product Type I nsura nce & Other Products 7% Mutua l Funds 67% 102

and other products. Ameriprise Financial s H&R Block generates its investment revenues from a variety of products, especially individual securities and mutual funds. Specifically, individual securities generate 39% of revenues, mutual funds 28%, fixed and variable annuities 19%, and wealth management 11%. Ameriprise Financial s H&R Block offers three core types of accounts, including its premium account, professionally managed account, and wealth management account. Ameriprise Financial s H&R Block financial advisors has a controversial account called the express IRA. Introduced in 2001 with accounts typically opened at tax preparation time. Delivered by tax preparers with low minimum balances. Savings vehicle is a money market fund Ameriprise Financial s H&R Block offers proprietary money market funds. Ameriprise Financial s H&R Block offers mutual funds from Mutual Fund Families. Ameriprise Financial s H&R Block offers 3,700 mutual funds. Ameriprise Financial s H&R Block has a large amount of money in mutual fund assets. Ameriprise Financial s H&R Block reps most widely utilize Oppenheimer, Putnam, and American Funds. Ameriprise Financial s H&R Block reps are most satisfied with American Funds, Oppenheimer, and MFS mutual funds. Ameriprise Financial s H&R Block reps are most satisfied with advisor web sites and wholesaler support provided by mutual fund companies. Other high satisfaction scores came from marketing and literature, telephone client support, fund family performance and value added services. Fund family breadth received the lowest satisfaction rating. Ameriprise Financial s H&R Block has over $50 million in mutual fund revenues. Ameriprise Financial s H&R Block has relationships with variable & fixed annuity providers. Ameriprise Financial s H&R Block offers variable & fixed annuities. Ameriprise Financial s H&R Block has variable & fixed annuity assets. Ameriprise Financial s H&R Block reps most often use Lincoln Benefit Annuities. Ameriprise Financial s H&R Block reps are most satisfied with most companies annuities offerings, particularly Lincoln National. Ameriprise Financial s H&R Block has over $35 million in variable & fixed annuity revenues. 103

Amerprise Financial s H&R Block financial advsiors fee-account business, called its professionally managed account program, has grown slowly since its introduction in 2003. Firm making big push. Top producers split on interest level. Offers separate account managers, mutual funds, exchange traded funds, and individual securities. Includes free tax return service and complementary enrollment in premium account Ameriprise Financial s H&R Block has a number fee-accounts. Ameriprise Financial s H&R Block has millions of dollars in fee-account assets. Ameriprise Financial s H&R Block has $1 million in fee-accounts revenues. Ameriprise Financial s H&R Block fee-account programs include a separately manage accounts program and broker wrap, essentially under one umbrella. Ameriprise Financial s H&R Block introduced a separately managed account program in 2003. Traditional separately managed accounts program with slightly more limited menu of managers. There are 28 separate account managers, $250,000 minimum ($100,000 per manager). The program includes quarterly performance report and monthly statements. Ameriprise Financial s H&R Block offers a broker wrap account program. Traditional broker wrap account program and allows the use of both mutual funds and exchange traded funds. There is a $50,000 minimum and includes quarterly performance report and monthly statements. Ameriprise Financial s H&R Block promotes a five step process for both versions of its professionally managed account program. Ameriprise Financial s H&R Block utilizes a questionnaire with its professionally managed account program to help identify clients investment goals and risk tolerance. Ameriprise Financial s H&R Block relies on a third-party investment advisor to do manager due diligence. Ameriprise Financial s H&R Block provides guidelines for discounting on its TAMPs program. Ameriprise Financial s H&R Block reps utilize Turnkey Asset Management Program. Those Ameriprise Financial s H&R Block reps who have utilized TAMPs are very satisfied. Ameriprise Financial s H&R Block reps have most utilized separate account managers. Ameriprise Financial s H&R Block Reps are most satisfied with separate account managers. Ameriprise Financial s H&R Block reps most utilized custodians. Ameriprise Financial s H&R Block reps are most satisfied with TAMPs. 104

Ameriprise Financial s H&R Block offers a traditional selection of individual securities, which is a larger business than previously expected due to the historical roots of olde. Ameriprise Financial s H&R Block offer stocks and bonds. Offered bonds include, municipal, corporate, US treasury securities, and certificate of deposit. Ameriprise Financial s H&R Block reps utilize national financial and Pershing Clearing brokers. Ameriprise Financial s H&R Block reps are very satisfied with national financial, giving it an overall score of 9 out of 10. Ameriprise Financial s H&R Block has an eighteen person research department, delivering proprietary individual securities research. Ameriprise Financial s H&R Block individual securities commission schedule Ameriprise Financial s H&R Block offers life insurance products through Birchtree. Offered products include term life, fixed, whole, or traditional life, fixed universal life, variable life, and variable universal life. Ameriprise Financial s H&R Block offers both long-term care & disability insurance. Ameriprise Financial s H&R Block reps most often sell long-term care and variable universal life insurance. Other top sellers include disability and term life. Ameriprise Financial s H&R Block reps most often sell Lincoln Benefit, Jefferson Pilot, and Hartford insurance products. Ameriprise Financial s H&R Block reps are most satisfied with Jefferson Pilot, Allmerica, and Nationwide s insurance offerings. Other high satisfaction scores went to Lincoln Benefit and Zurich/Kemper while Aeon and Allstate received the lowest satisfaction ratings. Ameriprise Financial s H&R Block also offers some other products & services. These products and services include UITs, limited partnerships, CDs, private placements, financial planning services, property & casualty insurance, banking services, and personal trust services. Ameriprise Financial s H&R Block financial advisor most utilized specialized trust company is Capital Trust Company. Ameriprise Financial s H&R Block reps are satisfied with capital trust company, giving it an overall score of 7 out of 10. Ameriprise Financial s H&R Block reps are considering using new products. Ameriprise Financial s H&R Block financial advisors has nearly half of its reps making referrals to other financial professionals. Specifically, 44% make referrals to other financial professionals. 105

Ameriprise Financial s H&R Block reps are most likely to refer clients to mortgage bankers and estate attorneys. Stockbrokers receive the third largest number of referrals. Ameriprise Financial s H&R Block reps most frequently refer clients to mortgage bankers. Stockbrokers receive the next highest number of referrals. Ameriprise Financial s H&R Block reps report increase income and diversify income as the primary reasons why they entered financial planning. Ameriprise Financial s H&R Block payout grid for mutual funds, annuities, life & other insurance products, individual securities, alternative investments, and other products & services Ameriprise Financial s H&R Block fee-account administration fees are low. Ameriprise Financial s H&R Block has transaction fees and/or ticket charges. Ameriprise Financial s H&R Block rep fees include other charges. Ameriprise Financial s H&R Block customer service is satisfactory. Ameriprise Financial s H&R Block operations departments include various departments (page 1). Operations departments include licensing, new accounts, account transfers, legal and compliance, trading, commissions, and statements. Ameriprise Financial s H&R Block s operations staff includes CFPs. Ameriprise Financial s H&R Block product support includes various products. Product support includes mutual funds, annuities, fee-accounts, life and insurance products, alternative investments, financial planning, insurance planning, and tax planning. Ameriprise Financial s H&R Block investment services offers the investor center which clients can call direct. Ameriprise Financial s H&R Block reps report including financial planning in tax appointments and following up after tax appointments as the primary methods for transitioning tax clients to financial planning. Ameriprise Financial s H&R Block sales & marketing support includes ads, newsletters, brochures, direct mailings, conference presentations, web site building, and a client referral program. Ameriprise Financial s H&R Block reps report that nearly half of new clients assets come from referrals. Specifically, 17% of referrals are passive client referrals, 25% are proactive, 17% of new clients come from networking, 2% direct mailings, and 39% other proactive methods. Ameriprise Financial s H&R Block reps utilizes web site developers. Ameriprise Financial s H&R Block reps primarily utilizes newsletters. 106

Ameriprise Financial s H&R Block reps primarily utilizes seminar materials. Ameriprise Financial s H&R Block financial advisors average H&R Block rep office has 1.3 partners, 0.9 cpa & ea licensed staff, 0.7 non-licensed book keepers, 1.0 admin support, and 0.8 seasonal help & others. Ameriprise Financial s H&R Block financial advisors nearly half of the employees in the average rep office are partners and CPA & EA licensed staff. Specifically, 29% of rep office employees are partners, 17% are CPA & EA licensed staff, 15% are non-licensed book keepers, 22% admin support, and 17% seasonal and other. Ameriprise Financial s H&R Block reps report that their top priorities are to delegate more work to their staffs and position their businesses for sale. Other top priorities include, retain clients, increase income, and increase revenues. Ameriprise Financial s H&R Block reps believe their biggest threat & challenge is employee morale. The second largest challenge is meeting unrealistic client demands. Ameriprise Financial s H&R Block financial advisors average rep office has $139,000 in expenses. Ameriprise Financial s H&R Block rep office owner s compensation accounts for more than $20,000 of the average office s expenses. Specifically, owners compensation accounts for $23,000 of expenses, $13,000 rent/mortgage, $7,000 technology, and $96,000 other. Ameriprise Financial s H&R Block financial advisors rep offices owner s compensation accounts for nearly one-fifth of the average office s expenses. Ameriprise Financial s H&R Block Financial Advisors Rep Office Owner s Compensation Accounts for Nearly One-Fifth of the Average Office s Expenses H&R Block Rep Office Expenses by Type Other Expense s 69% Source: 5/03 Tax Pro Best Practices Survey; Tiburon Research & Analysis Owners Compe nsation 17% Rent / Mortgage 9% Technology Expenses 5% Specifically, owners compensation accounts for 17% of expenses, 9% rent/mortgage, 5% technology, and 69% other. Ameriprise Financial s H&R Block business building support includes several start-up programs. These start-up programs include start-up, marketing, staffing and compensation, benchmarking, and succession planning. Ameriprise Financial s H&R Block reps report client agreements and compliance manuals are the most prevalent written business documents. Ameriprise Financial s H&R Block financial advisors has over half of its reps planning to retire within fifteen years. 14% of reps plan to retire in 5 years or less, 42% in 6-15 years, 33% in more than 15 years, and 11% do not plan to retire. 107

Ameriprise Financial s H&R Block reps primarily utilize Tom Gau as their financial advisor coach. Amongst the financial advisor coaches utilized, Ameriprise Financial s H&R Block reps are most satisfied with Tom Gau and Bill Bachrach. Ameriprise Financial s H&R Block technology offerings includes Moneystar Financial Planning Software. Ameriprise Financial s H&R Block financial advisors most utilized financial planning software application amongst reps is Money Tree. Ameriprise Financial s H&R Block reps are most satisfied with Money Tree financial planning software. Morningstar received the seconds highest satisfaction rating. Ameriprise Financial s H&R Block reps most often use SunGard&Frontier Allocation Master for their asset allocation software needs. Ameriprise Financial s H&R Block reps are most satisfied with Sun Guard&Frontier Allocation Master asset allocation software. Ameriprise Financial s H&R Block reps most often use Morningstar for their data & research services needs. Other research services utilized include Yahoo and MSN Money Central. Ameriprise Financial s H&R Block reps are most satisfied with Morningstar data & research services. Ameriprise Financial s H&R Block reps primarily utilize Quicken portfolio management software. Ameriprise Financial s H&R Block reps are not satisfied with Quicken portfolio management software, giving it Ameriprise Financial s H&R Block Financial Advisors Reps are Not Very Satisfied With their Contact Management Software, Giving Very Low Overall Scores an average score of only 3 out of 10. Ameriprise Financial s H&R Block reps most often use Maxx Broker and Access for their contact management software applications. H&R Block Reps By Satisfaction with Contact Management Software (1-10; 10 = High) Maxx Broker 3.0 Ameriprise Financial s H&R Block reps are not very satisfied with their contact management software, giving very low overall scores. Maxx Broker received a satisfaction score of 3.0 and Access 2.0. Ac ces s Source: 5/03 Tax Pro Best Practices Survey; Tiburon Research & Analysis 2.0 108

Ameriprise Financial s H&R Block reps visit a variety of web sites, including Morningstar and Yahoo Finance. Ameriprise Financial s H&R Block financial advisors gave the mutual fund company yweb sites the highest satisfaction scordes. Mutual fund company web sites received a score of 10.0 with the next highest score being Morningstar with 7.0. Ameriprise Financial s H&R Block top producers trips, annual conferences, & regional meetings include it s 2006 top producers trip in Las Vegas, NV. The top producers trip is held in Las Vegas, NV and includes the top 10% or 125 reps invited. Requirements include over $450,000 production. An extra day is added for the 30 financial advisors which requires $650,000 production. Average attendee earnings are $140,000- $300,000 with an average tenure of 11 years. Ameriprise Financial s H&R Block has four incentive levels, including bronze, silver, gold, and platinum. Bronze includes less than five years tenure with $75,000-$250,000 production and currently includes 14 reps. Silver includes $400,000- $600,000 production and has 78 reps. Gold includes $600,000- $1 million production and has 26 reps. Platinum is reserved for $1 million+ production and only has one rep Henry Slyker in Timonium, MD. Ameriprise Financial s H&R Block Financial Advisors Gold, Silver, & Bronze Advisors Represent About One-Third of the Firm s Total Production H&R Block Advisors Production by Incentive Level Other Advisors 66% Source: 5/11/06 H&R Block Email (Sigler); Tiburon Research & Analysis Ameriprise Financial s H&R Block s gold, silver, & bronze advisors represent about onethird of the firm s total production. Specifically, platinum & gold advisors account for 11% of production, silver 21%, and bronze 2%. Ameriprise Financial s H&R Block also has a presidential club. Pla tinum & Gold Advisors 11% Silve r Advisors 21% Bronze Advisors 2% Ameriprise Financial s H&R Block has online training & other self-study offerings. Ameriprise Financial s H&R Block financial advisors reps have attended a variety of conferences, including the company s regional meetings and annual conferences. Ameriprise Financial s H&R Block financial advisors reps gave H&R Block s annual conferences and AICPA conferences the highest satisfaction scores. Ameriprise Financial s H&R Block financial advisors s reps utilize a variety of CE providers, including HD Vest and NATP. Ameriprise Financial s H&R Block financial advisors reps gave HD Vest the highest satisfaction scores of CE providers. 109

Ameriprise Financial s H&R Block financial advisors reps read a wide variety of publications, with Kiplinger s and the Wall Street Journal being the most popular. Ameriprise Financial s H&R Block financial advisors reps gave Kiplinger s the highest satisfaction scores of publications read. Securities America Ameriprise Financial s third business is Securities America. The company was founded in 1979 and is based in Omaha, NE. The company is led by its CEO Steve McWhorter and was acquired by Ameriprise in 1998 for an undisclosed price. Ameriprise Financial s Securities America has 409 corporate office employees, up over 30% since 2001-2005. Ameriprise Financial s Securities America Has 409 Corporate Office Employees, Up Over 30% Since 2001-2005 Securities America Corporate Office Employees Ameriprise Financial s Securities America has 1,072 representative offices, consistent since 2001. 305 305 290 298 298 398 409 Ameriprise Financial s Securities America has 1,750 representatives, up 33% since the firm was acquired by American Express in 1998. 2001 2002 2003 2004 2005 2006 2007 Source: 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment A dvisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; 1/27/03 Investment News; Tiburon Research & Analysis Ameriprise Financial s Securities America has a representative to staff ratio just less than 5:1, a low number compared to most of the industry. Ameriprise Financial s Securities America has 1.7 representatives per office, up from 1.3 in 2001. Ameriprise Financial s Securities America s representatives are one-quarter OSJ mangers, consistent since 2001. Ameriprise Financial s Securities America Has 81% of its representatives with Series 7 licenses. Ameriprise Financial s Securities America has 434 reps with the CFP designation, down over 10% since 2006. Ameriprise Financial s Securities America has 28% of its reps with CFPs. Ameriprise Financial s Securities America s representative hold a charted financial planner designation. Ameriprise Financial s Securities America has 807 representatives producing more than $100,000, up 70% since 2002 but down 10% since its 2006 peak.. 110

Ameriprise Financial s Securities America has almost half of its reps producing more than $100,000 per year, up from 35% in 2001 and back to its 2004 peak. Ameriprise Financial s Securities America advisory practices compared with those of other broker/dealers reflected that Securities America representatives generate more revenues and higher payouts than their industry counterparts. Ameriprise Financial s Securities America Has Almost Half of its Reps Producing More than $100,000 Per Year, Up from 35% in 2001 and Back to its 2004 Peak P roducing Less than $100,000 Securities America Representatives By Production Level 65% 67% 66% Ameriprise Financial s Securities 48% Producing More 42% 35% 33% 34% than $100,000 America representatives generate an average $195,000 50% 46% payout per representative, which 2001 2002 2003 2004 2005 2006 2007 the firm intends to raise through Source: 8/6/08 Investment News; 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investm ent News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; Tiburon Research & Analysis the continued recruitment of high-end representatives. There are intentions to increase to better than $250,000 within three years time, specifically to beat Commonwealth. Top ten representatives have median production of $2.61 million. The leading representatives are: Scott Hanson & Pat McClain (Sacramento, CA), Ray Lucia (San Diego, CA), and Brett Ellison (Westlake, CA). Ameriprise Financial s Securities America leading representatives include Scott Hansen & Pat McClain, Ray Lucia, & Brett Ellison. Ameriprise Financial s Securities America average representative has 17 years industry experience. Firm assesses its long-term success on the solid industry grounding of sales force. Ameriprise Financial s Securities America touts itself as having a representative centric approach. Serves to remind employees at home office how important the representative are to the firm s success. Ameriprise Financial s Securities America s parent Ameriprise Financial shut off the pipeline of advisors switching from platforms I & II to the firm in 2003. Program allowing brokers to transfer to Securities America lasted three years. Originally promoted very heavily, but did not succeed and only 48 representatives made transfer throughout the life of the program. Resulted in the Loss of clients & related compensation on Ameriprise Financial side of the business. Shut down in reverse of competitors Raymond James & Wachovia Securities allowing representatives to make move to independent contractor models. Ameriprise Financial s Securities America claims to serve the needs of financial planners, securities brokers, insurance producers, investment advisors, bank representatives, and branch managers. Ameriprise Financial s Securities America s big recruitment numbers are coming at the expense of insurance-owned broker/dealers. Targets representatives with three or more 52% 58% 50% 54% 111

years of related industry experience, $250,000 in production, and a desire to grow their businesses. Ameriprise Financial s Securities America recently scored a recruiting coup by gaining 97 representatives of the now defunct cap pro brokerage services. The firm is based in Minneapolis, MN and has eleven members. Ameriprise closed broker/dealer in 2005, and eight of eleven firms moved to Securities America (others became own broker/dealers). Eleven firms had 97 representatives, $1.2 billion assets under administration, and $17 million in gross dealer concession. Ameriprise Financial s Securities America has been running an advertising campaign profiling representatives Scott Hanson and Pat McClain. Ad claims that specialization is the key and offers client acquisition program through 100 affiliated advisors. Also offers free audio discussion and directs prospective representatives to web site. Ameriprise Financial s Securities America believes that its recruiting success has come from its business building tools and higher payouts. Some representatives comment that Chris Flint s persistence, coupled with the business building tools the firm offers, that convinced them to make the switch to Securities America. Ameriprise Financial s Securities America uses direct mail for recruiting and promotes nine benefits that set it apart. Advertised benefits include: technology, full-service transition support, sophisticated practice management, business development coaching, marketing, flexible fee-based programs, deferred compensation program, continuity of practice and succession planning, and competitive payout. Ameriprise Financial s Securities America recently introduced a short-term recruiting campaign offering to waive representatives monthly service fees and pay some licensing costs. Ameriprise Financial s Securities America promotes to potential reps the services of inhouse client acquisition specialists, and a host of other resources. Ameriprise Financial s Securities America provides advisors with tools for recruiting additional qualified representatives. Additional tools include: postcards, ads, customized literature, and book for recruits. Ameriprise Financial s Securities America began using forgivable loans more aggressively to attract top representatives from other firms. Forgivable transition loans range between 3% and 10% of trailing twelve month production. Ameriprise Financial s Securities America has established its branch expansion network for recruiting representatives for branch expansion. Provides full-time dedicated consultants to help branch managers recruit new representatives to expand offices. Consultants provide a number of services, including: generate recruiting leads for branch manager, provide assistance with brochures and advertising, and run local meetings for recruits. 8 branch managers have participated in program with numbers reportedly increasing. 6 senior branch office consultants full-time in field, they are based in California, Pennsylvania, Saint Louis, Atlanta, Cincinnati, and South Carolina. Reports of hiring four junior level recruiters to support the senior members. Participating representatives pay no fee, but must sign contract to follow through with program to 112

fruition. Incentivized as once they reach $1.5 million in production, they are sent on a trip ($50,000 average production required). No metrics on success of program yet, but anecdotally participants have been very happy and six of eight participants reached trip incentive. Tiburon received a recruiting letter interestingly from a man with the position of Branch Office Consultant Ameriprise Financial s Securities America s representative referral program offers bonuses up to $10,000 depending on the new representatives actual production. Ameriprise Financial s Securities America has reportedly recruited less than 10% of its representative force through the referral fee program, indicating a lack of success. Ameriprise Financial s Securities America has 330,000 client accounts. Ameriprise Financial s Securities America has over a quarter of its client accounts that have over $100,000. Ameriprise Financial s Securities America has 99 client accounts per representative, up more than 25% since 2001. Ameriprise Financial s Securities America has more than $30 billion assets under administration, up nearly 200% since 2001. Ameriprise Financial s Securities America has $16.8 million assets under administration per representative, up 85% since 2004 & 2005. Ameriprise Financial s Securities America generates $506 million in revenues, up 200% since 2001. Ameriprise Financial s Securities America generates $289,000 in revenues per representative, up almost 90% since 2001-2003. Ameriprise Financial s Securities America generates the majority of its revenues from commissions, although feebased revenues have been steadily increasing since 2001. Ameriprise Financial s Securities America Generates $506 Million in Revenues, Up 200% Since 2001 $165 Securities America Revenues ($ Millions) $204 $220 $240 $305 $351 $438 $506 1999 2001 2002 2003 2004 2005 2006 2007 Source: 9/6/08 Investment News; 4/28/08 Investment News; 2/8/06 Securities Am erica Conversation (Hulett); 10/7/05 Securities America Conversation (Hulett); 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 7/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Planning; 6/04 FinancialAdvisor; 4/5/04 Investment News; Tiburon Research & Analysis Ameriprise Financial s Securities America average rep payout is $252,000, up almost 30% since 2006. Ameriprise Financial s Securities America generates a 1.48% return on assets, down from 2.67% since its 2002 peak. Ameriprise Financial s Securities America earns about $20 million. 113

Ameriprise Financial s Securities America s representatives invest nearly three-quarters of their client assets in mutual funds & annuities. Specifically, 40% in mutual funds and 30% in annuities. Ameriprise Financial s Securities America generates more than half of its revenues from mutual funds and annuities, although fee-accounts revenues have been steadily increasing. Ameriprise Financial s Securities America generates more than half of its revenues from mutual funds and annuities, although fee-accounts have been gaining an increasing share of its revenues. Ameriprise Financial s Securities America offers a selection of individual securities including stocks and bonds. Ameriprise Financial s Securities America allows its representatives to clear through National Financial, Pershing, and Charles Schwab. Ameriprise Financial s Securities America reports that 99% of its business clears through National Financial. Ameriprise Financial s Securities America research offers a complete suite of research products for representatives use. Suite includes: Investment Information Services, Search 401K, Search Performance, Search 529, Argus Research Corporation, Standard & Poor s Advisors Insight, NFS Research Suite, and Long-Term Care Support. Ameriprise Financial s Securities America offers 9,000 mutual funds. Ameriprise Financial s Securities America s top fund partners include fidelity advisor funds, WM group of funds and, of course, American Express funds. Ameriprise Financial s Securities America has mutual fund assets. Ameriprise Financial s Securities America generates $119 million in mutual fund revenues, up more than 30% since 2001. Ameriprise Financial s Securities America has relationships with variable & fixed annuity providers. Ameriprise Financial s Securities America offers 100 variable & fixed annuities. Ameriprise Financial s Securities America s has thirteen top variable annuity partners. Partners include: Allstate Life, American Enterprise Life, Hartford Life, ING, Jackson, National Life, Manulife, Met Life Investors, Nationwide Life, Pacific Life, Prudential (American Skandia), RiverSource (Ameriprise), Transamerica and US Allianz. Ameriprise Financial s Securities America has variable & fixed annuity assets. Ameriprise Financial has boosted the share of its annuities in the Securities America system from 0.5% in 2004 to 3.5% in 2005. 114

Ameriprise Financial s Securities America generates $71 million variable & fixed annuity revenues, up over 60% since 2001. Ameriprise Financial s Securities America has a fee-accounts business. Ameriprise Financial s Securities America has 1,387 reps who utilize its fee-account programs, up 15% since 2005 but down slightly since its 2006 peak. Ameriprise Financial s Securities America has 80% of its representatives utilizing its feeaccount program, up from 60% since 2001. Ameriprise Financial s Securities America Has 80% of its Representatives Utilizing its Fee-Account Program, Up from 60% Since 2001 Securities America Representatives By Utilization of Fee-Accounts Ameriprise Financial s Securities America has fee-accounts. Do Not Utilize Fee-Accounts 40% 40% 34% 30% 25% 20% 21% Ameriprise Financial s Securities America has $13.5 billion in feeaccounts assets, up 400% since 2001. 75% 80% 79% Utilize Fee-Accounts 66% 70% 60% 60% 2001 2002 2003 2004 2005 2006 2007 Ameriprise Financial s Securities America generates $144.7 million in fee-accounts revenues, up 450% since 2001. Source: 8/6/08 Investment News; 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investm ent News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; Tiburon Research & Analysis Ameriprise Financial s Securities America representatives wishing to do fee-accounts business may either become RIAs of the Securities America advisor registered investment advisor or have their own. Ameriprise Financial s Securities America has a fee-accounts program that includes two broker wrap programs and a still popular unbundled separately managed account. Specifically, managed accounts program includes: Life Guide Program (broker wrap program), Financial Advisors Programs (broker wrap program), Managed Opportunities (separately managed account), and Independent Managed Asset Program (unbundled separately managed account). About one-sixth of Ameriprise Financial s Securities America fee-accounts assets are in its managed opportunities program. Ameriprise Financial s Securities America introduced its separately managed account program called managed opportunities in 2002. Traditional separately managed accounts program (but also including mutual fund TAMPs) features include: $25,000 - $50,000 account minimums for mutual fund TAMPs; $100,000 - $200,000 account minimums for separate account portfolios, depending on money manager; $100,000, $250,000, and $350,000 account minimums for MAC portfolios. Discretion in hands of Securities America for mutual fund trades, in those of Oberon for separately managed account trades (Rebalancing done by sub-advisor). Three Multi asset class (MAC) portfolios available, each with five asset allocation models. Fees range from 1.80% to 0.45%. 12b-1 fees are retained by firm, performance reports NOT sent quarterly, ondemand online 24/7, confirmation suppression available upon request, check writing not 115

allowed, Margin not allowed, clients terminating account wishing for cash proceeds charged $35 per sell transaction, maxing out at $200, and clearing through National Financial Services. $1 billion assets under management and growing rapidly. The program was built by Oberon (now part of Envestnet). Ameriprise Financial s Securities America s managed opportunities program features include education & sales to various operational support features. Ameriprise Financial s Securities America s managed opportunities program offers a variety of separate account managers. Account managers include: Chelsea Management, Holt-Smith & Yates, John Hancock Advisors, PMG-American Express, Santa Barbara Asset Management, and Wells Capital Management. Ameriprise Financial s Securities America s managed opportunities program utilizes a variety of money managers offering mutual fund wrap portfolios. Money managers include: Asset Mark, Clarke Lanzen Skalla, Meeder Financial, ICON Advisors, Morningstar Investment Services, Managers Funds, Neuberger Berman, RTE Asset Management. Ameriprise Financial s Securities America s managed opportunities program s fees range from 1.20% to 0.70% for separate account portfolios and MAC portfolios. Ameriprise Financial s Securities America s managed opportunities program s fees range from 0.60% to 0.45% for mutual fund portfolios. Ameriprise Financial s Securities America offers an unbundled separately managed accounts program called independent managed assets program (IMAP). Traditional unbundled SMA program, designed for asset managers that are not on the Managed Opportunities platform and still very popular. Ameriprise Financial s Securities America used to offer a mutual fund wrap program called managed values portfolio (MVP) program. This is a traditional mutual fund wrap program with $50,000 minimum and $100 annual small account fee on accounts below $100,000. Program has four investment portfolios, automatic quarterly client billing (monthly available), No ticket charges, No confirm charges ($3.75 confirm charge waived), quarterly, online performance reports, checkwriting up to $500 available, and IRA fee waived. Program uses Morningstar, Principia Pro, and Wilson Associates Power Optimizer as research tools for mutual fund selection. Ameriprise Financial s Securities America s managed values portfolio program client fees range from 1.25% to 0.30%. Ameriprise Financial s Securities America offers a broker wrap account program called financial advisors program (FAP). This is a traditional broker wrap program $25,000 minimum with access to 1,800 load-waived mutual funds & 1,200 no-load funds, stocks, bonds, covered call options, UITs, and eligible securities. Features include: custodied at National Financial Services; mutual funds that paid a commission must be held one year to be transferred into an account; automatic monthly or quarterly client billing (fees to representatives monthly or quarterly depending on accounts preferences); fee notifications in statement with cost basis information; ability to link to variable annuity policies for management fee deduction purposes; no confirm charges ($3.75 confirm 116

charge waived); Quarterly, online performance reports; and check writing up to $500 available for no charge. Margin available not for securities purchases, but for overdraft protection upon signing form. Variety of client fee schedules, with maximum fee of 3% for stocks, 2.25% for mutual funds and administrative fees starting at 20 bps. Ameriprise Financial s Securities America s financial advisors program client fees range, starting from 3.00% to 2.25% depending on investment type. Variety of schedules, both flat & tiered depending on advisor preference of what to sell; may be charged monthly or quarterly, again determined by advisor. Maximum fee of 3.00% for stocks and 2.25% for mutual funds and if variable annuities are linked. Ameriprise Financial s Securities America charges admin fees on its financial advisors program in two ways, with the lesser of the two being the charged fee on a case by case basis. Ameriprise Financial s Securities America charges charge administrative fees between 20 and 11 basis points based on a rep s assets under management in the program. Ameriprise Financial s Securities America charges charge administrative fees between 20 and 7 basis points based on client account size. Ameriprise Financial s Securities America s financial advisors program has ticket charges for stocks, bonds, options, and mutual funds. Ameriprise Financial s Securities America representatives looking to sell the financial advisors program product are provided with six core marketing materials, including brochures and a radio spot script as desired. Ameriprise Financial s Securities America also offers similar broker wrap program called life guide program. This is a traditional broker wrap program with $50,000 minimum and Access to 1,500 load-waived mutual funds & 1,300 no-load funds, stocks, bonds, covered call options, UITs, eligible securities, and variable annuities. Other features include: mutual funds that paid a commission must be held one year to be transferred into an account; automatic monthly or quarterly client billing (fees to reps monthly or quarterly depending on accounts preferences); fee notifications in statement with cost basis information; no confirm charges ($3.75 confirm charge waived); quarterly, online performance reports; check writing up to $500 available for no additional charge; margin available not for securities purchases, but for overdraft protection upon signing form; client fees range from 2.25% to 1.10%; Administrative charges are 10-15% of fee depending on total assets under management in the program. Ameriprise Financial s Securities America s life guide program tiered client fees range from 2.25% to 1.10%. Ameriprise Financial s Securities America has an interesting way of taking administrative fees from life guide accounts, skimming between 10% and 15% of the client fee depending on the rep s program assets under management. Ameriprise Financial s Securities America takes better than half of 12b-1 fees spit off of life guide program mutual funds; it further punishes the representatives for holding 12b-1 paying mutual funds in ERISA accounts. 117

Ameriprise Financial s Securities America s life guide program has ticket charges for stocks, bonds, options, and mutual funds. Ameriprise Financial s Securities America representatives looking to sell the pants off of the life guide product are provided with six core marketing materials to aid them in their quest. Marketing materials include: brochures, postcards, client letters, radio scripts, ad slickers and Power Point Presentations. Ameriprise Financial s Securities America provides representatives looking to invest client assets in broker wraps properly a services it calls portfolio design & analysis (PDA) for a small fee. Fee include $50 for advisors with advisory accounts, $150 for those without. Investment team reviews client holdings, and design a customized proposal along with rebalancing recommendation. Ameriprise Financial s Securities America also has relationships with seven turnkey asset management programs, including Assante Asset Management, ICON advisors, and others. One-quarter of Ameriprise Financial s Securities America representatives provide services through their own registered investment advisor, which has been consistent since 2001. Ameriprise Financial s Securities America helps representatives with their own registered investment advisor to draft their ADVs and provide a registered investment advisor compliance web site. Ameriprise Financial s Securities America unit has greatly increased its offering of REITs. Offerings include: Hedge Funds & Managed Futures, Venture Capital & Private Equity, Real Estate, and Other Alternative Investments. Ameriprise Financial s Securities America unit expects to build its wealth management business. Ameriprise Financial partners with its subsidiary Securities America, enabling representatives to tap into Ameriprise Financial s resources and offer its clients three financial planning services. The three services include: Stock Option Exercise Analysis, Business Valuation Analysis, and Expert Planning Advice. Ameriprise Financial s Securities America representatives may charge a financial planning fee to clients in one of three ways. Three options include: Hourly Rate or Flat Fee, Ongoing Rate of a Percentage of Assets, and Retainer Fee. Ameriprise Financial s Securities America s preferred planning partners programs allows representatives to partner with jack Miciak and Rochana Norby. Ameriprise Financial s Securities America insurance brokerage division is the firm s insurance business. Company offers full line of products and claims top commissions paid directly by insurance companies. 118

Ameriprise Financial s Securities America insurance brokerage division brokers a full line of life, health, disability, and long-term care insurance, as well as fixed annuities and ancillary products. Ameriprise Financial s Securities America representatives are able to execute insurance transactions multiple ways, including local Securities America relationship, National Benefits Corporation and Invest Mark. Ameriprise Financial s Securities America offers 50 variable life products, and has several top variable life partners. Partners include: Equitable Distributors, John Hancock Insurance, Lincoln Benefit Life, Nationwide Life Insurance, Pacific Life Insurance, Principal Life, Prudential, Reliastar, Security Life of Denver, and Southland Life. Ameriprise Financial s Securities America partners with daily access corporation to provide retirement opportunities, a 401K platform. Web-based retirement platform installed on a commission or fee-based structure, it allows representatives access to full service and same-day trading. Ameriprise Financial s Securities America partners with Everbank to provide clients with a variety of banking services. Representatives earn 40 basis points on loans that they help write. Ameriprise Financial s Securities America offering with Everbank includes mortgages, CDs, credit cards, and checking accounts. Almost 200 Ameriprise Financial s Securities America representatives have utilized Everbank s mortgage services. Over 200 Ameriprise Financial s Securities America representatives have utilized Everbank s banking services. Specifically, 250 reps have utilized Everbank s banking services. Nearly half of Ameriprise Financial s Securities America representatives consider the services they offer to be wealth management services. Ameriprise Financial s Securities America affiliate renaissance trust, founded in 1987, allows representatives access to a full compliment of trust services. Renaissance administers assets of $2.5 billion (not only Securities America). Ameriprise Financial s Securities America representatives have access to utilize a brokerage account, called SAI personal brokerage account, at substantially reduced costs. Account features include: no minimum balance requirements, reduced ticket charge schedule, no monthly fees, annual IRA fees, nor inactive account fees, and access to 900 no transaction fee (NTF) funds. Ameriprise Financial s Securities America is still perceived to pay out 100% by some industry insiders, but it no longer does. Firm paid out 100% on commission and feeaccounts business through 2000. Payout structure initiated by former owner who sold the firm to American Express. Strategy to grow scale & market share before the acquisition, but was not considered to be sustainable. Related story to Amazon.com s 119

strategy of pricing books below cost to increase scale, and then raise prices to build profits. Ameriprise Financial s Securities America has 30 representatives that are grandfathered into the original 100% Securities America payout plan. Ameriprise Financial s Securities America s grid, now referred to as the 92% grid, increases to 95% at $500,000. Ameriprise Financial s Securities America charges fees of $279 per month which includes E&O insurance. Ameriprise Financial s Securities America has multiple payout & fee options depending upon production and type of office, generally ranging from 90% to 92%. Ameriprise Financial s Securities America pays out a base of 90% on financial planning gross, with three allowances being afforded representatives who meet certain qualifications to max out the payout at 95%, slightly higher than most competitors. Ameriprise Financial s Securities america pays out between 92% and 95% on mutual funds, insurance, variable annuities, limited partnerships, & securities depending on rep production level. Ameriprise Fi nancial s Securi ties A merica Pays Out Be tween 92 % and 95% on Mutual Funds, Insurance, Variable Annuities, Limited Partnerships, & Securities Depending on Rep Production Level Securities America Mutual Fund, Insurance, Variable Annuity, Limited Partnership, & Securities Payouts 92% 92% 92% 95% 95% Ameriprise Financial s Securities America has also established a fee credit program, allowing representatives to receive credits toward monthly service fees. This is based on premium paid for traditional insurance sales through Securities America. 0-$249,999 $250,000- $499,999 Source: 4/28/08 Investment News; Tiburon Research & Analysis $500,000- $749,999 $750,000- $999,999 $1,000,000+ 547 Ameriprise Financial s Securities America has established a fee schedule for licensed office support staff. Fees range from $75 to $100. Start up fees range from $300 for individual rep sign up for a single-rep office to $150 for addition rep sign up for multi-rep office. Ameriprise Financial s Securities America charges a swath of representative start up fees upon joining the firm. Ameriprise Financial s Securities America assesses a handful of fees for E&O insurance, rescheduling a branch audit, etcetera. Ameriprise Financial s Securities America charges representatives a monthly fee for compliance managing client performance reports, with higher fees charged to representatives with more frequent performance correspondence. 120

Ameriprise Financial s Securities America assesses a handful of commission associated fee on representatives. Ameriprise Financial s Securities America charges representative fees for company materials as well. Fees range from $5 to $75. Ameriprise Financial s Securities America also provides a full schedule of ticket charge fees. Ameriprise Financial s Securities America charges cheaper ticket charges on preferred mutual fund purchases, as it says in an effort to guide client cash to quality products. Ameriprise Financial s Securities America assesses a handful of client charges & fees on its accounts. Fees range form $4.25 to $250. Ameriprise Financial s Securities America assesses a handful of check writing fees. Ameriprise Financial s Securities America has set rates for margin transactions it charges clients. Ameriprise Financial s Securities America insurance producer representatives can earn credits towards monthly service fees and costs of E&O insurance. Ameriprise Financial s Securities America provides the representative relations center to representatives for front line responses for quickly handled questions. Online tracking via e-office advantage. Ameriprise Financial s Securities America provides representatives that use a separate registered investment advisor with independent registered investment advisor support. Support includes drafting and maintaining all forms and agreements and sending notices for regulatory changes and fee reminders. Ameriprise Financial s Securities America has also established the gold star program, providing a higher level of customer service to representatives with high production. Program features include: single support point person; review action, research possible barriers, and educate representatives on processes to help avoid service delays; twoway feedback on operations issues; and initiate appropriate quality improvement recommendations. Ameriprise Financial s Securities America had a recognition program called tattletales that allows representatives and employees to recognize each other for going above & beyond. Ameriprise Financial s Securities America operations department offers trade link, a service that allows service staff to execute client trades when a representative is out of the office. Representative can divert client calls to Trade Link customer service desk, loaded with licensed representative. Representative shares in commissions 50 / 50 if properly licensed for the trade and no fee on commission accounts aside from transaction charge, $10 per trade fee on fee-accounts assessed to representative. 121

Ameriprise Financial s Securities America believes that industry technology is becoming a commodity, making it a difficult area to differentiate firms. Ameriprise Financial s Securities America s technology platform is called e*office advantage, which encompasses twelve main technology tools. Tools include: Account Manager, SA Broker, Planning Tools, Management Reports, Advisor Channel, Net Exchange Pro, Office Administration Tool, Account Maintenance Tools, Pareto Systems, Customized Representative Web Site, E*Star, and Client Accessibility. Ameriprise Financial s Securities America recently rolled out a paperless option module as part of its e*office advantage platform; it will soon do something similar for its back office. Ameriprise Financial s Securities America offers two Morningstar modules, including advisor workstation at a steep discount to retail and principia pro. Ameriprise Financial s Securities America believes that about one-quarter of its representatives use act! And goldmine for contact management. Ameriprise Financial s Securities America believes that only about 10% of its representatives utilize Morningstar. Ameriprise Financial s Securities America is in the process of reviewing other higher end planning technology providers for its representatives aiming for more sophisticated clients, including emoney Advisor and Naviplan. Ameriprise Financial s Securities America considered using Albridge Solutions but passed. Further, Ameriprise Financial s Securities America is working with DST to develop a complex performance reporting engine that will impressively household accounts across platforms. Set to roll out in early 2006. Ameriprise Financial s Securities America provides new and potential representatives a CD-ROM outlining and demonstrating eoffice advantage s features. Ameriprise Financial s Securities America is running an aggressive ad campaign, focusing on its business building assistance. Tag line: build your business your way. Features Securities America representatives. Ameriprise Financial s Securities America provides a huge assortment of sales & marketing and business building support modules, some offered for free and other for small fees. Ameriprise Financial s Securities America s jumpstart marketing kit provides a seamless plan & process for advisors wishing to meet their marketing goals. Pieces of the kit work together to help advisors build their businesses. Chief Marketing Officer Janine Wertheim developed the kit. Ameriprise Financial s Securities America is now offering its advisors what it calls the jumpstart marketing kit, which focuses on four components to help them build stronger 122

businesses faster. Kit features include: Building a Marketing Foundation, Creating a Brand Identity, Marketing Your Services, and Taking Care of Clients. Ameriprise Financial s Securities America offers independent representatives an array of marketing materials for building a client base. Materials include: CD business cards, customized brochures, monthly client letters, newspaper ads, brochures & flyers, amazing mail postcards, greeting cards, and build your brand packages. Ameriprise Financial s Securities America promotes a target marketing program it offers to acquire highly profitable clients. Promoted as tested niche marketing programs. Ameriprise Financial s Securities America says that seven of its top ten producers have taken advantage of its target marketing programs. Ameriprise Financial s Securities America is in the process of developing a marketing tool kit for branch managers to recruit additional representatives into their offices. Site up on representative web site, but yet to be fully developed. Now offers sample recruiting ads to run in a newspaper or magazine & sample recruiting letters, but more will be added soon. Ameriprise Financial s Securities America also provides marketing materials for representatives operating from a bank environment. Marketing materials include: desk signs, posters, statement stuffers, and free consultation cards. Ameriprise Financial s Securities America teams with two outside sources, Peter Montoya and Palladium Media Consulting, to provide representatives with additional marketing needs. Ameriprise Financial s Securities America sells pre-approved stationery & business literature materials to interested representatives. Ameriprise Financial s Securities America s core value proposition is its client base expansion program, whereby successful representatives in its force have unique marketing ideas systemized, and are paid to spread the word and generate leads for other representatives nationwide. Representatives on the supply end receive fees for training, marketing materials, and revenue sharing for clients generated from their systems. Revenue sharing can be as much as 20 basis points with some representatives choosing more revenue sharing and some choosing more fees for training. Ameriprise Financial s Securities America provides representatives with access to ten programs for client base expansion. Programs include: The Hanson McClain Retirement Network, Ray Lucia Financial Network, Fox College Funding Network, 401K Exchange, FLC Financial Network, Investcorp Retirement Specialists, WiserAdvisor.Com, Preferred Planning Partners Program, Alliance Partners Programs, and Professional Alliances. Ameriprise Financial s Securities America is developing a new client base expansion module called heartland advisors to train representatives in worksite education. Teamed up with certified financial planner board to generate plans. Training & education provided to seminars through 20 local college relationships. Chrysler Auto Workers union involved. 123

Under its relationship with Ameriprise Financial s Securities America, wiser advisor offers pre-screened & qualified leads to participating representatives based on the desired type of relationship the prospective client is seeking. Additionally, Ameriprise Financial s Securities America offers representatives a kit it calls seminars A to Z for $55, which provides them six components on planning & executing a successful seminar. Components include: Seminar Planning, Event Planning, Resources, Checklists, Sample Contracts, and Wholesaler Reimbursement Form. Further, Ameriprise Financial s Securities America refers representatives to emerald publications, Standard & Poor s, and Ibbotson for seminar prep materials. Ameriprise Financial s Securities America s alliance partners programs allow representatives to enter new markets by forming alliances with a variety of firms. Alliances include: Millennium Settlements, Vercor, Grangaard Strategy Retirement Program, ActiFI, Experienced Advisor, and PT Marketing Group. Ameriprise Financial s Securities America provides new and potential representatives a CD-ROM & worksheet outlining and demonstrating a supposedly proven method to streamline one s business in twenty days. Called 20 point day CD-ROM & worksheet. Ameriprise Financial has a referral program in place called professional alliance program. Program provides revenue sharing arrangements with certified public accountants in 37 states; established representatives with pre-approved introductory letters, brochures, and presentation materials they can use with recruiting certified public accountants; and Conducts background checks on the certified public accountant partners. Ameriprise Financial s Securities America representatives work closely with estate & trust advisors to help recruit certified public accountant firms to be partners. Estate & Trust Advisors provides the practice management tools, marketing experience and expertise in the accounting profession to ensure that representatives create formal relationships with the professional in the community. Estate & Trust Advisors is a turnkey, sophisticated program for partnering with certified public accountant and law firms. Provides certified public accountants recruiting seminars and materials for certified public accountants partner retreats that the representative sponsors. Also has a comprehensive practice development program to attract affluent clients within the certified public accountants firm s base of business owners and personal clients. Ameriprise Financial s Securities America promotes that certified public accountant firms can generate an additional $95,000-$225,000 by participating in its referral program. Ameriprise Financial s Securities America executives outline the importance of customer surveys or focus groups in maintaining client service for its representatives. Ameriprise Financial s Securities America partners with quantum market research to provide client surveys, a means of business building support. Provides representatives with comprehensive survey results to enhance referrals and retention. 124

Ameriprise Financial s Securities America received high marks in a recent qfinance financial services client loyalty survey for its practice management offerings. LPL and Commonwealth Financial also received high marks. Securities America views itself as having the best practice management team behind that of Commonwealth. Ameriprise Financial s Securities America offers a wide array of practice management support, including consulting, guides, tools, programs, and HR advantage. Ameriprise Financial s Securities America has a dedicated practice management team in-house, which views itself as a mini consulting firm inside a firm. There a total of 10 consultants: 5 full-time and 5 other contributors. Ameriprise Financial s Securities America offers a unique & comprehensive practice management consulting project to representatives willing to shell out $3,500 to revolutionize their businesses. Program listed to interested representatives producing more than $200,000, with a required support staff. Dedicated consultant spends full year working with the practice, systemizing a business & marketing plan, teaching how to utilize technology fully, and solve personnel issues. Believes comprehensiveness of program unique to other firms consulting offerings. Observed average revenue increases between 35% and 45% among participants. Ameriprise Financial s Securities America will soon roll out a comprehensive wealth management consulting offering for representatives interested in taking their businesses to the next level. Will provide coaching & consulting to firms wishing to successfully target the high net worth. Will leverage emoney Advisor software, if the firm chooses to form a relationship with them as is being debated. Approach will be directionally similar to Commonwealth s molecular map model, but still unique in and of itself. Ameriprise Financial s Securities America offers a handful of practice management guides for between $35 and $55, ranging in topics from office management to writing a business plan. Ameriprise representatives have access to Ameriprise Financial s continuity of practice program, comprised of five components, including Moss Adams workbook, designed for internal transfers, web site, Scorcard, & financing. Ameriprise Financial s Securities America s transition team supports new representatives throughout their transition period, including a personal transition consultant for 90 days. Other support includes: training, paperwork review, follow-up of account transfers, and orientation & technology support. Ameriprise Financial s Securities America practice management team coaches its representatives and emphasizes six key practies, including referrals, web site, brochures, & advertising. Ameriprise Financial s Securities America s transition team supports new representatives throughout their transition period, including a personal tranisition consultant for 90 days. 125

Ameriprise Financial s Securities America offers transitioning representatives a turnkey solution called transition suite. Suite includes office location, marketing promotion, and human resources support. Ameriprise Financial s Securities America offers representatives discounted pricing on office space through HQ Global. Pricing options include: full-time office program and part-time office program. Ameriprise Financial s America also offers new representatives human resources support through access to three programs from HR Advantage. The three programs are HR Advantage Gold, HR Advantage Silver, and HR Advantage Bronze. Ameriprise Financial s Securities America has designed what it calls the roadmap program, a training program to help representatives make a transition from commissionbased to fee-based practices. Program features include workbook and seminars. Ameriprise Financial s Securities America former top producer Lucinda Fairfield helped spearhead the roadmap effort and gives two-day seminars, after converting her own practice in 63 days. Includes assignments to attendees beforehand, workshop participation, and three follow-up calls after the workshop. Ameriprise Financial s Securities America also offers a workbook corresponding to the course called roadmap: making the transition to a fee-based business. Securities America roadmap workbook chapters include: what is fee-based business? Why consider converting your book? Who is the ideal client? position yourself before you begin your transition, making the transition step-by-step, paving the road to conversion, the client meeting, finding new clients, the six-step consulting process, laying a solid foundation, how Securities America Advisors can help, and suggested reading list. Securities America developed a course called roadmap program aimed at helping representatives take their practices through the transition to a fee-based business, including review of fee-based services and assistance in creating timelines. Ameriprise Financial s Securities America has an agreement with CEG worldwide for training in wealth management. Ameriprise Financial s Securities America offers representatives access to FP Tranisitions, an independent online site dedicated to the buying, selling, or merging of financial practices. Discounts for Securities America representatives are charged $500 credit towards closing services, back office support, and block transfer assistance. Promotion code for free membership: SAI Gold and it offers free continuity workbook including addresses succession planning issues from both legal and task planning perspectives. Ameriprise Financial s Securities America representative can receive a discount equal to 20% - 40% of FP transitions closing fees, equivalent to 3% - 4% off the purchase price. Ameriprise Financial s Securities America hold a national conference, a professional development conference and a managed money conference annually. 126

Ameriprise Financial s Securities America has four councils for representatives, branch managers, and office assistants to participate in. The four councils include: Securities America Advisory Council, Branch Manager Advisory Council, Technology Council, and Assistant Advisory Board. Ameriprise Financial s Securities America provides representatives twice weekly web casts and access to a web cast library of fifty pre-recorded sessions on technology best practices. Available 24 hours a day. Ameriprise Financial s Securities America provides representatives with perspectives, a monthly educational audio series. Focuses on business development ideas and features interviews with top producers and industry experts. Representatives using firm feeaccounts programs receive this monthly service at no charge on audio tape or CD media. Ameriprise Financial s Securities America sends potential representatives a quarterly newsletter called Make Your Move. Newsletter features include: events at a glance, business building tools, technology updates, practice management services and product innovations. Ameriprise Financial s Securities America offers representatives EduCenter, an online training & education program, also known as ecertification. Provides multiple levels of curriculum. Programs designed for assistants, representatives, and managers. Ameriprise Financial s Securities America s ecertification program has courses for representatives, branch managers, and assistants. Ameriprise Financial s Securities America sends out a bi-monthly newsletter it calls the star as part of its training program for representative. Packed with articles on new firm offerings, hints on growing one s practice, sales tips, and other various topics. Ameriprise Financial s Securities America s star newsletter helps representatives out with four things, including practice management & marketing. Ameriprise Financial s Securities America awards its top fifteen representatives each year with a circle of stars award. Ten awards to top financial consultants, five to top financial advisors. The #3 and #4 financial consultants on 2004 list are Pat McClain & Scott Hanson of Hanson McClain in Sacramento, CA. They are #1 and #2 on mid-2005 list as well. Awards given out at National Conference. Ameriprise Financial s Securities America specifically offers assistants a variety of resources for development, including assistant certification, assistant university, and assistant symposium. Ameriprise Financial s Securities America s assistant university gets solid attendance, with better than a third of representative offices sending an associate. Specifically, 35% rep attendance. Ameriprise Financial s Securities America holds annual outings on president s day devoted to educational sessions and training programs. 127

Ameriprise Financial s Securities America used to subclear for other broker / dealers looking for access to its fee-accounts programs, technology, practice management programs & other services for a monthly fee; due to heightened regulatory concerns it ended the program. Charged $600 per month and offered 100% payout (no revenue sharing). Firm had to be registered NASD broker/dealer in good standing and nonbrokerage business is conducted at the sub-clearing broker/dealer level. The proof of E&O coverage was required and brokerage ticket charges & other fees applied. Discontinued due to heightened regulatory issues & liability concerns. Ameriprise Financial s Securities America s second business is Brecek & Young Advisors. Ameriprise Financial s Securities America s Brecek & Young Advisors is based in Folsom, California. The company has 66 corporate employees, 69 rep offices, 366 reps (84 rep produce more than $100,000), 87,000 accounts, $5.8 billion assets under administration, & generates $42.7 million revenues. It is led by its CEO Chris Ranney and was acquired by Securities America in 2008. Ameriprise Financial s Securities America s Brecek & Young Advisors has 61 corporate office employees, up 20% since 2001 but down from its 2004 peak. Ameriprise Financial s Securities America s Brecek & Young Advisors has nearly 70 rep offices, which has remained constant since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has 366 reps, fairly consistent since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors Has 61 Corporate Office Employees, Up 20% Since 2001 But Down from its 2004 Peak 51 51 Brecek & Young Advisors Corporate Office Employees 64 71 Source: 4/28/08 Investment News; 6/05 Financial A dvisor; 6/05 F inancial Planning; 5/30/05 Investm ent News; 4/18/05 Investment News; 1/17/05 Investm ent News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial A dvisor; 4/5/04 Investm ent News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; Research & Analysis 66 62 61 2001 2002 2003 2004 2005 2006 2007 638 Ameriprise Financial s Securities America s Brecek & Young Advisors has 5.3 reps per office, which has been consistent since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has 10% of its reps as OSJ managers, which has been consistent since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has half its reps with Series 7 licenses, which has been consistent since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has 37 reps with the CFP designation, up 100% since 2006. Ameriprise Financial s Securities America s Brecek & Young Advisors has 133 reps producing more than $100,000 per year, up over 50% since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has one-quarter of its reps producing more than $100,000 per year, which has been consistent since 2001. 128

Ameriprise Financial s Securities America s Brecek & Young Advisors has 87,000 client accounts, which has steadily increased since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has 237 client accounts per rep, up significantly since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has $5.0 billion assets under administration, up 25% since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has more than $15 million assets under administration per rep, which has nearly doubled since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors generates $42.7 million in revenues, up 50% since 2005. Ameriprise Financial s Securities America s Brecek & Young Advisors Generates $42.7 Million in Revenues, Up 50% Since 2005 Brecek & Young Advisors Revenues ($ Millions) $42.7 Ameriprise Financial s Securities America s Brecek & Young Advisors generates $77,000 in revenues per rep, up significantly since 2001. $19.0 $24.0 $25.0 $26.0 $28.0 $35.8 Ameriprise Financial s Securities America s Brecek & Young Advisors generates two-thirds of its revenues from commissions, although fee-accounts now account for one-third of its revenues. 2001 2002 2003 2004 2005 2006 2007 Source: 8/6/08 Investment News; 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investm ent News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; Tiburon Research & Analysis 652 Ameriprise Financial s Securities America s Brecek & Young Advisors has $42.8 million expenses, up 15% since 2006. Ameriprise Financial s Securities America s Brecek & Young Advisors average rep payout is $93,000, down 25% since 2006. Ameriprise Financial s Securities America s Brecek & Young Advisors generates 0.85% return on assets, up from 0.45% since 2004 & 2005. Ameriprise Financial s Securities America s Brecek & Young Advisors has increased net income since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors reps invest client assets in a wide variety of products. Ameriprise Financial s Securities America s Brecek & Young Advisors generates more than half of its revenues from mutual funds and fee-accounts, while fee-accounts share of revenues has increased significantly since 2001. 129

Ameriprise Financial s Securities America s Brecek & Young Advisors offers mutual funds from mutual fund families. Ameriprise Financial s Securities America s Brecek & Young Advisors offers mutual funds. Ameriprise Financial s Securities America s Brecek & Young Advisors offers proprietary mutual funds. Ameriprise Financial s Securities America s Brecek & Young Advisors has mutual fund assets. Ameriprise Financial s Securities America s Brecek & Young Advisors generates $6.0 million in mutual fund revenues, which have been flat since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors has relationships with variable & fixed annuity providers. Ameriprise Financial s Securities America s Brecek & Young Advisors offers variable & fixed annuities. Ameriprise Financial s Securities America s Brecek & Young Advisors has variable & fixed annuity assets. Ameriprise Financial s Securities America s Brecek & Young Advisors offers proprietary variable & fixed annuities. Ameriprise Financial s Securities America s Brecek & Young Advisors generates $8.0 million variable & fixed annuity revenues, down 25% since its peak in 2004. Ameriprise Financial s Securities America s Brecek & Young Advisors has a feeaccounts business with 248 reps, $1.35 billion assets under management, and $13.3 million revenues. Ameriprise Financial s Securities America s Brecek & Young Advisors has 248 reps who utilize its fee-account programs, up 20% since 2006. Ameriprise Financial s Securities America s Brecek & Young Advisors has nearly all its reps utilize fee-accounts, which has increased from half since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors Generates $1.4 Billion in Fee-Account Assets Under Management, Up Significantly Since 2001 $226 Brecek & Young Advisors Fee-Account Assets ($ Millions) $456 $555 $660 $902 $969 $1,350 2001 2002 2003 2004 2005 2006 2007 Ameriprise Financial s Securities America s Brecek & Young Advisors has a number of fee- Source: 8/6/08 Investment News; 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investm ent News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; Tiburon Research & Analysis accounts. 675 130

Ameriprise Financial s Securities America s Brecek & Young Advisors generates $1.4 billion in fee-account assets under management, up significantly since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors Generates $13.3 Million Fee-Account Revenues, Up 550% Since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors fee-account programs are average. Ameriprise Financial s Securities America s Brecek & Young Advisors offers separately managed account program. Ameriprise Financial s Securities America s Brecek & Young Advisors offers multiple style portfolio program. Ameriprise Financial s Securities America s Brecek & Young Advisors offers unified managed account program. Ameriprise Financial s Securities America s Brecek & Young Advisors offers mutual fund wrap account program. Ameriprise Financial s Securities America s Brecek & Young Advisors offers broker wrap account program. Ameriprise Financial s Securities America s Brecek & Young Advisors offers fee-based brokerage account program. Ameriprise Financial s Securities America s Brecek & Young Advisors provides guidelines for discounting on its program. Ameriprise Financial s Securities America s Brecek & Young Advisors RIA policy is average. Ameriprise Financial s Securities America s Brecek & Young Advisors reps provide services through their own RIA, which has remained consistent since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors generates $5 million in annual individual securities, insurance, limited partnerships, & other products revenues, which is up more than 50% since 2001. Ameriprise Financial s Securities America s Brecek & Young Advisors offers selection of individual securities. Ameriprise Financial s Securities America s Brecek & Young Advisors clears through National Financial Services. Ameriprise Financial s Securities America s Brecek & Young Advisors has IPO access. Ameriprise Financial s Securities America s Brecek & Young Advisors offers individual securities research. 131

Ameriprise Financial s Securities America s Brecek & Young Advisors offers mutual funds research. Ameriprise Financial s Securities America s Brecek & Young Advisors individual securities commission schedule varies. Ameriprise Financial s Securities America s Brecek & Young Advisors offers life insurance offerings, including term life, fixed universal life, variable life, and variable universal life. Ameriprise Financial s Securities America s Brecek & Young Advisors offers proprietary life insurance offerings, including term life, fixed universal life, variable life, and variable universal life. Ameriprise Financial s Securities America s Brecek & Young Advisors has policies regarding outside direct insurance sales. Ameriprise Financial s Securities America s Brecek & Young Advisors offers long-term care & disability insurance. Ameriprise Financial s Securities America s Brecek & Young Advisors has expanded its alternative investments offerings to include hedge funds & managed futures, venture capital & private equity, real estate, and other alternative investments. Ameriprise Financial s Securities America s Brecek & Young Advisors also offers other products & services, including unit investment trusts, limited partnerships, certificate of deposits, financial planning services, property & casualty insurance, banking services, and personal trust services. Ameriprise Financial s Securities America s Brecek & Young Advisors pays out between 91% and 93% on mutual funds, variable annuities, & securities depending on rep production level. Ameriprise Financial s Securities America s Brecek & Young Advisors pays out 100% on insurance across all rep production levels. Ameriprise Financial s Securities America s Brecek & Young Advisors fee-account administration fees are average. Ameriprise Financial s Securities America s Brecek & Young Advisors transaction fees and/or ticket charges include mutual funds, annuities, fee-accounts, and individual securities. Ameriprise Financial s Securities America s Brecek & Young Advisors rep fees include monthly administration, licensing & renewal, bonds, education & training, and technology. Ameriprise Financial s Securities America s Brecek & Young Advisors customer service is average. 132

Ameriprise Financial s Securities America s Brecek & Young Advisors operations departments include licensing, new accounts, account transfers, legal & compliance, trading, commissions, and statements. Ameriprise Financial s Securities America s Brecek & Young Advisors product support includes mutual funds, annuities, fee-accounts, life & other insurance products, alternative investments, financial planning, insurance planning, and tax planning. Ameriprise Financial s Securities America s Brecek & Young Advisors sales & marketing support includes ads, newsletters, brochures, direct mailings, conference presentations web site building, and client referral programs. Ameriprise Financial s Securities America s Brecek & Young Advisors business building support includes start-up, marketing, staffing & compensation, benchmarking, and succession planning. Ameriprise Financial s Securities America s Brecek & Young Advisors technology offerings include new client sales, calculators, financial planning, asset allocation, and stock quotes, data & research services, prospectuses & applications, order entry, portfolio management, client account viewing, statements, quarterly client reviews, and contact management. Ameriprise Financial s Securities America s Brecek & Young Advisors has top producers trips, annual conferences, & regional meetings. Ameriprise Financial s Securities America s Brecek & Young Advisors has online training & other self-study offerings. Ameriprise Financial s fourth line of business is its newly renamed River Source Investments, including its mutual fund management business. Formerly named AXP Partners, has acquired UK s Threadneedle Investments in 2004. Mutual funds on average rank in the bottom third of all fund families according to Morningstar 60 mutual funds. Firm has $64 billion assets and $1.7 billion revenues. Ameriprise Financial s Riversource s mutual funds are nearly two-thirds equity funds. Ameriprise Financial s Riversource has a comprehensive offering of sixty proprietary mutual funds, including equity, asset allocation and fixed income funds. Ameriprise Financial s Riversource Investments mutual funds have lost significant assets. Ameriprise generates nearly $2 billion in investment management and service fee revenues, up almost 25%. Ameriprise Financial s transfer agent is The Bank of New York Ameriprise Financial opened two satellite offices enabling portfolio managers to select their own analysts. 133

Ameriprise Financial s started its partners funds program in 2001 to leverage third-party managers. Ameriprise Financial launched its funds-of-funds portfolio builder program in 2004. Ameriprise Financial expanded its distribution of funds by allowing distribution through third-parties and banks. Ameriprise Financial also manages the former American Express Asset Management, now known as Reinsurance. Ameriprise Financial s sixth business is River Source Insurance. Ameriprise Financial s seventh line of business is River Source Annuities. Ameriprise Financial offers 20 variable annuities. Ameriprise Financial s eighth business is River Source Distributors. Ameriprise Financial s ninth business is Threadneedle Investments, an independent Ameriprise Financial subsidiary based in the UK. Founded in 1994 and is based in London, England. Firm has 130 investment professionals, 40 mutual funds, $120 billion assets under administration, and $50 billion assets under management. The firm was acquired in 2003. Ameriprise Financial s Threadneedle Investments has 130 investment professionals. Ameriprise Financial s Threadneedle Investments has $120 billion assets under administration. Ameriprise Financial s Threadneedle Investments has $50 billion assets under management. Ameriprise Financial s Threadneedle Investments sub-advises half of Ameriprise Financial s global fund offerings. Ameriprise Financial s Threadneedle Investments has a number of businesses, including its mutual funds and hedge funds businesses. Ameriprise Financial s Threadneedle Investments first business is its mutual funds business. Ameriprise Financial s Threadneedle Investments has 60 mutual funds. Ameriprise Financial s Threadneedle Investments second business is its hedge funds business. Ameriprise Financial s Threadneedle Investments advises a number of hedge funds. Ameriprise Financial s Threadneedle Investments has hedge funds assets under management. 134

Organization & Ownership The final section of Ameriprise Financial s profile will address its organizational structure of ownership. Ameriprise Financial s web site has many sections including working for Ameriprise, products & services, retirement & life events, research & tools, and find an advisor. Ameriprise Financial s Securities America s web site provides information for prospective representatives and potential clients. Ameriprise Financial is led by CEO Jim Cracchiolo, who became CEO of American Express financial advisors in 2000. Other executives include: Brian Heath, Senior Vice President of Sales; Teresa Hanratty, Senior Vice President of Field Management; Claire Huang, Chief Marketing Officer; Barry Murphy, Executive Vice President of US Retail Group; and Ted Jenkin, General Counsel. Jim Cracchiolo became CEO of American Express Financial Advisors in 2000, prior to holding that post, he was president of TRS International for American Express Travel Related Services division. Brian Heath became senior vice president and general sales manager for American Express Financial Advisors in 1999, he was group vice president from 1994 to 1999, and prior to that was a regional vice president. Teresa Hanratty has been senior vice president of field management since 1999, and from 1995 to 1999 served as group vice president. Claire Huang had been the American Express Financial Advisor Chief Marketing Officer since 2001. Barry Murphy became executive vice president of the US retail group at American Express Financial Advisors in 2000. Ted Jenkin became general counsel of American Express Financial Advisors in 2000. Ameriprise Financial subsidiary Securities America is led by it CEO Steven Mcwhorter. Other executive include: Tom Cross, Senior Vice President of Product Distribution; Kirk Hulett, Senior Vice President of Strategy & Practice Management; Janine Wortheim, Vice President and Chief Marketing Officer; David Spinnar, Senior Vice President of Compliance; and Chris Flint, Senior Vice President of Branch Office Development. Steve McWhorter joined the firm in 1987 as general counsel. Janine Wortheim joined the firm in 1985 as an administrative assistant. Chris Flint joined Securities America in 1996, and served as a technology consultant and branch development consultant before leading recruiting. Ameriprise Financial s Securities America advisors, the firm s registered investment advisor is led by President Janine Wertheim. Other executive include: Patrick Doyle, Compliance Officer; Dennis King, Vice President of Business Development & Fee-Based Sales; Marla Cross, Vice President of Advisor Services; Deb Hansen, Marketing Director: Theresa James, Brokerage Operations Director. Ameriprise Financial is a public company traded on the New York Stock Exchange under the symbol AMP. Ameriprise Financial s Securities America has $12.5 million net excess capital, up 500% since 2001 but down 20% since its peak in 2004 & 2005. Ameriprise Financial has an average amount of long-term debt. 135

Ameriprise Financial s Securities America s Brecek & Young Advisors has average longterm debt. Ameriprise Financial has large shareholders equity. Ameriprise Financial s Securities America s Brecek & Young Advisors has average shareholders equity. Ameriprise Financial s Securities America Has $12.5 Million Net Excess Capital, Up 500% Since 2001 But Down 20% Since its Peak in 2004 & 2005 Securities America Net Excess Capital ($ Millions) $16.00 $16.00 $10.50 $12.50 Ameriprise Financial has net excess capital. Ameriprise Financial s Securities America s Brecek & Young Advisors has $2.3 million net excess capital, up over 650% since 2004 & 2005. $6.00 $4.00 $2.00 2001 2002 2003 2004 2005 2006 2007 Source: 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; Tiburon Research & Analysis Aon Aon was founded in 1964 as Ryan Insurance Group. The subsidiary companies founded as early as 1680. Company is based in Chicago, IL; has presence in 120 countries with 500 offices and 43,100 employees. Aon generates $9.0 billion revenues and $720 million in net income. Company is led by its CEO, Greg Case. AON is a publicly traded on the New York stock exchanged under the symbol AOC. Aon Comments Founded in 1964 Founded as Ryan Insurance Group Subsidiary companies founded as early as 1680 Based in Chicago, IL 120 countries 500 offices 43,100 employees 4,370 professionals $9.0 billion revenues $720 million in net income CEO: Greg Case Public company (NYSE: AOC) Web Site: www.aon.com History The first section of Aon s profile will explain the key historical events in the firm s development. Aon was founded as Ryan Insurance Group in 1964 and has evolved through three phases, including its Ryan Insurance Group, combined Insurance Company of America, and troubled & Greg Case Phases. Early Phase This section includes Aon s early phase. Aon has subsidiary companies dating as far back as 1680. Source: 9/20/07 Aon Web Site; 12/31/06 Aon Annual Report; 4/22/05 A on Web Site; 8/3/01 Insurance Letter; 2/21/01 A merican Banker (Seshunoff Information Services); Tiburon Research & Analysis Aon subsidiary Combined Insurance Company of America was founded in 1922. 136

Aon was founded as Ryan insurance Group in 1964. Company was founded by Patrick Ryan and is based in Chicago, IL. Middle Phase This section includes Aon s middle phase. Aon predecessor Ryan Insurance Group acquired combined insurance company of America in 1982. Aon changed its name from Ryan Insurance Group to Aon Corporation in 1987. Recent Phase This section includes Aon s recent phase. Aon had charges filed against the company by Eliot Spitzer in 2005. Statistics The second section of Aon s profile will review some key statistics regarding the firm. Aon has presence in over 120 countries. Aon has over 500 offices. Aon has over 43,000 employees, down 10% since 2004. Aon employs over 4,000 professionals. Aon generates $9 billion revenues, up 22% since 2002. Aon Generates $9 Billion Revenues, Up 22% Since 2002 Aon generates almost $110,000 in revenues per professional. Aon Revenues ($ Billions) Aon earns $720 million, up 60% since 2002. $7.4 $8.3 $8.6 $8.5 $9.0 Aon is one of world s largest insurance companies. Company is the largest reinsurance broker in world, largest captive insurance company manager, and second largest insurance brokerage. 2002 2003 2004 2005 2006 Source: 12/31/06 Aon Annual Report; 4/22/05 Aon Web Site; Tiburon Research & Analysis Businesses The third section of Aon s profile will outline its core businesses. Aon has a number of businesses, including insurance brokerage, captive insurance company manager, reinsurance broker, and Combined Insurance Company of America. 137

Insurance Brokerage Aon s first business is insurance brokerage. Capitve Insurance Company Manager Aon s second business is its captive insurance company manager business. Reinsurnace Broker Aon s third business is its reinsurance broker business. Combined Insurance Company of America Aon s fourth business is its subsidiary, Combined Insurance Company of America. The firm was founded in 1922 and is based in Chicago, IL. Company has $3 billion assets and is led by its CEO, Richard Ravin. Aon acquired Combined Insurance Company of America in 1992. Aon subsidiary Combined Insurance Company of America has $3 billion assets. Organization & Ownership The final section of Aon s profile will address its organizational structure of ownership. Aon has five sections on its web site, including about Aon, investors, employees, careers, and contact us. Aon is led by Greg Case, along with Daniel Bolger, Michael O Halleran, Ted Devine, and Cameron Findlay. Aon s Combined Insurance Company of America is led by its CEO Richard Ravin. Aon is a publicly traded on the New York Stock Exchange under the symbol of AOC. Arthur Gallagher Arthur Gallagher was founded in 1927 and is based in Itasca, IL. The company has $85 million revenues and is led by its CEO, Patrick Gallagher. History The first section of Arthur Gallagher s profile will explain the key historical events in the firm s development. Arthur Gallagher Founded in 1927 Based in Itasca, IL $85 million revenues CEO: Patrick Gallagher Web site: www.ajg.com Comments Arthur Gallagher was founded in 1927 and has evolved through three phases, including its early, middle, and recent phases. Source: 09/07/07; 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis Early Phase This section includes Arthur Gallagher s early phase. 138

Middle Phase This section includes Arthur Gallagher s middle phase. Recent Phase This section includes Arthur Gallagher s recent phase. Statistics The second section of Arthur Gallagher s profile will review some key statistics regarding the firm. Arthur Gallagher generates $85 million revenues. Arthur Gallagher has 50 agents in the bay area. Businesses The third section of Arthur Gallagher s profile will outline its core businesses. Arthur Gallagher has a number of businesses. Arthur Gallagher represents over 60 property & casualty carriers. Organization & Ownership The final section of Arthur Gallagher s profile will address its organizational structure of ownership. Arthur Gallagher has a web site. Arthur Gallagher is led by its CEO Patrick Gallagher Arthur Gallagher is owned by its shareholders. Axa Group Axa Group was founded in 1977 AXA Group as Ancienne Mutuelle and is based in Paris, France. The company has offices in 47 different countries, 150,000 employees, 52 million clients, and $1.7 trillion assets under management. In addition, their revenues reached $104 billion, with a net income of $6.7 billion. They are led by CEO Henri de Castries and the company has multiple web sites, including www.axa.com, www.axaequitable.com, www.alliancecapital.com, www.mony.com, and www.trustedadvisors.com Comments Founded in 1977 Founded as Ancienne Mutuelle Based in Paris, France 47 countries 150,000 employees 52 million clients $1.7 trillion assets under management $104 billion revenues $6.7 billion net income CEO: Henri de Castries Web sites: www.axa.com, www.axaequitable.com, www.alliancecapital.com, www.mony.com, and www.trustedadvisors.com Source: 1/31/07 Axa Group A nnual Report; 4/22/05 Axa Web Site; 8/20/01 Investment News; 8/16/01 American Banker; 7/31/01 RunMoney Conversation (Gregg); 7/30/01 Fortune; 7/2/01 Barron s; 7/01 F inancial Planning; 6/01 Institutional Investor; 5/28/01 Investment News; 5/23/01 Wall S treet Journal; 5/17/01 American Banker; 1/8/01 Forbes; 1/01 FinancialPlanning; 12/23/00 Financial Times; 12/11/00 American Banker; Tiburon Research & Analysis 139

History The first section of Axa Group s profile will explain the key historical events in the firm s development. Axa began as a French insurance company and has grown to establish a huge global presence. Businesses The second section of Axa Group s profile will outline its core businesses. Axa Group operates five main business lines, including three insurance businesses, asset management, and other financial services. More specifically, they are life & savings, property & casualty, international insurance, asset management, and Axa other financial services. Axa Financial Axa Group s US life & savings division, named Axa Financial, is the largest seller of variable life insurance. Axa Financial was founded in 1859 as The Equitable Corporation. It changed its name in 1999 to establish a new identity as a broad-based financial services company. The firm is based in New York, NY, has $17.5 billion in revenues, $917 million net income, and is the largest seller of variable life insurance and third largest seller of variable annuities. Axa Advisors have been aggressively running a spate of ads aimed at recruiting reps, saying the firm specializes in life confidence for both reps & their clients. The ads Outline 150 years of experience & Axa s position as #13 on the Fortune 500 Global list. They seem to be running ads exclusively in American Banker, Investment News, and to a lesser extent, Investment Advisor magazines. Axa Group s US life & savings division generates revenues of over $17 billion, down slightly from 2003. In 2002, US revenues equaled $17.3 billion, by 2003 had increased to $18.7 billion, but by 2004 were back down to $17.5 billion. Axa Group life & savings division earns over $900 million, up 80% since 1997. In 1997, US net income was $561 Axa Financial Generates the Majority of its Revenue From million, by 2002 net income had Individual Retirement, Annuity, & Investment Contracts increased to $707, and had reached $721 million in 2003. Axa Group Life & Saving s versus (Axa Financial) By 2004, earnings jumped Revenues by Product Type significantly to $916 million. Axa Financial generates the majority of its revenue from individual retirement, annuity, & investment contracts, which represent 56% of revenues. Life contracts generate an additional 21%, health contracts generate 10%, group retirement, annuity, & investment contracts bring in 9% and other services only Source: Tiburon Research & Analysis Gr oup Retirement, Annuity, & Inves tment Contracts 9% Health Contracts 10% Life Contracts 21% Other 4% Individual Retirement, Annuity, & Inve stme nt Contracts 56% 140

bring in 4%. Axa Financial distributes its equitable life insurance and other investment management products through both its captive sales force and third-parties. Axa Financial s distribution channels include Equitable Life Assurance Society, Alliance Capital Management, Sanford Bernstein, Other Money Management Subsidiaries, Axa Financial Advisors, Equitable Distributors, Grant Thornton, and Certified Public Accountant Program (Practice Enhancement Program). Axa Financial distribution channels include multiple companies. Equitable Life Assurance Society is a life insurance manufacturing company. Alliance Capital Management is a leading money manager, which owns Sanford Bernstein. In addition, Axa owns a majority stake in Alliance. Sanford Bernstein is another leading money manager, which Axa Financial uses as a distributor. Other money management subsidiaries include Regent Investor Services and Wood, Struthers, & Winthrop. Axa Financial distribution channels include multiple companies. Axa Financial Advisors resembles an investment banking division and it spent its last three years re-licensing reps and Getting general securities licenses & RIA status for reps. The firm has about 7,500 agents (3,500 trained in investments) and is adding a 1,000 new agents per year. Its products are distributed in an open architecture and they have $350 billion assets under management. Equitable Distributors wholesales equitable investments and insurance products to wirehouses, banks, money managers, and Axa Financial Advisors. Grant Thornton has an alliance with the six largest accounting firms. Certified Public Accountant Program (Practice Enhancement Program) includes 500 professionals. Axa Financial distributes its equitable life insurance and other investment management products through both its captive sales force and third-parties. The company distributes through Axa Financial Services, The Advest Group, and Mony Holdings. Axa Financial Services can be broken down to Axa Advisors, Axa Equitable Life Insurance, and Axa Network. Axa Equitable Life Insurance can then be broken down to Axa Life & Annuity Company and Axa Distributors. MONY Holdings subsidiary, MONY Life Insurance Company, can be broken down to MONY Life Insurance Company of America, US Financial Life Insurance Company, and Enterprise Capital Management. Axa Financial s first subsidiary is Axa Financial services. Axa Financial services subsidiary Axa Advisors was launched in 1999. The firm is based in New York, NY and was launched in 1999, to convert their 7,400 insurance agents into financial planners, though annuities and life insurance policies will continue to bear the Equitable name while the agents themselves will operate as Axa Advisors. Agents will not be measured by the amount of commission generated but by AUM, accounts opened, net broker-dealer commissions, and number of plans written. They launched a $40 million advertising campaign to promote Axa Advisors, its renamed sales force. Their financial plans are reviewed at the headquarters, the first 220 FAs to undergo training boosted their sales 31%, and retention is double the industry average. The firm has unit called Axa Network to source non-proprietary products. Their reps have proprietary product goals: I wouldn t do variable life with CNA because I wouldn t get enough production credits for it. I have to maintain a certain level of production credits to keep the roof over my head. The company s efforts to focus more on advice 141

than product sales led to massive defections. Axa s goal is to be a truly integrated financial-planning company focused on the affluent and emerging-affluent markets. Previously, Axa Financial had been only 60% owned, but since it was selling at a discount, Axa acquired it all (used proceeds from sale of DLJ). They hired Mellon Financial Corp President Kip Condron. Axa Advisors Axa Advisors focus on the market created by employees of public schools, universities, municipalities, health care, and non-profit organizations. They provide tax-sheltered annuities and employee deferred compensation. Axa Advisors has had more than 135 corporate office employees consistent since 2001. Axa Advisors has had more than 139 rep offices consistent since 2001. Axa Advisors has more than 6,000 reps, a figure that has decreased 20% since 2001. In 2001, the firm had 7,445 reps, but began to decline in 2002 when the number of reps fell to 7,091. By 2003, there were 6,084 reps, a number which lasted through 2004, but by 2005 the number of reps increased to 6,205. Axa Advisors has 45 reps per office, which is down since 2001. Specifically, in 2001 they averaged 54 reps per office, down to 51 in 2002, and fell to 44 in 2003, which lasted through 2004. By 2005, the average increased only slightly to 45 reps per office. Axa Advisors has very few reps that are OSJ managers, which has been consistent since 2001. In fact OSJ managers have remained at only a 1% share of Axa Advisors reps since 2001. Registered reps have consistently been 99% of all reps. Axa Advisors has nearly-three quarter of reps that have series 7 licenses, which has remained consistent since 2001. In fact, 30% of Axa Advisors representatives have not had their series 7 license since 2001. Axa Advisors has 621 reps that produce more than $100,000, which is down since 2001. In 2001, 745 reps accomplished the feat, 709 in 2002, and only 608 in 2003 and 2004 each. Axa s reps that produce more than $100,000 per year account for 10% of reps, which has been consistent since 2001. Axa Advisors has more than 125,000 client accounts, a number which has grown steadily since 2001. In 2001, the firm had 94,300 accounts, up to 101,800 in 2002, and 101,800 in 2003. By 2004 client accounts had risen to 109,000, but by 2005 the number increased to 129,700. Axa Advisors has more than 20 client accounts per rep, a figure which has increased steadily since 2001. In 2001, the average rep had 13 client accounts, up to 14 in 2002, and by 2003 the average rep had 17 accounts. By 2004 the number had risen to 18 and increased yet again in 2005 to reach 21 accounts per rep. Axa Advisors has more than $7.5 billion assets under administration, which have grown slowly in recent years. In 2001 the firm had $5.3 billion assets under administration, up 142

to $5.7 billion in 2002, and jumped to $7.2 billion in 2003, where it remained through 2004. By 2005, the firm had $7.5 billion assets under administration. Axa Advisors has more than $1 million assets under administration per financial representative, which has been flat since 2003. In 2001, the firm had $700,000 assets under administration per rep, up to $800,000 in 2002, and by 2003 had reached $1.2 million per rep, where it has stayed flat though 2005. Axa Advisors generates more than $400 million in annual revenues, which have grown slowly since 2001. Specifically, in 2001 they generated revenues of $352 million, $352 million in 2002 as well, $386 million in 2003, and $386 million in 2004 as well. By 2005 revenues generated equaled $413 million. Axa Advisors generates more than $65,000 in annual revenues per rep, which is up nearly 50% since 2001. In 2001, the average rep generated $47,000, which increased to $50,000 in 2002, and by 2003 had reached $63,000, where the average remained through 2004. By 2005, the average rep generated $67,000. Axa Advisors generates nearly 90% of its revenues from commissions, a figure which has been consistent since 2001. In 2001 through 2003, up-front & trailing commissions revenues were 86% of revenues, while fee-accounts were 5%, and hourly & other revenues equaled 9%. By 2004, up-front & trailing commissions revenues were 84% of revenues, while fee-accounts were 6%, and hourly & other revenues equaled 10%. In 2005, up-front & trailing commissions revenues were 83% of revenues, while feeaccounts were 7%, and hourly & other revenues equaled 10%. Axa Advisors generates a 5.5% return on assets, which is down from 6.6% in 2001. Return on assets dropped to 6.1% in 2002 and fell even further in 2003 to 5.4%, where it remained through 2004. Axa Advisors has net income fluctuate, since 2001. Axa Advisors has had long-term debt fluctuation, since 2001. Axa Advisors has had fluctuation in shareholders equity. Axa Advisors has $15 million net excess capital, a figure which has not changed since 2001. Axa Advisors reps invest client assets in a wide variety of products, including mutual funds, annuities, fee accounts, individual securities, insurance, and limited partnerships. Reps have invested 40% of client assets into mutual funds, 30% in Axa Advisors Reps Invest Client Assets in a Wide Variety of Products, Including Mutual Funds, Annuities, Fee Accounts, Individual Securities, Insurance, and Limited Partnerships Fee-Accounts 20% Axa Advisors Client Assets By Product Type Individual Se curities, Insurance, Limited Partners hips, & Other Products 10% Annuities 30% Mutual Funds 40% Source: 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial P lanning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 Financial P lanning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; 1/27/03 Investment News; Tiburon Research & Analysis 143

annuities, 20% in fee-accounts, and 10% into individual securities, insurance, limited partnerships, & other products. Axa Advisors mutual funds and annuities account for half of revenues, a figure which has been consistent since 2001. The breakdown of revenues has consistently remained 30% from mutual funds, 25% in annuities, 12% from fee-accounts, and 34% from individual securities, insurance, limited partnerships, & other products. Axa Advisors offers mutual funds from 65 mutual fund families, a figure which is up from only 20 in 2000. Axa Advisors offers multiple mutual funds. Axa Advisors does not offer proprietary mutual funds. Axa Advisors has mutual fund assets. Axa Advisors has over $100 million in mutual fund sales, which have been flat since 2001. Specifically, in 2001 the firm had $106 million in mutual fund revenues, revenues decreased to $102 million in 2002, but gained to $108 million in 2003, and fell again in2004 to $104 million. By 2005 however, revenues were back up to $112 million. Axa Advisors has relationships with a number of variable & fixed annuity providers. Axa Advisors offers a number of variable & fixed annuities. Axa Advisors has variable & fixed annuity assets. Axa Advisors offers a new group variable annuity called retirement strategies it hopes will stand apart by offering fiduciary services for plan sponsors & advisors. Axa Equitable Life will be a co-fiduciary on the product. They have targeted the product at retirement plans with less than $5 million in assets. Axa Advisors has nearly $100 million in variable & fixed annuity sales, which have increased slightly since 2001. In 2001, sales totaled $88 million, falling slightly in 2002 to $84 million, but rebounding in 2003 to reach $97 billion, which was equaled in 2004. By 2005, sales had reached a high of $99 million. Axa Advisors has multiple fee-accounts. Axa Advisors has nearly $2 billion in fee-account assets, up significantly since 2001. Specifically, in 2001 fee-account assets totaled $1.3 billion, rising slightly in 2002 to reach $1.4 billion, and by 2003 reached $1.8 billion. In 2004, fee-account assets remained at $1.8 billion and by 2005 had reached $1.9 billion. Axa Advisors has over $90 million in fee-accounts sales. In 2006, the company had $94 million in fee-account sales. Axa Advisors has nearly half of reps that utilize fee-accounts, a figure which has been steadily increasing since 2001. From 2001 through 2002 38% of reps utilized fee- 144

accounts, up to 41% in 2003, and by 2004, 42% of reps were utilizing them. By 2005, 45% of all reps utilized fee-accounts. Axa Advisors offers a series of fee-account programs, including capital advantage, capital visions, classic strategies, and third-party turnkey asset management programs. Axa Advisors feels that full knowledge of the products is the key to selling them. Axa offers a series of fee-based accounts. It has a mutual fund wrap account called Capital Visions. It has a broker wrap called Capital Advantage, which is similar to Merrill s Unlimited Advantage product, and its separately managed account program is called Classic Strategies. Axa also offers several TAMPs, such as Brinker, SEI, and Lockwood. These guys usually come in and train the reps on how to sell their respective products. Lockwood for example requires agents to go to Lockwood University, where the agent is taught how to sell the Lockwood product. They are pretty good at teaching the ins and outs of these products. Their private products are not good; they want to private label Separately managed account program supposedly being test marketed now Reportedly have access to many third-party TAMPs: We have selling agreements with them Axa Advisors offers a separately managed assets program called Classic Strategies. Utilizes only Axa managers: Alliance Capital Management, Regent Investor Services, and Wood, Struthers, & Winthrop Management Corporation and requires a $100,000 minimum investment. Axa Advisors separately managed assets program classic strategies is being test marketed. According to Rooney the program is, being test marketed in various markets. Axa Advisors offers a multiple style portfolio program. Axa Advisors offers a unified managed account program. Axa Advisors offers the Capital Advantage Fee-Account, a mutual fund wrap account. The fund is run by Pershing, and requires a $50,000 minimum investment. Axa Advisors provides a broker wrap account called the Capital Advantage. Axa Advisors offers a fee-based brokerage account program. AXA Advisors also offers several third-party turnkey asset management programs. Axa Advisors provides guidelines for discounting on its programs. The guidelines are separated by levels of $0-$250,000, $250,000-$500,000, $500,000-$1 million, $1 million- $2 million, $2 million-$5 million, and for accounts greater than $5 million. Axa Advisors has a RIA policy. 145

Axa has more than 10% of advisors representatives that provide services through their own RIA, a figure which has remained consistent since 2001. In fact 86% have not provided services through their own RIAs every from 2001 through 2005. Axa Advisors generates $87 million in annual individual securities, insurance, limited partnerships, & other products revenues, which is up from 2001. Axa Advisors offers a selection of individual securities. Axa Advisors clears through multiple clearing houses. Axa Advisors has initial public offering access. Axa Advisors offers individual securities research from DLJ. Axa Advisors offers mutual funds research. Axa Advisors individual securities commission schedule varies. Axa Advisors offers life insurance products such as term life and variable life from more than 100 carriers. Axa Advisors offers proprietary life insurance offerings, including term life, fixed, whole, or traditional life, fixed universal life, variable life, and variable universal life. Axa Advisors has policies regarding outside direct insurance sales. Axa Advisors offers both long-term care & disability insurance. Axa Advisors has expanded its alternative investments offerings to include hedge funds, venture capital, and real estate AXA Advisors first alternative investment is its hedge funds called the New Horizons funds. AXA Advisors advises one hedge fund. Axa Advisors also offers other products & services, including unit investment trusts, limited partnerships, certified deposit, and other products. Axa Advisors other products & services include financial planning, services, property & casualty insurance, banking services, and personal trust services. Axa Advisors payout grid for mutual funds, annuities, life & other insurance products, individual securities, alternative investments, and other products & services ranges from 80% to 94%. Axa Advisors provides reps with comprehensive medical, insurance, and retirement packages. Axa Advisors does not offer a deferred compensation plan. 146

Axa Advisors fee-account administration fees are average Axa Advisors transaction fees and/or ticket charges are applicable for mutual funds, annuities, fee-accounts, and individual securities. Axa Advisors representative fees include monthly administration, licensing & renewal, E&O or bond, education & training, technology, and other fees. Axa Advisors customer service is average. Axa Advisors operations department includes licensing, new accounts, account transfers, and legal & compliance. Axa Advisors operation departments also includes trading, commissions, and statements. Axa Advisors support staff includes attorneys, certified public accountants, certified financial planners, and insurance underwriters. Axa Advisors product support includes mutual funds, annuities, fee-accounts, and life & other insurance products. Fee-accounts support is available from Advisors Support Group. Product support for life & other insurance products is available from Advisors Support Group. Equitable life insurance support is provided and regional directors and planning specialists also provide support. There is a major case unit available for multi million dollar insurance coverage. Axa Advisors product support also includes alternative investments, financial planning, estate planning, and tax planning. Support for financial planning is available from Advisors Support Group, as well as regional directors and planning specialists also provide support. Axa Advisors sales & marketing support includes ads, newsletters, brochures, and direct mailings. The newsletters and brochures provide compliance approved materials. Axa Advisors sales & marketing support also includes conference presentations, web site building, and client referral programs. The conference presentations provide compliance approved materials. Axa Advisors business building support includes start-up support for new financial representatives. This includes a compliance manual, assistance with licensing and registration and training at the reps or local office. Other support is available for marketing, staffing & compensation, benchmarking, and succession planning. Axa Advisors has created a turnkey certified public accountant partnership program for practice enhancement. First it helps with strategy and the development of the company with relationships with companies to expand business. Next is partnering, which provides reps with various partners to hedge risks and protect practice from exposure, and includes back-office support. It also offer support for National Associate of Securities Dealers, American Institute of Certified Public Accountants, and State Board 147

of Accountancy. The program also offers two levels of rep service for co-sourcing. Other areas include local support and technology. Axa Advisors certified public accountants offering and varied compensation plans tailoring to the individual needs of registered financial representative and certified public accountants. Practice Enhancement Program allows certified public accountants with little time to conduct financial services to team up with a rep to offer these services. They offer variable compensation schedules such as earning a salary plus smaller bonuses, commissions or no salary with higher bonuses, commissions. The training program is offered at local offices and offers a good selection to choose from, easier to use Equitable insurance products. In addition, they are very thorough on compliance issues. Axa Advisors has launched a program to provide products, services, and training to certified public accountants entering the advisory business. The program is called Practice Enhancement Program (PEP) and it offers onsite training & support for obtaining professional designations for participating accountants to work with full-time agents of Axa. The program provides approved marketing materials and in between 1999-2002, Axa Advisors attracted 500 certified public accountants to its enhancement program. Revenue sharing ranges from a few percentage points from a simple referral to as much as 50%-60% if a certified public accountant wants to do most of the financial planning. Axa Advisors practice enhancement program is targeted to solve problems for small certified public accountant firms entering the planning business. The program provides two models for certified public accountants (generally encourages former): a pure referral model and a turnkey independent broker/dealer model. In fact, 55% of Axa certified public accountants claim that financial planning is the key part of their business. They generated an exclusive alliance with IA Consulting North America LLC, an association of 50 certified public accountants firms. Axa Advisors has an alliance with IA Consulting North America, a national accounting association consisting of fifty firms. The firm is based in Miami, FL. It makes available to the member accountants financial and insurance services they can provide to their clients. Axa makes its agents available for IA Consulting members to help formulate financial plans for clients and/or assist the certified public accountant in doing it him/herself. The deal requires IA Consulting's members to work only with Equitable members for 3 years, and prevents Equitable from striking similar pacts with the 10 or so IA-like Associations in the US. Axa Advisors has a relationship with Mitchell & Titus. Mitchell & Titus is the country s largest minority owned accounting and management consulting firm. The firm has established a stand-alone investment unit called MT Financial Services. The certified public accountant firm will provide financial products and services through Axa s Practice Enhancement Program. It is led by their Vice Chairman, Wayne Leevy. Axa Advisors provides two ways to participate in the practice enhancement program. Their level 1 practice enhancement program allows certified public accountants to personally provide financial services to client base and requires Series 7, 66, 65, life and health insurance licenses, and an internal financial planning designation. Their Level 2 practice enhancement provides financial services through an Axa advisor; CPAs are compensated for managing client relationships and requires Series 6, 63, life and health Insurance licenses. 148

Axa Advisor still provides assistance to the certified public accountant, even through the level 1 program. Assistance in identification of client goals and objectives and needs analysis/asset allocation strategy are provided to level 1 CPA accountant firms and level 2 CPA firm/axa financial advisors. They also provide assistance in investment/insurance selection and implementation to level 1 CPA firm/axa financial advisors and level 2 CPA firm/axa financial advisors. In addition they offer relationship management advice to level 1 and 2 CPA firms. Axa Advisors require the separation of the financial planning business from the accounting practice whether entering financial planning through the level 1 or level 2 programs. Separate client files will have to be maintained for financial services clients. These files and all other required books and records should be kept in a separate filing cabinet from other business records. The certified public accountant firm needs to establish a new phone line for the Axa Advisors business only. This phone line needs to be answered using the Axa Advisors name. The certified public accountant firm has to print separate business cards and stationary for the financial service practice. These materials cannot mention the name of the certified public accountant firm. The business cards and stationery needs to follow the guidelines in the Axa Advisors Compliance Manual for Representatives. Certified public accountant firm members cannot discuss accounting and financial services at the same meeting. The certified public accountant firm member must disclose at the beginning of a financial services meeting that in this meeting he/she is representing Axa Advisors and that the representation is separate from the firm s accounting practice. Axa Advisors and the certified public accountants determine commissions paid to the certified public accountants; Axa s program allows for certified public accountants to split fees and commissions. Payouts can range between 5% and 60% of the agent s commission and is based on level of certified public accountant involvement. Some certified public accountants just refer clients, while others are involved in the drafting of the recommendations. Certified public accountants are encouraged to stay involved in the process to ensure the client s satisfaction. Axa Advisors has also teamed with Grant Thornton to create joint affiliate, Grant Thornton advisors. They created 50/50 joint venture called Grant Thornton Advisors in 2000. Grant Thorton lacks advisors/planners but has lots of clients and Axa gets additional distribution. They planned gradual three year rollout of the program using outside advisors instead of existing Axa representatives but eventually the plan was for GT Advisors to license its own RIA and broker/dealer. The venture is headed by Axa Executive Vice President & Head of GT Advisors: Jeffrey McGregor, the former head David Abramson departed in 2001. The original idea was to build a stand alone broker/dealer and not use Axa Advisors. Grant Thornton serves middle market business owner clients and had to refer out investment advisory in the past. The firm has 42 offices with 3,000 employees, and is led by CEO Ed Nausman. The former CEO Domenick Esposito left to run BDO Seidman. Axa Financial Advisors has 6,000 insurance agents, 3,000 of which were retrained as financial planners. The firm is led by CEO Kip Condron, who replaced Edward Miller. Their president of retail distribution is John Lefferts. Axa s Grant Thornton Advisors is being repositioned by leadership changes at both firms and a change in the overall economic climate. The revised plan calls for Grant Thornton 149

professionals to simply refer client to a select group of Axa professionals, dubbed select Axa Advisors, who are the 75 top producers. These advisors to work 1-3 days per week in Grant Thornton offices and have an exclusive referral agreement. The old model made more sense in a bull market, but in bear market conditions, it made more sense to leverage Axa s existing sales force. Regulatory issues that arose from the certified public accounting owning part of the broker/dealer also complicated matters, however they have refocused to improve success and speed progress and the new model relies more heavily on capabilities of Axa Advisors. Axa Advisors has also established the practice development center located in Alpharetta, Georgia. The programs feature a combination of knowledge and skillfocused competencies for fee-based financial planning. Axa s practice enhancement program helps certified public accountants add financial services to their practices. Practice enhancement is available with partnership/cosourcing with Axa Advisors to provide financial services to clients. The same product and service offerings are available to both reps and certified public accountants alike. Certified public accountants utilize same technology and receive the same support available to reps. In level 1 service offerings the certified public accountant and/or certified public accountant firm takes an active role and is involved in financial planning and in implementation. They receive compensation based on payout schedule In level 2 service offerings, certified public accountant team up with Axa Advisor, and Axa Advisor offers financial services to clients. The certified public accountant is then compensated for the referral. Axa Advisors reps provide comments on the practice enhancement program, saying it s especially good for certified public accountants not offering financial services. Positive Comments HD Vest has all the resources for CPAs who wish to include financial services but Axa s Practice Enhancement program is great for CPAs who don t have time to offer financial services themselves Bringing in CPAs gives more service options to clients I have all the support I need to fulfill my client s needs Areas of Improvement Practice Enhancement program not positioned for CPAs to start selling on their own Certain level of production was necessary for getting support Axa Advisors technology offerings include financial planning technology such as new client sales, calculators, financial planning, asset allocation, and stock quotes. The financial planning technology includes a financial fitness profile with a financial planning tool, crescendo, financial profiles, CDA Weisenberger, Impact Technologies, and Pendi- Calc. Axa Advisors technology offerings also include data & research services, prospectuses & applications, order entry, portfolio management (through Axa Advisors Workstation), and client account viewing. Axa Advisors technology offerings also include statements, quarterly client reviews, and contact management. 150

Axa Advisors top producers trips, annual conferences, & regional meetings. Axa Advisors online training & other self-study offerings includes video based materials. Axa Financial subsidiary Axa Equitable Life Insurance is a leading provider of annuity and life insurance products. The firm was founded in 1859 as The Equitable Life Assurance Society of the United States, and is based in New York, NY. The company is a subsidiary of Axa Financial and has completed a $390 million initial public offering. The firm has $97 billion in assets and is a variable annuity and variable unit life provider. The company s web site is www.equidist.com. Axa Financial Subsidiary Axa Equitable Life Insurance is a Leading Provider of Annuity and Life Insurance Products Comments Founded 1859 - Formerly The Equitable Life Assurance Society of the United States Based in New York, NY Subsidiary of Axa Financial Completed $390 million initial public offering $97 billion in assets Variable annuity and variable unit life provider Web site: www.equidist.com Source: 7/26/06 Axa Equitable Life Insurance; 7/19/01 Am erican Banker; 7/8/01 New York Times; 7/2/01 Barron s; 7/01 Registered Representative; 7/01 E quitable Conversation (Rooney); 7/01 Bank Investment M arketing; 6/01 Treasury & Risk Management; Tiburon Research & Analysis Axa Financial has a subsidiary called Axa Network. MONY Axa acquired mutual of New Axa Acquired Mutual of New York (MONY Group) in 2004 York (MONY group) in 2004. MONY was founded in 1842 and Comments is based in New York, NY. The Founded 1842 Based in New York, NY firm has $55 billion assets under 2,430 employees $55 billion assets under management management and its Subsidiaries include Financial Life Insurance Company of Cincinnati and Trusted Securities Advisors - a subsidiaries include Financial Minneapolis-based broker/dealer Largest distribution is career agency (2,245 agents) MONY has a high-end customer base Life Insurance Company of Also sells some product through brokers, accountants and others Cincinnati and Trusted Sales presence in Latin America Acquired by Axa in 2004 Securities Advisors, which is a Chairman & CEO: Michael Roth President & Chief Financial Officer: Sam Foti Minneapolis based Executive Vice President & Chief Financial Officer: Richard Daddario CEO of The Advest Group; Grant Kurtz broker/dealer. The company has 2,430 employees, and its largest distribution is career Source: 12/01/04 MONY Web Site; 7/31/01 RunMoney Conversation (Gregg); 7/19/01 American Banker; 7/01 Insight; 6/27/01 Wall Street Journal; 12/24/00 MO NY Letter; 12/11/00 Am erican Banker; 10/30/00 Forbes; 10/00 Institutional Advisor; 10/00 On Wall Street; 8/28/00 American B anker; 8/00 Money; agency, which has a total of Tiburon Research & Analysis 2,345 agents. The company is led by its Chairman & CEO Michael Roth. Other executives include President & COO Sam Foti, EVP & CFO Richard Daddario, and the CEO of Advest Group, Grant Kurtz. MONY has a high-end customer base. MONY has a lot of small business and entrepreneurial clients that need trust services as well as some of the investment products. Previously, they only had mutual funds, annuities, and life insurance as product lines. They now also sell some product through brokers, accountants and others. The company has a sales presence in Latin America. 151

Axa s Mutual of New York (MONY Group) acquired Advest in 2000. They acquired Advest of Hartford, CT for $275 million in 2000, a move, which is intended to help MONY compete with larger financial services firms. Advest offers a range of financial planning, brokerage, insurance, and asset management services to high income and net worth clients in 15 states and Washington, DC. Advest was founded in 1898 and is based in Hartford, CT. The firm has $30 billion client assets, 1,780 employees, and is led by CEO Grant Kuntz. MONY has a lot of small business and entrepreneurial clients that need trust services as well as some of the investment products. Previously, they only had mutual funds, annuities, and life insurance as product lines. They now also sell some product through brokers, accountants and others. Axa subsidiary mutual of New York (MONY group) distributes through its career agency, regional brokers, and certified public accountant efforts. It s other distribution channels include life insurance & VAs, US Financial Life Insurance Company, Enterprise Capital Management, Matrix Capital Markets Group, Advest, Trusted Security Advisors, and MONY Independent Network. MONY distribution channels are several. US Financial Life Insurance Company offers term and universal life insurance to people considered special risks. Enterprise Capital Management has a mutual fund company and is looking to get into wraps. Matrix Capital Management is a middle market investment bank specializing in M&A advisory and includes exclusive sale & divestitures, acquisition searches and buy-side engagements. MONY distribution channels include their career agency, which has 2,245 career agents and only sells life insurance, annuity and mutual fund products. Advest is based in Connecticut and is a regional brokerage & investment banking firm with 90 offices in 18 states. It has approximately 800 reps and owns SAM Turnkey Asset Management Program in Florida. Trusted Securities Advisors is building certified public accountant & other tax professionals market. Its business was purchased by MONY and is targeting 70-80 Group B certified public accountant firms. MONY Independent Network is third party distribution, which distributes through broker general agents as well as broker/dealers. Axa subsidiary MONY Securities has more than 70 corporate office employees, which is up slightly since 2001. From 2001 through 2003 MONY had 69 employees, but from 2004 to 2005 they had 73. Axa subsidiary MONY Securities has 45 representative offices, a figure which has been consistent since 2001. Axa subsidiary MONY Securities has more than 1,200 representatives, a figure that has been steady since its drop in 2002. In 2001, MONY had 2,024 reps, but in 2002 they experienced a significant drop to 1,170 representatives. By 2003 the number had rebounded slightly, reaching 1,200, but fell again in 2004 to 1,281 employees. In 2005 however, the number of reps was back up to 1,204. Axa subsidiary MONY Securities has more than 25 reps per office, a figure which is down from 45 reps per office in 2001. In 2002, the firm had 26 reps per office, up to 26.7 in 2003, was down slightly in 2004 to 26.2 reps, and by 2005 was up to 26.8 reps per office. 152

Axa subsidiary MONY Securities consistently has less than 5% of representatives that have been OSJ managers. From 2001 through 2005 97% the firms reps have been registered reps only. Axa subsidiary MONY Securities consistently has three-quarters of reps that have had series 7 licenses. In 2001, 75% of reps had their series 7, 73% in 2002, and in 2003, the percentage dropped to 56%. By 2004, the percentage of series 7 licensed reps rebounded to 75%, where it remained through 2005. Axa subsidiary MONY Securities has nearly 125 reps that produce more than $100,000 per year, a figure which is down from more than 200 in 2001. The number of high producing reps dropped from 202 in 2001 to only 117 in 2002. In 2002 the number reached 120, but fell to 118 in 2004, and by 2005 bas back up to 120. Axa subsidiary MONY Securities consistently has less than 10% of representatives that have produced more than $100,000 per year since 2001. Axa subsidiary MONY Securities has nearly 80,000 client accounts, a figure which has grown steadily since 2001. Client accounts in 2001 totaled 46,500 and rose to 49,700 in 2002. Account numbers jumped significantly in 2003, to reach 62,900 and increased to 67,300 in 2004. Another big increase took place in 2005 when account numbers totals 79,700. Axa subsidiary MONY Securities has more than 65 client accounts per representatives, a figure which has increased steadily since 2001. Client accounts per representative averaged 23 in 2001, nearly doubled in 2002 to reach 43, and had increased to 52 in 2003. By 2004 the average continued to increase, reaching 57 and by 2005 had hit 66 clients per representative. Axa subsidiary MONY Securities has nearly $30 billion assets under administration, which have grown steadily since 2002. From 2001 through 2002, the company had $18 billion assets under administration, increased to $20 billion in 2003, and had reached $28 billion in 2004. The upward trend continued into 2005, when they hit $29 billion. Axa subsidiary MONY Securities has nearly $25 million assets under administration per representative, which has increased steadily since 2001. In 2001, assets under administration totaled $9 million per representative, nearly doubling in 2002 to reach $16 million, and continued increasing in 2003 up to $20 million. From 2004 through 2005, assets under administration remained at $24 million per rep. Axa subsidiary MONY Securities generates more than $65 million in annual revenues, which have nearly doubled since 2001. From 2001 through 2002, the company had $37 million in revenues each year, which increased to $53 million in 2003, and had reached $62 million in 2004. The upward trend continued into 2005, when they hit $66 million. Axa subsidiary MONY Securities generates $55,000 in annual revenues per representative, which have increased significantly since 2001. Specifically, in 2001 revenues per rep equaled $18,000, by 2002 they had reached an average of $31,000, and in 2004 hit $44,000. The upward trend continued into 2004, when the average reached $52,000 and by 2005 had hit $55,000. 153

Axa subsidiary MONY Securities has consistently generated nearly all of its revenues from commissions, since 2001. In 2001 up-front & trailing commissions revenues were 90% of revenues, while fee-accounts were 5%, and hourly & other revenues equaled 5%. In 2002 up-front & trailing commissions revenues were 92% of revenues, while feeaccounts were 5%, and hourly & other revenues equaled 3%. In 2003 up-front & trailing commissions revenues were 88% of revenues, while fee-accounts were 8%, and hourly & other revenues equaled 4%. By 2004, up-front & trailing commissions revenues were 89% of revenues, while fee-accounts were 6%, and hourly & other revenues equaled 5%. In 2005, up-front & trailing commissions revenues were 89% of revenues, while fee-accounts were 6%, and hourly & other revenues equaled 5%. Axa subsidiary MONY Securities has consistently generated almost 0.25% return on assets, since 2001. Their returns on assets equaled 0.21% in 2001, 0.20% in 2001, 0.23% in 2003, 0.22% in 2004, and 0.23% in 2005. Axa subsidiary MONY Securities has a net income. Axa subsidiary MONY Securities has long-term debt. Axa subsidiary MONY Securities has in shareholders equity. Axa subsidiary MONY Securities has $5 million net excess capital, which has increased by 250% since 2001. Net excess capital equaled $2 million in 2001, $1 million in 2002, $1 million in 2003, and was up to $5 million in 2004 as well as in 2005. Axa subsidiary MONY Securities reps invest client assets in a wide variety of products, including mutual funds, annuities, fee accounts, and other products. Reps have invested 40% of client assets into mutual funds, 30% in annuities, 20% in fee-accounts, and 10% into individual securities, insurance, limited partnerships, & other products. Axa Subsidiary MONY Securities Reps Invest Client Assets in a Wide Variety of Products, Including Mutual funds, Annuities, Fee Accounts, and Other Products MONY Securities Client Assets by Product Type Individual Se curities, Insurance, Limited Partners hips, & Other Products 10% Fee-Accounts 20% Mutual Funds 40% Axa s mutual funds and annuities have consistently accounted for more than threequarters of Axa subsidiary MONY Securities revenues, since 2001. In fact, from 2001 through 2005 mutual funds have brought in 79% of MONY Securities revenues, while annuities account for 5%, fee-accounts 8%, and individual securities, insurance, limited partnerships, & other products have accounted for 8%. Axa subsidiary MONY Securities offers mutual funds from multiple mutual fund families. Annuities 30% Source: 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial P lanning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 Financial P lanning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; 1/27/03 Investment News; Tiburon Research & Analysis Axa subsidiary MONY Securities offers multiple mutual funds. 154

Axa subsidiary MONY Securities offers a number of proprietary mutual funds. Axa subsidiary MONY Securities has mutual fund assets. Axa subsidiary MONY Securities has more than $50 million in mutual fund sales, up 70% since 2001. From 2001 to 2002 mutual fund revenues remained flat, at $29 million, but increased to $42 million in 2003. The upward trend continued in 2004, when mutual fund revenues reached $49 million and by 2005 they hit $52 million. Axa subsidiary MONY Securities has relationships with a number of variable & fixed annuity providers. Axa subsidiary MONY Securities offers a number of variable & fixed annuities. Axa subsidiary MONY Securities has variable & fixed annuity assets. Axa subsidiary MONY Securities offers proprietary variable & fixed annuities. Axa subsidiary MONY Securities has $3 million in variable & fixed annuity sales, which have increased slightly since 2001. Variable & fixed annuities revenues reached $2 million in 2001 and again in 2002. Revenues reached $3 million in 2003, 2004, and in 2005. Axa subsidiary MONY Securities has a number of fee-accounts. Axa subsidiary MONY Securities has nearly $5 billion in fee-account assets, up more than 25% since 2001. In 2001, fee-account assets totaled $3.7 million, fell to $2.4 million in 2002, and gained in 2003 to reach $2.8 million. By 2004, asset levels were back up to $3.5 million and by 2005 had reached $4.8 million. Axa subsidiary MONY Securities has $5 million in fee-accounts sales, which have nearly doubled since 2001. Fee-account revenues reached $3 million in 2001 and again in 2002. Revenues reached $4 million in 2003, and $5 million in 2004 and again in 2005. Axa subsidiary MONY Securities has nearly half of reps that utilize fee-accounts, a figure which has been steadily increasing since 2001. In 2001 and 2002 only 38% of reps utilized fee-accounts and by 2003 41% were utilizing them. The upward trend continued into 2004, with 42% utilizing them and by 2005, 45%. Axa subsidiary MONY Securities fee-account programs include a number of offerings. Axa subsidiary MONY Securities offers include a separately managed account program. Axa subsidiary MONY Securities offers a number of multiple style portfolio programs. Axa subsidiary MONY Securities offers a number of unified managed account programs. Axa subsidiary MONY Securities offers a number of mutual fund wrap account program. Axa subsidiary MONY Securities offers a broker wrap account program. 155

Axa subsidiary MONY Securities offers a fee-based brokerage account program. Axa subsidiary MONY Securities provides guidelines for discounting on its programs. The discounts are offered at various account values, including: $0-$250,000, $250,000- $500,000, $500,000-$1 million, $1 million-$2 million, $2 million-$5 million, and for accounts greater than $5 million. Axa subsidiary MONY Securities has a registered investment advisor policy. Axa subsidiary MONY Securities has more than 10% of reps that have provided services through their own registered investment advisor. In fact 14% of their reps have consistently provided services through their own registered investment advisor. Axa subsidiary MONY Securities generates $5 million in annual individual securities, insurance, limited partnerships, & other products revenues, which have nearly doubled since 2001. Revenues reached $3 million in 2001 and again in 2002. Revenues reached $4 million in 2003, and $5 million in 2004 and again in 2005. Axa subsidiary MONY Securities offers a selection of individual securities. Axa subsidiary MONY Securities clears through NFS. Axa subsidiary MONY Securities has initial public offering access. Axa subsidiary MONY Securities offers individual securities research. Axa subsidiary MONY Securities offers mutual funds research. Axa subsidiary MONY Securities individual securities commission schedule is similar to that of other companies. Axa subsidiary MONY Securities offers multiple life insurance offerings, including term life, fixed, whole or traditional life and variable life. Axa subsidiary MONY Securities offers proprietary life insurance offerings, including term life, fixed, whole or traditional life, and variable life, as well as fixed universal life and variable universal life. Axa subsidiary MONY Securities has a number of policies regarding outside direct insurance sales. Axa subsidiary MONY Securities offers long-term care & disability insurance. Axa subsidiary MONY Securities has expanded its alternative investments offerings to include hedge funds, venture capital, and real estate. Axa subsidiary MONY Securities also offers unit investment trusts, limited partnerships, certified deposits, and other products & services. Axa subsidiary MONY Securities payout grid for mutual funds, annuities, life & other insurance products, individual securities, alternative investments, and other products & 156

services includes payouts from 80% to 94%. When rep production equals $0-$50,000, rep payout equals 80%. At the $50,000-$100,000 level payout equals 85%, at $100,000-$250,000 payout equals 85%, and at $250,000-$500,000 the payout equals 90%. By the time rep production reaches $500,000-$1 million rep payout equals 92% and production greater than $1 million equals 94% payout. Axa subsidiary MONY Securities fee-account administration fees are standard. Axa subsidiary MONY Securities transaction fees and/or ticket charges mutual funds, annuities, fee-accounts, and individual securities. Axa subsidiary MONY Securities representative fees include monthly administration, licensing & renewal and other fees. Fees also include E&O or bond, education & training, and technology. Axa subsidiary MONY Securities customer service is average. Axa subsidiary MONY Securities operations departments include licensing, new accounts, account transfers and legal & compliance Axa subsidiary MONY Securities operations departments include trading, commissions, and statements. Axa subsidiary MONY Securities product support includes mutual funds, annuities, feeaccounts, and life & other insurance products. MONY Securities product support includes alternative investments, financial planning, insurance planning, and tax planning. Axa subsidiary MONY Securities sales & marketing support includes ads, newsletters, brochures, and direct mailings. MONY Securities sales & marketing support also includes conference presentations, web site building, and client referral programs. Axa subsidiary MONY Securities business building support includes start-up, marketing, staffing & compensation and succession planning. Axa subsidiary MONY (Mutual of New York) offers a program called Trusted Advisors. The program is based in Minnetonka, MN. The program helps certified public accountants grow their practice with financial service capabilities. One of their advertising campaigns leads with public relations. Licensing fees are those costs associated with the NASD and any State Registration Fees as well as all corresponding exam fees. Payout is dependent on the amount of support required and the type of Brokerage services, as there are over 8,000 mutual funds, all listed securities - stocks, bonds, etc. The company clear through NFSC and is led by its Chairman Richard Engebretson. The company web site is www.trustedadvisors.com. Axa subsidiary MONY s Trusted Advisors program encourages certified public accountants to partner with MONY representatives to offer insurance and securities products. It is actually a very old program and was acquired by the MONY Group in 157

1992. There are approximately 300 certified public accountants firms in the program. IT provides two main ways for certified public accountants to distribute financial products; both of which require a Series 6 or 7. The program partners CPAs with a MONY representative and they share commissions or the CPA becomes a MONY representative. Payout to reps is 55%-90%, depending on 12 month rolling production. This payout is shared if the certified public accountants choose the partnering option with the share determined on a case-by-case basis. MONY encourages the partnering model because they feel that most certified public accountants have poor sales skills, do not understand the products, and are not interested in taking much time away from their tax business. It offers a wide variety of products, software, training and support. Axa subsidiary MONY s Trusted Advisors program offers two models for certified public accountants. The first model is when the certified public accountant partners with a MONY representative. In this model, certified public accountant earns Series 6 or 7 to receive commissions, and hangs their license with MONY. In addition, the certified public accountant and MONY representative make their own agreement on commission splitting. The second model is when the certified public accountant earns Series 6 or 7 to receive commissions and hangs their license with MONY. The certified public accountant does all securities work, earning 55%-90% commission payout based on 12 month rolling production. Axa s CPA firms working for MONY opting for the partnering model accounted for the vast majority of CPA firms. In fact, 83% have opted to participate in the partnering model. Axa subsidiary MONY representatives partner with certified public accountants that generally earn about half of the commissions. Axa subsidiary MONY s financial representatives that were once certified public accountants earn up to 90% of the payout. Their minimum payout level is 55%. Axa subsidiary MONY encourages certified public accountants to partner with a MONY representative rather than attempting to sell products alone. MONY believes that most certified public accountant have a tremendous amount of financial information about their clients as well as their clients trust. However, they also find that most certified public accountants do not understand the sales process, are concerned that appearing too sales-y will offend their clients, and would prefer to offload the sales process to someone else. In addition, many certified public accountants do not fully understand financial products, and are worried that they will make a mistake when venturing outside their tax and audit expertise. Many certified public accountant are too dedicated to their audit and tax practices to spend sufficient time on their clients financial products needs. As a result, MONY encourages certified public accountant who are interested in entering the investments business to partner with a MONY representatives that has the appropriate skills and knowledge and can dedicate himself 100% to selling products. Axa subsidiary MONY s Trusted Advisor program offers an array of services, including insurance & investments and training. Axa subsidiary MONY s Trusted Advisor program allows certified public accountants access to a wide variety of products. Their investment advisory services products include managed accounts, access to professional money managers, and wrap 158

accounts. Their Insurance services products are provided through 85 insurance carriers for life, health, disability, long term health care, and annuities. Other product offerings include retirement planning, estate planning, buy-sell agreements, and individual stocks. Axa subsidiary MONY s Trusted Advisor program provides certified public accountants access to a suite of software and operational support services. These include MAXXbroker, Financial Profiles, Adding Value, and Contact Partner, Client Management System. Complimentary operational support services include administration of licensing and compliance procedures, back office operations (i.e. trading, clearing, account processing, customer statements), free access to professionals in estate planning and complicated financial planning matters, complementary marketing support services, and joint seminar marketing material, client newsletters. Axa subsidiary MONY s Trusted Advisor program also provides access to training. Initial training is designed to inform the CPA firm on how to add financial planning products and includes ongoing training, complimentary computer-based training, free regularly scheduled training seminars, cluster meetings, and an annual partner s conference. Axa subsidiary MONY s Trusted Advisor program also provides complementary operational support services. These include administration of licensing and compliance procedures, back office operations (i.e. trading, clearing, account processing, customer statements), free access to professionals in estate planning and complicated financial planning matters, complementary marketing support services, advertising, and joint seminar marketing materials, client newsletters. Axa s Richard Engebretson leads Axa subsidiary MONY s Trusted Advisors program. Mike Jorgensen is the Chief Operating Officer and Cary Parker is the VP of strategic marketing and technology. Axa subsidiary MONY Securities technology offerings include new client sales, calculators, financial planning, asset allocation and stock quotes. MONY Securities technology offerings include data & research services, prospectuses & applications, order entry, portfolio management, and client account viewing. MONY Securities technology offerings also include statements, quarterly client reviews, and contact management. Axa subsidiary MONY Securities events include top producers trips, annual conferences, & regional meetings. Axa subsidiary MONY Securities has online training & other self-study offering online training and other self-study offerings. Organization & Ownership The final section of Axa Group s profile will address its organizational structure of ownership. Axa Group is led by its CEO, Henri de Castries. The company s senior management also includes, Claude Brunet, the transversal operations & projects, human resources, brand & communication, Kip Condron CEO of Axa Financial, Denis Duverne of finance, control & strategy, and Franzois Pierson CEO of Axa France. 159

Axa Financial is led by CEO Kip Condron. Senior management includes Stanley Tulin Chief Financial Officer, Robert Jones Executive Vice President of Distribution, Richard Silver General Counsel, Jerald Hampton Executive Vice President, Kevin Murray Chief Investment Officer, Jennifer Blevins Executive Vice President of Human Resources, Mary Beth Farrell Executive Vice President of Service Delivery, and Richard Dziadzio Executive Vice President of Finance & Corporate Administrative Services. Brown & Brown Brown & Brown was founded in 1939 and is based in Daytona, FL. Company generates $878 million revenues and $172 million net income. Brown & Brown is led by its CEO, Hyatt Brown. Brown & Brown is a public company traded on the New York Stock Exchange under the symbol BRO. Brown & Brown Comments Founded in 1939 Based in Daytona, FL $878 million revenues $172 million net income CEO: Hyatt Brown Public company (NYSE: BRO) Web site: www.bbinsurance.com History The first section of Brown & Brown s profile will explain the key historical events in the firm s development. Source: 9/20/07 Brown & Brown Web Site; 5/16/07 Brown & Brown Annual Report; 9/7/07 Brown & Brown Web Site; Tiburon Research & Analysis Brown & Brown has evolved through three phases, including its early, middle, and recent phases. Early Phase This section includes Brown & Brown s early phase. Brown & Brown was founded in 1939. Middle Phase This section includes Brown & Brown s middle phase. Recent Phase This section includes Brown & Brown s recent phase. Statistics The second section of Brown & Brown s profile will review some key statistics regarding the firm. Brown & Brown generates revenues of $878 million, up significantly from $456 million in 2002. Brown & Brown Generates Revenues of $878 Million, Up Significantly From $456 Million in 2002 $456 $551 $647 $786 $878 2002 2003 2004 2005 2006 Source: 5/16/07 Brown & Brown Annual Report; Tiburon Research & Analysis Brown & Brown Revenues ($ Millions) 160

Brown & Brown generates $172 million in net income. Businesses The third section of Brown & Brown s profile will outline its core businesses. Brown & brown has three businesses, including general insurance, programs division, and reinsurance. Brown & Brown s first business is general insurance. Brown & Brown s second business is programs division. Brown & Brown s third business is reinsurance. Organization & Ownership The final section of Brown & Brown s profile will address its organizational structure of ownership. Brown & Brown s web site has seven sections, including about us, services, locations, careers, investor relations, corporate governance, and media. Brown & Brown is led by its CEO Hyatt Brown. Brown & Brown is a publicly traded company on the New York Stock Exchange under the symbol BRO. Cullen & Frost Bankers Cullen & Frost Bankers was founded in 1968 and is based in San Antonio, TX. Company has $13.2 billion assets and is led by its CEO, Richard Evans. Cullen & Frost Bankers is a publicly traded company on the New York Stock Exchange under a symbol CFR. History The first section of Cullen & Frost Bankers profile will explain the key historical events in the firm s development. Cullen & Frost Bankers was founded in 1968 and has evolved through three phases, including its early, middle, and recent phases. Businesses The second section of Cullen & Frost Bankers profile will outline its core businesses. Cullen & Frost Bankers has a number of businesses, including personal banking, business banking, and Frost Insurance Agency. Frost Insurance Agency Cullen & Frost Bankers last business is its Frost Insurance Agency. Organization & Ownership The final section of Cullen & Frost Bankers profile will address its organizational structure of ownership. 161

Cullen & Frost Bankers has three sections on its web site, including personal solutions, business solutions, and other services. Cullen & Frost Bankers is led by its CEO Richard Evans. Management team also includes Phillip Green, Chief Financial Officer. Cullen & Frost Bankers is a publicly traded company on the New York Stock Exchange under the symbol CFR. Farmers Insurance Farmers Insurance was founded in 1928 and is based in Los Angeles, CA. History The first section of Farmer s Insurance s profile will explain the key historical events in the firm s development. Farmers Insurance was founded in 1928 and has evolved through three phases, including its early, middle, and recent phases. Early Phase This section includes Farmers Insurance s early phase. Middle Phase This section includes Farmers Insurance s middle phase. Recent Phase This section includes Farmers Insurance s recent phase. Statistics The second section of Farmers Insurance s profile will review some key statistics regarding the firm. Businesses The third section of Farmers Insurance s profile will outline its core businesses. Farmers Insurance has a number of businesses. Organization & Ownership The final section of Farmers Insurance s profile will address its organizational structure of ownership. Farmers Insurance has a web site. Farmers Insurance is led by its CEO. Farmers Insurance is owned by Zurich Financial Services. Hewitt Associates Hewitt Associates was founded in 1940 by Ted Hewitt and is based in Lincolnshire, IL. Company operates in 35 countries, has 24,000 employees, and 2,500 clients. Hewitt Associates generates $2.9 billion revenues and $116 million net income. Company is led 162

by its CEO, Russ Fradin. Hewitt Associates is a publicly traded company on the New York Stock Exchange under the symbol HEW. History The first section of Hewitt Associate s profile will explain the key historical events in the firm s development. Hewitt Associates was founded in 1940 and has evolved through three phases, including its early phase, middle phase, and recent phases. Hewitt Associates Comments Founded in 1940 - Founded by Ted Hewitt Based in Lincolnshire, IL 35 countries 24,000 employees 2,500 clients $2.9 billion revenues $116 million net income CEO: Russ Fradin Public company (NYSE:HEW) Web site: www.hewittassociates.com Early Phase This section includes Hewitt Associate s early phase. Source: 12/15/06 Hewitt Associates Annual Report; 12/01 A Complete Guide to the Industry (K ennedy Information Research Group); 5/11/98 Business Week; Tiburon Research & Analysis Hewitt Associates was founded in 1940. Middle Phase This section includes Hewitt Associate s middle phase. Recent Phase This section includes Hewitt Associate s recent phase. Statistics The second section of Hewitt Associate s profile will review some key statistics regarding the firm. Hewitt Associates has presence in 35 countries. Hewitt Associates employs 24,000 employees, up significantly from 3,800 in 1996. Hewitt Associates Generates Revenues of $2.8 Billion, Up 65% Since 2002 Hewitt Associates Revenues ($ Billions) $2.8 $2.8 Hewitt Associates has 2,500 clients. $1.7 $2.0 $2.2 Hewitt Associates generates revenues of $2.8 billion, up significantly from $1.7 billion in 2002. Hewitt Associates generates almost $150,000 in revenues per professional. 2002 2003 2004 2005 2006 Source: 12/15/06 Hewitt Associates Annual Report; 12/98 Wet Feet Press; Tiburon Research & Analysis 163

Businesses The third section of Hewitt Associate s profile will outline its core businesses. Hewitt Associates has at least three businesses, including employee benefits, organizational effectiveness consulting, and investment consulting. Hewitt Associates first business is employee benefits. Hewitt Associates employee benefits has 5 million participants. Hewitt Associates second business is organizational effectiveness consulting. Hewitt Associates third business is Hewitt Investment Group s investment consulting business. The group has 68 pension clients and $79 billion in pension assets under management. Hewitt Investment Group has 68 pension clients. Hewitt Investment Group manages $79 billion in pension assets under management. Organization & Ownership The final section of Hewitt Associate s profile will address its organizational structure of ownership. Hewitt Associates web site has five sections, including about Hewitt, our services, knowledge center, investor relations, and working here. Hewitt associates is led by its CEO Russ Fradin. Hewitt associates is a publicly traded company on the New York Stock Exchange under the symbol HEW. Hub International Hub was founded in 1998 as a result of a merger of 11 Canadian broker/dealers. The company is based in Brampton, Canada. History The first section of Hub s profile will explain the key historical events in the firm s development. Hub International has evolved through three phases, including its early, middle, and recent phases. Hub International Source: Tiburon Research & Analysis Comments Founded in 1998 Result of a merger of 11 Canadian broker/dealers Based in Brampton, Canada Web site: www.hubinternational.com 164

Businesses The second section of Hub s profile will outline its core businesses. Hub International has a number of businesses, including PLI Brokerage Insurance Solutions. PLI Brokerage Insurance Hub s PLI is headquartered in Warren, NJ and is one of the largest personal insurance brokers in the U.S. The company integrates the role of insurance into the financial planning process. Organization & Ownership The final section of Hub s profile will address its organizational structure of ownership. Hub International has a web site. Hub International is led by its CEO. Hub International is owned by its shareholders. Lincoln Financial Group Lincoln Financial was founded in 1905 and is based in Philadelphia, PA. The firm has 10,744 employees, $501 billion life insurance in force, and $245 billion assets under management. Lincoln Financial generates $9.1 billion revenues and $1.3 billion net income. The company is let by its Chairman & CEO, Jon Boscia. The company is listed on the New York Stock Exchange under the symbol: LNC. Lincoln Financial Group History The first section of Lincoln Financial Group s profile will explain the key historical events in the firm s development. Lincoln Financial Group was founded in 1905 and has grown into a fully diversified financial firm. Early Years This section includes Lincoln Financial Group s early years. Source: 3/1/07 Lincoln Financial Annual Report; 6/16/05 Wall Street Journal; 5/05 Investment A dvisor; 4/25/05 Lincoln Financial Web S ite; 7/31/01 Run Money Conversation (Gregg); 7/31/01 American Banker; 7/30/01 Wall Street Journal; 7/24/01 Lincoln Financial Web Site; 7/23/01 Insurance Letter; 7/19/01 American Banker; 7/8/01 New York Times; 7/5/01 Brinker Capital Brochure; 7/2/01 Investment News; 7/2/01 Barron s; Tiburon Research & Analysis Lincoln Financial was founded in 1905. At the time the firm had 4 employees and $116,000 assets under management. Lincoln Financial acquired Michigan State Life Insurance in 1913. Comments Founded in 1905 Based in Philadelphia, PA 10,744 employees $501 billion life insurance in force $245 billion assets under management $9.1 billion revenues $1.3 billion net income Chairman & CEO: Jon Boscia NYSE listed: LNC Web site: www.lnc.com, www.lincolnlife.com, www.lfg.com, www.lincolnuk.co.uk, www.delawareinvestments.com, and financialplanningcareers.com 165

Lincoln Financial acquired pioneer life in 1917. Lincoln Financial acquired Reliance Life Insurance Company of Pittsburgh in 1951. Lincoln Financial acquired American States Insurance in 1962. Lincoln National Corporation was formed in 1968. Lincoln Financial became a publicly traded company in 1969. Acquisition Years This section includes Lincoln Financial Group s acquisition years. Lincoln Financial formed Investment Management in 1973. Lincoln Financial acquired Security Life of Connecticut in 1979. Lincoln Financial founded Pension Insurance in 1980. Lincoln Financial acquired First Penn-Pacific Life in 1981. Lincoln Financial acquired Cannon Assurance Limited in 1984. Lincoln Financial acquired K&K Insurance in 1984. Lincoln Financial acquired Richard Leahy Corporation in 1984. Lincoln Financial began trading on the London stock exchange in 1984. Lincoln Financial sold Dominion Life Assurance in 1985. Lincoln Financial acquired Western Casualty & Surety Company in 1985. Lincoln Financial acquired Fireman s Fund Employers Health Insurance in 1986. Restructuring This section includes Lincoln Financial Group s restructuring. Lincoln Financial sold K&K Insurance in 1993. Lincoln Financial acquired Delaware Management Holdings in 1995. Lincoln Financial held an IPO for American States Financial Corporation in 1996. Lincoln Financial established Lincoln Life & Annuity in 1996. Lincoln Financial s Delaware Investments Voyageur Funds acquired The Clifton Group, Inter-Regional Financial Group, & Fortis Financial Group in 1996. 166

Lincoln Financial used proceeds from its 1997 sale of its property & casualty unit to buy Cigna s individual life and annuity unit. Cigna was acquired for $1.4 billion. This purchase helps Lincoln focus more on its core areas. Lincoln Financial acquired Voyageur mutual funds in 1997. Lincoln Financial reorganized itself, moving into investment products and reducing its focus on volatile units such as property & casualty, reinsurance, and workers compensation. Lincoln National introduced its new name, Lincoln Financial Group, in 1998 to increase its recognition as a financial services company. 95% of financial intermediaries familiar with brand and 60% of target market recognize the name. Lincoln Financial s Jefferson Pilot launched its CPA security program in 2000. Program includes 30 CPA firms (78 CPAs) and 93 Jefferson Pilot agents are members. The program provides eight different partnering options, from informal referrals to becoming your own B/D. Provides indemnity agreement arising from offering financial services as long as CPA firm does not directly solicit securities business. The program offers immediate vesting and contractually guarantees that the CPA owns the client relationship and access to all client records. CPAs have to get licensed if they work in conjunction with the insurance agent on cases. Insurance agents who participate in the program are trained how to work with CPAs. Program was specifically founded to increase insurance revenues for the firm; investments revenues are minimal focus. CPA firms are recruited by agents as opposed to from a corporate level; program just provides an infrastructure for participating agents. The program is led by the Program Director, Randy Maken. Lincoln Financial formed an alliance with SEI to underwrite and administer a variable annuity product in 2000. Lincoln Financial acquired the Administrative Management Group in 2002. Lincoln Financial also sold London-based international investment unit, Delaware International Advisors ltd (DIAL) in 2004. Received $180.9 million in cash for sale. DIAL has been renamed Mondria and continues to provide services for Investment Management division. Lincoln Financial acquired the 34 th largest life insurance company, Jefferson Pilot financial in 2005. This will enable Lincoln to grow significantly within the life insurance and retirement income industries. Lincoln Financial s Jefferson Pilot financial acquired Chubb Life Insurance Company and the guarantee life companies. Lincoln Financial Group is considering rebranding and restructuring the Lincoln Lifelong Institute, the firm s one-year old retirement research arm. Firm officials believe the institute is not reaching its potential and wants to reposition the group to do more yearround research studies, including becoming more web-based and providing investors with articles and white papers. 167

Lincoln Financial Group is attempting to become a leader in the personal finance sector focusing on upper income individuals. In the past, Lincoln was known as a solid but slow-growth life insurer; now it seeks to transform itself from a traditional insurance company into a financial services company with a focus on asset management. Gave Lincoln s network of planners a stronger array of wealth management and protection product. Lincoln Financial Group was believed to be a possible takeover candidate. Lincoln Financial Group s Jefferson Pilot exited the group medical business. Lincoln Financial Group is one of the top insurance companies, including in life insurance and variable annuities. Statistics The second section of Lincoln Financial Group s profile will review some key statistics regarding the firm. Lincoln Financial Group has over 10,000 employees, a 100% increase since 2004 due to Jefferson Pilot acquisition. Lincoln Financial Group s insurance in force is over $500 billion, a number that is fast growing due to Jefferson Pilot acquisition. Lincoln Financial Group s Insurance in Force is Over $500 Billion, a Number that is Fast Growing Due to Jefferson Pilot Acquisition Lincoln Financial Group Life Insurance In Force ($ Billions) Lincoln Financial Group generates over half of its insurance in force through universal life & other insurance. Specifically, 53% through universal life & other insurance. $254 $281 $298 $317 $501 Lincoln Financial Group has $245 billion assets under management, up significantly from 2002 due to Jefferson Pilot acquisition. 2002 2003 2004 2005 2006 Source: 3/1/07 Lincoln Financial Annual Report; 7/18/05 Lincoln Financial Group Web Site; Tiburon Research & Analysis Lincoln Financial Group s assets under management are over two-thirds advised by its investment management segment. Specifically, 70% are advised by the investment management segment. Lincoln Financial Group generates revenues of over $9 billion, flat over the last few years, but up significantly with acquisition of Jefferson Pilot. Lincoln Financial Group s revenues are nearly three-quarters generated by its retirement and life insurance business units. Lincoln Financial Group s net income is now over $1.3 billion, a significant increase since a sharp drop in 2002. 168

Lincoln Financial Group prides its business on three pillars it builds upon, including product excellence, power of the brand, and distribution reach. Lincoln Financial Group focuses its branding efforts on two primary target audiences, including financial intermediaries and affluent consumers. Lincoln Financial Group is conducting an aggressive ad campaign, aimed at both consumers and financial services professionals; in both focusing not focusing on insurance. Lincoln Financial Group advertises its businesses in five units, including retirement, investments, financial planning, life insurance, and retirement income. Businesses The third section of Lincoln Financial Group s profile will outline its core businesses. Lincoln Financial Group divides its business into five units, including Lincoln retirement, life insurance, investment management, other operations, and Lincoln UK. Lincoln Financial Group s first business division which provides tax-deferred investment growth and lifetime income opportunities through fixed and variable annuities is Lincoln Retirement. The division is based in Fort Wayne, IN and Hartford, CT. Lincoln Retirement provides tax-deferred investment growth and lifetime income opportunities through fixed and variable annuities. Division has $9.0 billion annuities deposits, $2.1 billion revenues and $415 million net income. Lincoln Financial Group s Lincoln retirement revenues remain flat around $2 billion. Lincoln Financial Group s Lincoln retirement generated over $400 million in net income up over 125% from 2002. Lincoln Financial Group s Lincoln retirement business runs two main product lines, including individual annuities and employer-sponsored markets. Lincoln Financial Group Lincoln retirement revenues are nearly three-quarters generated through individual annuities. Lincoln Financial Group Lincoln retirement revenues are nearly 90% generated through variable annuities. Lincoln Financial Group s second line of business is its life insurance division operating under the name of Lincoln National Life Insurance Company and offers universal life, variable universal life, and interest-sensitive whole life, term insurance, and corporateowned universal and variable universal life. The company is based in Hartford, Connecticut and offers universal life, variable universal life, and interest-sensitive whole life, term insurance, and corporate-owned universal and variable universal life insurance. Lincoln National Life has $305 billion life insurance in force, generates $2 billion revenues, and $280 million net income. The average first year premiums paid per policy sold are $29,600. Company targets households with at least $1 million of investable net worth. The company is Lincoln Financial Group s flagship affiliate. 169

Lincoln Financial Group s life insurance in force is in over half of term life products. Lincoln Financial Group s insurance division revenues remain flat around $2 billion. Lincoln Financial Group s insurance division net income also remains relatively flat around just under $300 million. Lincoln Financial Group s subsidiary is Jefferson Pilot Financial. Jefferson Pilot was founded in 1903 and is based in Greensboro, NC. The firm has $21 billion in assets and is led by its CEO, Dennis Glass. Lincoln Financial Group s Subsidiary is Jefferson Pilot Financial Comments Founded in 1903 Based in Greensboro, NC $21 billion in assets CEO: Dennis Glass Web site: www.jpfnet.com Lincoln Financial Group s Jefferson Pilot financial primarily relies on third-party distribution. Lincoln Financial Group s Jefferson Pilot Securities was founded in 1969 and is based in Concord, NH. The group is led by its CEO, David Booth. Source: 11/26/04 Jefferson Pilot Web Site; 7/27/01 Jefferson Pilot B rochures; 7/19/01 American B anker; 7/5/01 Brinker Capital B rochure; 7/2/01 Barron s; 5/23/01 Wall Street Journal ; 4/10/01 New Y ork Times; 2/19/01 Barron s; 12/26/00 Wal l Street Journal; 12/23/00 Jefferson Pilot Letter; 11/22/00 Jefferson P ilot Financial Web Site; 5/00 Jefferson Pilot Brochure; Tiburon Research & Analysis Lincoln Financial Group s Jefferson Pilot Securities has nearly 90 corporate office employees, which has been consistent since 2001. Lincoln Financial Group s Jefferson Pilot Securities has more than 450 rep offices, which is down slightly since 2001. Lincoln Financial Group s Jefferson Pilot Securities has more than 2,000 reps, which have decreased more than 10% since 2001. Lincoln Financial Group s Jefferson Pilot Securities has more than four reps per office, which is down slightly since 2001. Lincoln Financial Group s Jefferson Pilot Securities reps are 10% OSJ managers, which has been consistent since 2001. Lincoln Financial Group s Jefferson Pilot Securities reps that have series 7 licenses account for one-half of reps, which has increased slightly since 2001. Lincoln Financial Group s Jefferson Pilot Securities has more than 250 reps produce more than $100,000 per year, which has increased slightly since 2001. Lincoln Financial Group s Jefferson Pilot Securities reps that produce more than $100,000 per year account for more than 10% of reps, which has increased slightly since 2001. 170

Lincoln Financial s Jefferson Pilot Securities has more than 40,000 client accounts, which have grown more than 30% 2001. Lincoln Financial s Jefferson Pilot Securities has more than twenty client accounts per rep, which has nearly doubled since 2001. Lincoln Financial s Jefferson Pilot Securities has nearly $4 billion assets under administration, which has grown steadily since 2002. Lincoln Financial s Jefferson Pilot Securities has nearly $2 million assets under administration per rep, which has increased steadily since 2002. Lincoln Financial s Jefferson Pilot Securities generates more than $165 million in annual revenues, which has grown slowly since 2001. Lincoln Financial s Jefferson Pilot Securities generates more than $80,000 in annual revenues per rep, which is up more than 30% since 2001. Lincoln Financial s Jefferson Pilot Securities generates more than three-quarters of its revenues from commissions, which has been consistent since 2001. Lincoln Financial s Jefferson Pilot Securities generates more than 4.25% return on assets, which is down from more than 5.75% in 2001. Lincoln Financial s Jefferson Pilot Securities has increased its net income since 2001. Lincoln Financial s Jefferson Pilot Securities has decreased its long-term debt since 2001. Lincoln Financial s Jefferson Pilot Securities has increased shareholders equity. Lincoln Financial s Jefferson Pilot Securities has $10 million net excess capital, which is down slightly since 2001. Lincoln Financial s Jefferson Pilot Securities reps invest client assets in a wide variety of products. Specifically, 40% are invested in mutual funds, 30% in annuities, 20% in feeaccounts, and 10% in individual securities and other products. Lincoln Financial s Jefferson Pilot Securities mutual funds and annuities account for more than half of revenues, which fee-accounts share of revenues has doubled since 2001. Lincoln Financial s Jefferson Pilot Securities offers mutual funds from various mutual fund families. Lincoln Financial s Jefferson Pilot Securities offers mutual funds. Lincoln Financial s Jefferson Pilot Securities offers proprietary mutual funds. Lincoln Financial s Jefferson Pilot Securities has mutual fund assets. 171

Lincoln Financial s Jefferson Pilot Securities has nearly $50 million in mutual fund sales, which have grown slightly since 2001. Lincoln Financial s Jefferson Pilot Securities has relationships with variable & fixed annuity providers. Lincoln Financial s Jefferson Pilot Securities offers variable & fixed annuities. Lincoln Financial s Jefferson Pilot Securities has variable & fixed annuity assets. Lincoln Financial s Jefferson Pilot Securities offers proprietary variable & fixed annuities. Lincoln Financial s Jefferson Pilot Securities has more than $40 million in variable & fixed annuity sales, which have increased 50% since 2001. Lincoln Financial s Jefferson Pilot Securities has fee-accounts. Lincoln Financial s Jefferson Pilot Securities has $2.5 billion in fee-account assets, which are up significantly since 2001. Lincoln Financial s Jefferson Pilot Securities has $20 million in fee-accounts sales, which have doubled since 2001. Lincoln Financial s Jefferson Pilot Securities reps utilize one-quarter of fee-accounts, which has been steadily increasing since 2001. Lincoln Financial s Jefferson Pilot Securities has fee-account programs. Lincoln Financial s Jefferson Pilot Securities offers separately managed account program. Lincoln Financial s Jefferson Pilot Securities offers multiple style portfolio program. Lincoln Financial s Jefferson Pilot Securities offers unified managed account program. Lincoln Financial s Jefferson Pilot Securities offers mutual fund wrap account program. Lincoln Financial s Jefferson Pilot Securities offers broker wrap account program. Lincoln Financial s Jefferson Pilot Securities offers fee-based brokerage account program. Lincoln Financial s Jefferson Pilot Securities provides guidelines for discounting on its program. Lincoln Financial s Jefferson Pilot Securities RIA policy is standard. Lincoln Financial s Jefferson Pilot Securities reps less than 10% provide services through their own RIA, which has remained consistent since 2001. Lincoln Financial s Jefferson Pilot Securities offers a selection of individual securities. 172

Lincoln Financial s Jefferson Pilot Securities clears through Pershing. Lincoln Financial s Jefferson Pilot Securities has IPO access. Lincoln Financial s Jefferson Pilot Securities offers individual securities research. Lincoln Financial s Jefferson Pilot Securities offers mutual funds research. Lincoln Financial s Jefferson Pilot Securities individual securities commission schedule varies. Lincoln Financial s Jefferson Pilot Securities offers life insurance offerings. Lincoln Financial s Jefferson Pilot Securities offers proprietary life insurance offerings. Lincoln Financial s Jefferson Pilot Securities has policies regarding outside direct insurance sales. Lincoln Financial s Jefferson Pilot Securities offers long-term care & disability insurance. Lincoln Financial s Jefferson Pilot Securities has expanded its alternative investments offerings to include hedge funds & managed futures, venture capital & private equity, real estate, and other alternative investments. Lincoln Financial s Jefferson Pilot Securities also offers other products & services. Offerings include UITs, Limited Partnerships, CDs, and other products. Lincoln Financial s Jefferson Pilot Securities payout grid for mutual funds, annuities, life & other insurance products, individual securities, alternative investments, and other products & services includes payouts as high as 94%. Lincoln Financial s Jefferson Pilot Securities fee-account administration fees are average. Lincoln Financial s Jefferson Pilot Securities transaction fees and/or ticket charges are average. Lincoln Financial s Jefferson Pilot Securities rep fees are average. Lincoln Financial s Jefferson Pilot Securities customer service is average. Lincoln Financial s Jefferson Pilot Securities operations departments include licensing, new accounts, account transfers, and legal & compliance. Lincoln Financial s Jefferson Pilot Securities product support includes mutual funds, annuities, fee-accounts, and life & other insurance products. Lincoln Financial s Jefferson Pilot Securities sales & marketing support includes ads, newsletters, brochures, and direct mailings. 173

Lincoln Financial s Jefferson Pilot Securities business building support includes start-up, marketing, staffing & compensation, benchmarking, and succession planning. Lincoln Financial s Jefferson Pilot Securities technology offerings include new client sales, calculators, financial planning, asset allocation, and stock quotes. Lincoln Financial s Jefferson Pilot Securities offers top producers trips, annual conferences, & regional meetings. Lincoln Financial s Jefferson Pilot Securities offers online training & other self-study offerings. Lincoln Financial Group s Jefferson Pilot is an investor in Highland Capital. Lincoln Financial Group subsidiary first Penn-Pacific Life Insurance Company is based in Schaumburg, IL. Lincoln Financial Group s third business unit its investment management unit, Delaware Management Holdings, traditionally referred to as Delaware Investments. The unit is based in Philadelphia, PA. Delaware Investments has $101 billion assets under management and $34 billion retail assets under management. The firm generates $535 million revenues and $44 million net income. Delaware Investments provides investment products and services Investment advisor to 200 institutional accounts and is an investment manager for 92 open-end funds and 10 closed-end funds. The firm offers 80 retail mutual funds and is focuses on style specific research. Lincoln Financial s Delaware Investments floated a substantial national advertising campaign promoting its mutual funds to reps as a solid part of Lincoln Financial s product menu. Attempts to tie Delaware Investments to quality of other Lincoln Financial Network products such as annuities, life insurance, retirement plans, and fee-accounts. Promotes that Delaware Investments has been part of Lincoln Financial for 10 years and claims that funds focus on performance, research, and client service. Follows with short descriptions of a handful of 4- and 5-star Morningstar rated Delaware funds. Lincoln Financial Group s investment management provides investment products & services to 200 institutional accounts. Lincoln Financial Group s investment management serves as investment manager for over 100 mutual funds. Lincoln Financial Group investment management funds managed, over 90% are openend. Lincoln Financial Group s investment management also offers 80 retail mutual funds. Lincoln Financial Group s investment management division has over $100 billion in assets under management, down slightly from 2003. Lincoln Financial Group s investment management division has over $30 billion in retail assets under management. 174

Lincoln Financial Group investment management s one-third of assets under management are in mutual funds. Lincoln Financial Group s investment management division generates over $500 million, up a quarter in recent years. Lincoln Financial Group s investment management division generates over $40 million in net income, up hugely from 2002. Lincoln Financial Group s next business unit, other operations, focuses on product distribution and includes Lincoln Financial distributors and Lincoln Financial Advisors. The unit generates $852 million revenues and -$57.2 net income. Lincoln Financial Group s other operations division generates over $700 million in revenues, up nearly 30% from 2003. Lincoln Financial Group s other operations division consistently has a negative net income. Lincoln Financial Group divides its other operations unit into Lincoln Financial distributors, Lincoln Financial Advisors, and other. Lincoln Financial Group Divides its Other Operations Unit Into Lincoln Financial Distributors, Lincoln Financial Advisors, and Other Lincoln Financial Group Other Operations Business Units Lincoln Financial Distributors is the wholesale distribution organization for Lincoln Financial Group. Lincoln Financial is headquartered in Philadelphia, PA and generates $245 million revenues. The firm markets and sells Lincolnmanufactured variable and fixed annuities, life insurance and Note: Lincoln Financial Distributors (LFD) Other Operations Lincoln Financial Advisors (LFA) investment management products through the following intermediary distribution channels: wirehouses and regional broker/dealers, marketing general agents, independent planners, bank reps and corporate specialty brokers. Lincoln Financial Group s Lincoln Financial distributors generates nearly $250 in revenues, up almost 100% in the past two years. Lincoln Financial Group s Lincoln Financial distributors sell Lincoln-manufactured annuities, life insurance, and investment management products. Lincoln Financial distributors has six channels of distribution including wirehouses, regional broker/dealers, marketing general agents, independent planners, bank reps, and corporate specialty brokers. Lincoln Financial distributors top 25 distribution relationships are responsible for threequarters of sales. Other Besides LFD and LFA, Other includes operations that aren t directly related to business segments, unallocated corporate items, and amortization of deferred gain on the reinsurance portion of the transaction with Swiss Re Source: 7/18/05 Lincoln Financial Group Web Site; Tiburon Research & Analysis 175

Lincoln Financial Advisors is Lincoln Financial Group s non-captive retail distribution unit. The firm is based in Hartford, CT and has 68 offices with 1,414 field support staff. Lincoln Financial Advisors has 2,879 reps and 4,657 associates. The firm charges $2,500 as the average planning fee and generates $384 million revenues. Lincoln Financial Advisors targets HNW clients, affluent individuals, and small, closely held corporations or family businesses. The firm is fee-based, but not fee-only. Lincoln Financial Advisors utilizes both proprietary and TAMP fee programs, including Sagemark Consulting. Lincoln Financial Advisors went through various growth phases. Lincoln Financial Advisors has created a culture centered around their serve first philosophy. Tagline: service first, last, & always. Lincoln Financial Advisors CEO Robert Dineen has implemented many changes since his arrival, most recently with layoffs and operational streamlining, and expects changes to be complete by third quarter 2006. Lincoln Financial Advisors offices affected by layoffs lost three-quarters of its staff in their sales and marketing areas. Lincoln Financial advisor reps & industry recruiters are questioning the cutback in services, particularly in marketing, while the firm promotes four areas of excellence. The four areas include: planning design and support, training, field leadership, and technology. Lincoln Financial Advisors has only 250 corporate office employees, which is down from more than 300 in 2001. Lincoln Financial Advisors has more than 100 rep offices, down more than 15% since 2001. Lincoln Financial Advisors has more than 3,500 reps, which is up more than 10% since 2001. Lincoln Financial Advisors has more than thirty reps per office, which is more typical of a captive model than an independent model. Lincoln Financial Advisors reps are very few OSJ managers, which has remained consistent since 2001. Lincoln Financial reps are half series 7 licensed, with the share of reps who have series 7 licenses has been slowly increasing in recent years. Lincoln Financial Advisors over 75% are either have or are pursuing professional designation. Lincoln Financial Advisors has more than 400 reps produce more than $100,000 per year, which has been consistent since 2001. 176

Lincoln Financial reps produce less than 15% produce $100,000 per year, possibly due to their focus on insurance products rather than investment products. Lincoln Financial Advisors top ten reps median production is over $1.5 million. Lincoln Financial Advisors rep production requirements are average. Lincoln Financial Advisors reps are half recruited from wirehouses, with the other half coming from independent broker/dealers. Lincoln Financial Advisors CEO Robert Dineen has stated that despite worries regarding the firm s restructuring, it has lost only 5% of top financial planners, reportedly less than expected. Lincoln Financial Advisors lost two of its top financial advisors in the summer of 2005 to Securities America. The two advisors are Lori Resnik and William Glubiak. Lincoln Financial Advisors has nearly 150,000 client accounts, which is an increase of more than 25% since 2001. Lincoln Financial Advisors has less than 50 accounts per rep, indicating much of its revenues may be generated from insurance products. Lincoln Financial Advisors has more than $10 billion assets under administration, which have increased significantly since 2001. Lincoln Financial Advisors has less than $5 million assets under management per rep, which is up more than 30% since 2001 but down slightly from 2001. Lincoln Financial Advisors clients nearly two-thirds assets are assets under management, indication fee-accounts may be a significant portion of its business. Lincoln Financial Advisors revenues have grown in recent years after dropping more than 10% between 2001 and 2003. Lincoln Financial Advisors reps generate nearly $175,000 revenues, which is down from more than $225,000 in 2002. Lincoln Financial Advisors generates more than three-quarters of its revenues from commission products, specifically insurance products. Lincoln Financial Advisors return on assets has steadily decreased since 2001, although it is still greater than 5.50%. Lincoln Financial Advisors has increased its net income since 2001. Lincoln Financial Advisors has decreased its long-term debt since 2001. Lincoln Financial Advisors has increased its shareholders equity. 177

Lincoln Financial Advisors has $12 million net excess capital, which has decreased significantly since 2001. Lincoln Financial Advisors reps invest client assets in a wide variety of products. Lincoln Financial Advisors mutual funds and annuities account for two-thirds of revenues, which has been consistent since 2001. Lincoln Financial Advisors offers mutual funds from a variety of mutual fund families. Lincoln Financial Advisors offers mutual funds. Lincoln Financial Advisors offers proprietary mutual funds. Lincoln Financial Advisors has in mutual fund assets. Lincoln Financial Advisors has more than $70 million in mutual fund sales, which have been flat since 2001. Lincoln Financial Advisors has relationships with variable & fixed annuity providers. Lincoln Financial Advisors offers variable & fixed annuities. Lincoln Financial Advisors has variable & fixed annuity assets. Lincoln Financial Advisors offers proprietary variable & fixed annuities. Lincoln Financial Advisors has more than $150 million in variable & fixed annuity sales, which have been fairly flat since 2001. Lincoln Financial Advisors has fee-accounts. Lincoln Financial Advisors has nearly $8 billion in fee-account assets, which have nearly doubled since 2001. Lincoln Financial Advisors has $90 million in fee-accounts sales, which have grown 25% since 2001. Lincoln Financial Advisors reps utilize nearly half of fee-accounts, which has steadily increased since 2001. Lincoln Financial Advisors is going a step further to design high net worth services for financial advisors. Combines access to separately managed accounts, alternative investments, and portfolio management resources. The proprietary wealth management systems was released in 2003. Lincoln Financial Advisors has done the best job amongst the insurance companies of putting together a high-end advisory model according to some industry executives. Lincoln Financial Advisors and Sagemark consulting host a recruiting meeting revolving around building a fee-based business with asset management programs. Speakers 178

include Anne Machesky and Nasser Ali Presented via teleconferencing at all Lincoln offices or on own computer. Lincoln Financial Advisors has been in the fee-based investing business since 1982, and still view it as a growing segment. Lincoln executives feel they have been successful and believe its agents really understand the value of recurring income. Lincoln Financial Advisors conducts business primarily through third-parties like Brinker Capital, FundQuest, Independent Portfolio Consultants, and SEI Investments. Lincoln Financial Advisors fee-based assets out number its brokerage assets two-to-one Lincoln Financial Advisors has a comprehensive fee-accounts offering, including multiple TAMPs. Lincoln Financial Advisors offers separately managed accounts through several partnerships utilizing over 50 money managers. Lincoln Financial Advisors offers a separately managed account program called core asset manager through Brinker Capital. This is a traditional separately managed account program. Lincoln Financial Advisors also offers a separately managed account program through Fundquest called Lincoln Premier Manager. This is a traditional separately managed account program. Lincoln Financial Advisors separately managed account program called Lincoln managed assets is offered through independent portfolio consultants. Traditional separately managed account requires $1 million account minimum and has $1.5 billion in assets. The program was started over ten years ago. Lincoln Financial Advisors Lincoln managed assets program through independent portfolio consultants offers access to money managers, including recently added Rothschild. Lincoln Financial Advisors final separately managed account program is offered through SEI investments. Traditional separately managed account with $1.5 billion assets when combined with SEI s mutual fund wrap account. Lincoln Financial Advisors has a unified managed account platform called Lincsolutions. This is a Traditional unified managed account. Lincoln Financial s LincSolutions which has three key components, including account aggregation, an enhanced planning tool, and a unified managed account platform. Lincoln Financial Advisors offers an internally-built mutual fund wrap account called Lincoln Premier Plus. Traditional mutual fund wrap account with access to 3,000 mutual funds. Requires $100,000 minimum and has $1.5 billion assets under management. Premier Plus clears through Fidelity. Lincoln Financial Advisors Lincoln premier plus program has over $1.5 billion in assets under management. 179

Lincoln Financial Advisors offers another mutual fund wrap account through a partnership with SEI investments. Mutual Fund Wrap account offers $1.5 billion in assets when combined with SEI s separately managed account. Lincoln Financial Advisors have three variations of its fee-based brokerage account. The variations include basic account, brokerage portfolio, and brokerage access gold account. Lincoln Financial Advisors offers a basic fee-based brokerage account. This is a traditional fee-based brokerage account. Lincoln Financial Advisors also offers a fee-based brokerage account with cash management features called brokerage portfolio. Traditional fee-based brokerage account with unlimited check writing, VISA Gold debit/atm card, bill payment service, and performance reporting. Lincoln Financial Advisors brokerage portfolio account is similar to its final fee-based brokerage account called brokerage access gold account. Traditional fee-based brokerage account with unlimited check writing, VISA Gold debit/atm card and margin account borrowing. Lincoln Financial Advisors provides guidelines for pricing its fee-account program. Lincoln Financial Advisors RIA policy is standard. Lincoln Financial Advisors reps provide services through their own RIA account for very few, which has been consistent since 2001. Lincoln Financial Advisors offers a selection of individual securities. Offering includes stocks and bonds. Lincoln Financial Advisors clears through NFS. Lincoln Financial Advisors partners with Bisys for insurance offerings. Lincoln Financial Advisors offers four basic types of financial planning. Offering includes estate planning, business succession planning, investment planning, and retirement planning. Lincoln Financial Advisors offers a six-step financial planning process. Process includes concept interview, comprehensive data gathering, plan design, formal plan presentation, implementation, and review & service. Lincoln Financial Advisors average financial planning fee is $2,500. Lincoln Financial Group partnerships include Morgan Stanley and Smith Barney. Lincoln Financial also uses other third parties for distribution. Network includes 75,000 stockbrokers and financial planners. Securities also distributed by other broker/dealer 180

with effective selling agreements. Stockbrokers are the firm s top distribution channel but banks and independent financial planners are its fastest growing channels. Lincoln Financial advisor reps use over 75,000 stockbrokers and financial planners. Lincoln Financial has an exclusive alliance with BDO Seidman to provide BDO Seidman s clients financial and estate planning. Lincoln Financial created LFA Alliance Solutions in 1998 because of the partnership with BDO Seidman; needed to create an infrastructure where CPAs could work with LFA advisors. Prior to the program s establishment, advisors only had informal relationships with CPAs. LFA Advisors provide a variety of services to BDO Seidman clients including investment planning, estate planning, and financial planning. Lincoln Financial partner CPAs receive between 25% and 50% of commissions; arrangements are worked out between advisors and CPAs and vary based on the CPA s involvement. Lincoln Financial s partner CPAs can t use any other referral programs if CPAs want to split commissions. CPA that is a registered rep and hangs his/her license with LFA cannot participate in any other referral program. Lincoln Financial s partner CPA retains ownership of clients in Lincoln Financial Advisors program. Advisors understand that the ultimate ownership of the client remains with the CPA and they protect CPA s relationship with the client. CPA can be involved in the investments relationship as much as they want to be. Lincoln Financial Advisors offers a number of retirement products for business owners, including 401ks, profit sharing, money-purchase, SEP & SIMPLE, and ESOP. Lincoln Financial Advisors offers 529 plans for clients saving for education. Program offers access to over 15 sponsors. Lincoln Financial Advisors provides reps with stock options, 401K plans, pensions, FICA matching, and medical benefits in addition to traditional payouts. Lincoln Financial restructured its payouts to push costs to the reps, making it look more like an independent broker/dealer than an insurance broker/dealer. Lincoln Financial believes they might lose a number of financial advisors. Lincoln Financial Advisors customer service is average. Lincoln Financial Advisors operations departments include licensing, new accounts, account transfers, and legal & compliance. Lincoln Financial Advisors conducts annual audits of each office to ensure compliance with regulators and to provide practice management support. Lincoln Financial Advisors product support includes mutual funds, annuities, feeaccounts, and life & other insurance products. 181

Lincoln Financial Advisors has had a history of fee-based investing, primarily through third-parties like independent portfolio consultants, Brinker, & SEI. Comments include: We ve been in the fee-based investing business for a very long time, since about 1982. Our agents really understand the value of recurring income, and because of this our fee-based assets out number our brokerage assets about two to one. I d say we ve been very successful. We essentially have four core products that we offer to our clients. First, is the Lincoln Premier Plus, which is an internally built mutual fund wrap account, with about $1.5 billion in assets. We are about to introduce Lincoln Premier Manager, which is going to be built by FundQuest, which will be a separately managed account program. The second core product is the Lincoln Managed Assets program, which has about $1.5 billion in assets, this is a separately managed account program that has been around for ten years, it is done by Independent Portfolio Consultants Portfolio Services. The third program we offer is through SEI, both their mutual fund wrap and their separately managed account program, and together they have about $1.5 billion in assets from us. The last program we offer is from Brinker, their Core Asset Manager program, their Symphony program, and they are in the process of building another managed account program that our agents will use Lots of selling agreements with Brinker, Lockwood, SEI, etc.. Want help in training and education We look at this as a growing segment Added Rothschild as a manager to its Independent Portfolio Consultants program; program has a $1 million minimum Lincoln Financial Advisors is going a step further to design high net worth services for financial advisors. Program combines access to separately managed accounts, alternative investments, and portfolio management resources. The proprietary wealth management systems was to be released in 2003. Duplicated mutual fund wrap account and separate account wrap services previously outsourced to SEI, Independent Portfolio Consultants, Brinker, and FundQuest. Guides advisors through the process with technology. The Technology vendor is unknown. Requirements include $100,000 minimum and initially intends to retain the third-party programs. Lincoln clears at Fidelity. Lincoln Financial Advisors recently launched a unified managed account platform called Lincsolutions which has three key components. Components include: Account Aggregation, Enhanced Planning Tool, and UMA Platform. Lincoln Financial Advisors sales & marketing support includes ads, newsletters, brochures, and direct mailings. Lincoln Financial Advisors business building support includes start-up, marketing, staffing & compensation, benchmarking, and succession planning. Lincoln Financial Advisors also provides five other turnkey business building programs, including full service brokerage, college planning, and sports & entertainment marketing. Lincoln Financial advisor s CPA program, Solutions Linc, provides a business building solution with substantial amounts of flexibility. The program formed in 1999 was designed to assist advisors in the field develop relationships with CPAs. Program does not market to CPAs on a corporate level, the Individual advisors are simply provided an 182

infrastructure to establish a relationship with CPAs. Level of licensing is determined by the CPA; there are no mandates and no minimum production requirements; considering issue right now due to fear of CPAs parking licenses. The program is based on the concept of assisted sales and since most CPAs can t commit the time to become experts at financial planning; it is easier to bring in someone who has the proficiency. CPAs act as consultants to the client. The program is run by the Program Director Gary Shimmin. Lincoln Financial programs has CPAs deciding the level of licensing to acquire depending on the products on which they want to earn compensation. There are three levels including: becoming solicitor for fee products, becoming licensed for securities, and becoming licensed for insurance sales. Goals include: increasing capacity of practice, creating consistently positive client experience, and creating a predictable and professional environment. Lincoln Financial Advisors office of practice management was created to achieve three chief goals. Lincoln Financial Advisors office of practice management offers reps five key services. Services include: strategic practice planning, staffing solutions, market development, VIP client management, and operations solutions. Lincoln Financial Advisors has established a regional support program called the model office providing several support personnel. Program includes regional CEO, director of financial planning, director of investments, director of professional development, compliance director, and new business coordinator. Lincoln Financial Advisors provides a seven-step professional development training program. Program includes basic training, transition advisor training, advanced training, and focused growth retreats. Lincoln Financial Advisors training model offers six key elements, including audio & video training, reimbursement, resource groups, seminars, video linc, and web conferencing. Lincoln Financial Advisors offers many business building and practice management training seminars. Examples include: the care, feed, & development of a $1 million practice; five steps to forming strategic relationships with CPA Firms; staff to last; and building a fee-based business with asset management programs. Lincoln Financial Advisors offers a eight-tiered technology platform including advisor workbench, virtual resources, web sites, and video linc. Lincoln Financial Advisors provides a separate four-tiered financial planning software platform. Tiers include: financial condition model, client information management, competitive information, and planning & presentation reports. Lincoln Financial Advisors also provides a separate LincSolutions wealth management platform with three key resources. These include account aggregation, enhanced planning tools, managed account program detail. Lincoln Financial Advisors technology policies are standard. 183

Lincoln Financial Advisors technology support is average. Lincoln Financial Advisors LFA solutions linc provides several key advantages to CPAs. These include access to Lincoln brand, commission sharing, LFA errors & omissions coverage, LFA affiliation, and NASD registration. Lincoln Financial Advisors has also established a solutions linc program for both credit unions and banks. Places rep in branch office with access to full product line which adds additional revenue for bank or credit union. Lincoln Financial Advisors top producers trips, annual conferences, & regional meetings. Lincoln Financial Advisors has online training & other self-study offerings. Lincoln Financial Group s final business unit is Lincoln UK. Lincoln UK is based in Gloucester, England with 240 employees. Company has 528,000 customers and 1 million policies in force. Lincoln UK generates $342 revenues. Lincoln Financial Group s Lincoln UK division employs over 200 individuals. Lincoln Financial Group s Lincoln UK division has over 500,000 customers. Lincoln Financial Group s Lincoln UK has over one million life assurance, pension, unit trust, and ISA policies in force. Lincoln Financial Group s Lincoln UK has over $8 billion assets under management, up steadily in recent years. Lincoln Financial Group s Lincoln UK generates $342 million in revenues, up significantly since 2003. Lincoln Financial Group Lincoln UK s revenues generated from life products account nearly two-thirds of total products. Specifically 63% are generate through life products. Organization & Ownership The final section of Lincoln Financial Group s profile will address its organizational structure of ownership. Lincoln Financial Group web site offers investment education to prospective clients as well as an account login for current clients. Web site features include: home, my account, planning & education, products & performance, service center, tools, and about us. Lincoln Financial Advisors web site allows prospective clients to locate a Lincoln rep. Web site features include: our company, financial planning, product solutions, your account, and office/planner locator. Lincoln Financial s Jefferson Pilot Securities has a web site. 184

Lincoln Financial Group is led by CEO John Boscia. Other executives include: Jude Driscoll, CEO of Lincoln National Investment Companies & Delaware Investments; John Gotta, CEO of Lincoln Life & Annuity; Bob Dineen, CEO of Lincoln Financial Advisors, Westley Thompson, CEO of Lincoln Financial Distributors, and Frederick Crawford, Chief Financial Officer. Lincoln Financial s Jefferson Pilot Securities is led by David Booth. Lincoln Financial Advisors Management Team is led by Bob Dineen and includes Gary Dorfman. Bob Dineen is the CEO and Gary Dorfman is the Senior Vice President Investments & Financial Planning Services. Gary Dorfman was formerly with both Sanford Bernstein and Robertson Stephens (responsible for building Robertson Stephens Private Client Group). Lincoln Financial Group UK is Led by Michael Tallett-Williams. Lincoln Financial Group is publicly owned. Lincoln Financial Group has steadily increased their shareholders equity over recent years, up over 20% since 2000. Manulife Manulife was founded in 1887 as Manufacturers Life Insurance and is based in Toronto, Canada. The firm operates in 19 countries, has 12,600 employees, 3.0 million policy holders, $312 billion life insurance in force, $386 billion assets under management, $22.6 billion revenues, & $1.1 billion net income. The firm is led by its CEO Dominic D Alessandro and is a publicly traded company under the symbol MFC. Manulife Financial Comments Founded in 1887 Founded as Manufacturers Life Insurance Based in Toronto, Canada 19 countries 12,600 employees 3.0 million policy holders $312 billion life insurance in force $386 billion assets under management $22.6 billion revenues $1.1 billion net income CEO: Dominic D Alessandro Publicly traded company (Toronto & NYSE: MFC) Web sites: www.manulife.com, www.johnhancock.com, www.jhancock.com, www.jhannuities.com, www.jhfunds.com, www.jhsignature.com, and www.jhnetwork.com Source: 9/5/07 A merican B anker; 8/6/07 New Y ork Times; 8/07 Insight; 7/9/07 Insurance Newscast; 7/07 Insight; 7/07 Financial Advisor; 6/27/07 Insurance Newscast; 5/07 Financial Planning; 3/26/07 Investment News; 3/19/07 American Banker; 3/07 Registered Rep; 4/25/05 Manulife Web Site; 4/19/04 Manulife Brochure; 3/18/04 Financial Advisor; 12/15/03 Manulife Presentation (Brockelman); 9/30/03 Wall Street Journal; Tiburon Research & Analysis History The first section of Manulife s profile will explain the key historical events in the firm s development. Manulife was founded in 1887, went through a series of successful & unsuccessful acquisitions, before acquiring John Hancock in 2004 Businesses The second section of Manulife s profile will outline its core businesses. Manulife has at least three core businesses, including its Canadian operations, John Hancock subsidiary, and Asia & other international operations. 185

John Hancock Financial Network Manulife s John Hancock has three key distribution channels, including its Wood Logan and John Hancock Financial Network, as well as its Alliance with M Financial Group. Manulife s John Hancock also distributes through its own career agency, now called the John Hancock Financial Network. Manulife s John Hancock Financial Network has nearly 30 corporate office employees, which has been consistent since 2001. Manulife s John Hancock Financial Network has more than 75 rep offices, which has been consistent since 2001. Manulife s John Hancock Also Distributes Through its Own Career Agency, Now Called the John Hancock Financial Network Comments Based in Boston, MA 28 employees 78 offices 1,645 representatives 35,400 client accounts $2.5 billion assets under administration $178 million revenues CEO: Wendy Benson Web site: www.jhnetwork.com Source: 9/16/07 John Hancock Email (Cassato); 8/07 Insight; 12/22/04 John Hancock Financial Network Web S ite; 7/25/01 Insurance Letter; 7/19/01 S inator Conversation (Diamond); 7/12/01 American B anker; 7/5/01 Brinker Capital B rochure; 6/27/01 Run Money Conversation (Gregg); 2/01 F inancial Services Marketing; 11/6/00 CBS MarketWatch; 10/00 John Hancock; Tiburon Research & Analysis Manulife s John Hancock Financial Network has more than 1,600 reps, which is down from more than 2,000 in 2001. Manulife s John Hancock Financial Network has more than 20 reps per office, which is down from 28 reps per office in 2001. Manulife s John Hancock Financial Network s reps are less than 5% OSJ managers, which has been consistent since 2001. Manulife s John Hancock Financial Network reps three-quarters have Series 7 licenses, which has remained consistent since 2001. Manulife s John Hancock Financial Network has 180 reps that produce more than $100,000 per year, which is down from more than 200 reps since 2001. Manulife s John Hancock Financial Network Reps produce more than $100,000 per year very infrequently, which has been fairly consistent since 2001. Manulife s John Hancock Financial Network has more than 35,000 client accounts, which has grown steadily since 2001. Manulife s John Hancock Financial Network has more than 20 client accounts per rep, which has doubled since 2001. Manulife s John Hancock Financial Network has $2.5 billion assets under administration, which has grown steadily since 2001. Manulife s John Hancock Financial Network has $1.5 million assets under administration per rep, which has doubled since 2001. 186

Manulife s John Hancock Financial Network generates more than $175 million revenues, which is down from $250 million since 2001. Manulife s John Hancock Financial Network generates more than $100,000 in revenues per rep, which is down slightly since 2001. Manulife s John Hancock Financial Network generates more than three-quarters of its revenues from hourly & other revenues, which has been consistent since 2001. Manulife s John Hancock Financial Network has $5 million net excess capital, which has not changed since 2001. Manulife s John Hancock Financial Network s mutual funds and annuities account for nearly half of revenues, which has been consistent since 2001. Manulife s John Hancock Financial Network has $450 million in mutual fund assets. Manulife s John Hancock Financial Network sold $450 million in mutual funds in 2006. Manulife s John Hancock Financial Network has nearly $30 million in mutual fund revenues, which is down from $40 million in 2001. Manulife s John Hancock Financial Network offers John Hancock proprietary variable & fixed annuities. Manulife s John Hancock Financial Network sold $700 million in variable & fixed annuities in 2006. Manulife s John Hancock Financial Network has $30 million in variable & fixed annuity revenues, which has decreased from more than $40 million since 2001. Manulife s John Hancock Financial Network has $30 million in variable & fixed annuity revenues, which has decreased from more than $40 million since 2001. Manulife s John Hancock Financial Network believes that it has been successful at transitioning its reps to selling fee-accounts. Manulife s John Hancock Financial Network has more than $2 billion in fee-account assets, which is up significantly since 2001. Manulife s John Hancock Financial Network has $5 million in fee-accounts revenues, which is down from $8 million since 2001. Manulife s John Hancock Financial Network reps nearly half utilize fee-accounts, which has been steadily increasing since 2001. Manulife s John Hancock Financial Network offers four fee-account programs, including its Portfolio by Design, Elite Advisor Services, Brinker Capital, and Lockwood. Manulife s John Hancock Financial Network offers Brinker Capital s separately managed accounts program. 187

Manulife s John Hancock s Brinker Capital fee-account program receives favorable comments including: Length of Relationship We have had this relationship for a very long time, and it has been very good. We get a lot of support from them, they help us do a lot of training, and the overall relationship has been great Popularity As far as sales, behind our proprietary product it is clearly the second most popular, with quite substantial sales figures Manulife s John Hancock Financial Network also offers a Lockwood separately managed accounts program. Manulife s John Hancock s Lockwood fee-account program receives mixed comments. Accommodation We have a selling agreement with them. Really the only reason we offer their products is because we ve had a lot of big producers come over recently who have been offering Lockwood products at their previous broker/dealers. They have not been very successful at distributing their products through us, however, our reps sell very little Lockwood products Manulife s John Hancock Financial Network offers an Elite Advisor Services separately managed accounts program. Manulife s John Hancock Financial Network has $30 million in separately managed accounts program sales. Manulife s John Hancock s Elite Advisory Services fee-account program receives favorable comments including: Leading Product We just rolled that product out in 2000. I would say that the majority of our separately managed account sales are in this area currently Positioned for Separately Managed Account They are looking to get most separately managed account assets into the proprietary program Manulife s John Hancock Financial Network offers a portfolio by Design Mutual Fund Wrap Account Program. Manulife s John Hancock s Portfolio By Design fee-account program receives favorable comments including: Positioned as Mutual Fund Wrap Account We have created this product with FundQuest. Currently it only offers a mutual fund wrap account, but they are working on releasing a separately managed account offer soon. The mutual fund wrap account component has been extremely successful, our reps love it. I think when the separately managed account product comes out it will be quite successful because it will be integrated into the current piece, providing our reps with integrated statements, etc. 188

Manulife s John Hancock Financial Network reps more than 10% provide services through their own RIA, which has remained consistent since 2001. Manulife s John Hancock Financial Network clears through Fidelity Investment s National Financial. Manulife s John Hancock Financial Network offers life insurance offerings, including term life, fixed, whole, or traditional life, fixed universal life, variable life, & variable universal life. Manulife s John Hancock Financial Network offers extensive John Hancock Life Insurance Offerings, including term life, fixed universal life, variable life, and variable universal life. Manulife s John Hancock Financial Network offers John Hancock long-term care insurance. Manulife s John Hancock Financial Network has expanded its alternative investments offerings to include hedge funds & managed futures, venture capital & private equity, and real estate. Manulife s John Hancock Financial Network sells John Hancock s pension products. Manulife s John Hancock Financial Network transaction fees and/or ticket charges apply to mutual funds, annuities, fee-accounts, & individual securities. Manulife s John Hancock Financial Network rep fees include monthly administration, licensing & renewal, E&O or bond, education & training, and technology. Manulife s John Hancock Financial Network operations departments include licensing, new accounts, account transfers, and legal & compliance. Manulife s John Hancock Financial Network product support includes mutual funds, annuities, fee-accounts, and life & other insurance products. Manulife s John Hancock Financial Network sales & marketing support includes ads, newsletters, brochures, & direct mailings. Manulife s John Hancock Financial Network offers its True Alliance Program, which provides CPAs with access to a local network of financial advisors. Manulife s John Hancock Financial s True Alliance Program offers CPAs assistance in assessing potential, developing plans, identifying clients, developing stronger client relationship, and generating revenues. Organization & Ownership The final section of Manulife s profile will address its organizational structure of ownership. Manulife is led by its Chairman Arthur Sawchuck, CEO Dominic D Alessandro, and President David D Alessandro. 189

Manulife Subsidiary John Hancock is led by its CEO John DesPrez. Manulife s John Hancock Financial Network is led by Wendy Benson. Manulife s board of directors includes chairman Arthur Sawchuck and CEO Dominic D Alessandro. Manulife is a public company traded on both the Toronto Exchange and the NYSE as MFC. Manulife has a market capitalization of $26 billion. Mass Mutual Founded in 1851, Mass Mutual is based in Springfield, Massachusetts. It is the 25th largest life insurance company and 7 th largest mutual company. The firm has $7 billion sales and a strong brand recognition among retail customers. Mass Mutual annuities are strengthening their appeal to bank customers and reps with a commission that is significantly lower (and therefore cheaper), but which increases over time for the Panorama Passage Mass Mutual Financial Group Comments Founded in 1851 Based in Springfield, MA 27,000 employees 12.0 million clients $473 billion life insurance in force $456 billion assets under management $18.0 billion revenues $810 million net income CEO: Stu Reese Web sites: www.massmutual.com, www.oppenheimerfunds.com, www.oppretire.com, and www.transition10.com Source: 2/26/08 Wall Street Journal; 1/28/08 The Muni Center Email (Wagner); 12/3/07 Investment News; 11/24/07 Wall Street Journal; 10/30/07 Wall S treet Journal; 3/31/07 M ass Mutual A nnual Report; 6/13/05 Investment News; 6/13/05 Fund Marketing Alert; 5/12/05 M ass Mutual Web Site; 5/2/05 New York Times; 6/14/04 Oppenheimer Funds Web Site; 6/14/04 Mass Mutual Web Site; 5/17/04 Investment News; 4/15/02 Fortune; Tiburon Research & Analysis variable annuity. Mass Mutual Odyssey is another new annuity product, which pays investors a bonus 1% interest after the first year, and up to 10% of the annuity s value can be withdrawn annually without a surrender charge. Mass Mutual recently started a bank to retain 401k rollovers and life insurance payoffs and to offer fiduciary services. It has 5,000 sales reps and owns David L. Babson & Co. ($70 billion SAM) and Oppenheimer, Inc. Mass Mutual is headed by CEO Robert O Connell (formerly of AIG). History The first section of Mass Mutual s profile will explain the key historical events in the firm s development. Mass Mutual Financial Group was founded in 1851 and has evolved through three phases, including its early, middle, and recent phases. Businesses The second section of Mass Mutual s profile will outline its core businesses. Mass Mutual is organized into four businesses, including domestic insurance, Mass Mutual international, Retirement Services & Financial Products, and Asset Management. 190

Domestic Insurance Mass Mutual s Domestic Insurance Business is one of the Nation s most successful. It has $433 billion life insurance in force, $14.6 billion in annuity assets under management, and $11.7 billion in group insurance assets under management. There is strong brand recognition in the retail consumer market. Mass Mutual Organizes its Domestic Insurance Business Into Six Products, Including Life, Disability, and Other Lines Life Insurance Mass Mutual Domestic Insurance Businesses Annuities Long-Term Care Insurance Mass Mutua l Domestic Insurance Disability Income Insurance Large Corporate Markets Settlement Solutions Mass Mutual divides its Domestic Insurance Business into six products, including life, Source: 5/12/05 Mass Mutual Web Site; Tiburon Research & Analysis annuities, long-term care, disability income, Large Corporate Markets, and settlement solutions. Mass Mutual s domestic insurance businesses first business is life insurance. Mass Mutual s life insurance business generates nearly $4 billion in life insurance premiums. Mass Mutual s life insurance division has over $30 billion in assets under management. Mass Mutual s life insurance division has five lines of products, and twenty five products overall. Mass Mutual subsidiary CM Life Insurance sells life insurance and annuities to individuals and institutions. It is based in Hartford, CT and sells primarily flexible premium universal life insurance and variable annuity products. Mass Mutual subsidiary CM Life Insurance Company sells primarily flexible premium universal life insurance and variable annuity products. Mass Mutual subsidiary CM Life Insurance Company distributes through career agents, registered financial planners & brokers. Mass Mutual s Life Bridge program distributes life insurance to needy families at no cost. It has given away 3,000 policies, and $150 million life insurance in force. Mass Mutual also offers annuities, which draw in customers from banks and other investment firms with strong brand recognition among retail customers. Mass Mutual is strengthening its appeal to bank customers and reps with a commission that is significantly lower, and therefore chaper, but which increases over time for the panorama passage variable annuity. 191

Mass Mutual s Odyssey is another new annuity product, which pays investors a bonus 1% interest after the first year, and up to 10% of the annuity s value can be withdrawn annually without a surrender charge. Mass Mutual generates nearly $3 billion in annuity sales, up nearly 50% over the past year. Mass Mutual has nearly $15 billion in annuity assets under management, reflecting excellent growth since 2003. Mass Mutual long-term care insurance was launched in 2000. 1,100 of Mass Mutual s sales force earned the certified long-term care specialist. Mass Mutual has about onequarter of sales force certified as long-term care specialists. Mass Mutual disability income insurance is the third largest carrier in the individually owned disability income insurance market. It has $43 million sales and $394 million in premiums. Mass Mutual disability has exceeded $40 million in sales in back to back years. Mass Mutual Has About One-Quarter of its Sales Force Certified as Long-Term Care Specialists Mass Mutual Financial Representatives By Long-Term Care Certification Not Certified 76% Certified Long- Te rm Ca re Spe cial ist 24% Source: 5/12/05 Mass Mutual Web Site; Tiburon Research & Analysis Mass Mutual disability has about $400 million in premiums, up less than 10% since 2003. Mass Mutual s Large Corporate Markets division individually designs insurance products to meet clients needs. It has $55 billion insurance in force. It is made up of four groups, including bank-owned life insurance, corporate owned life insurance, executive carve out benefits, and private client group. There are $11.7 billion assets under management. Mass Mutual Large Corporate Markets has $55 billion of insurance in force. Mass Mutual Large Corporate Markets has over $10 billion assets under management. Mass Mutual s Large Corporate Markets division is a collection of four businesses, including bank-owned life insurance, corporate-owned life insurance, executive carveout benefits, and private client group. Mass Mutual s Large Corporate Markets division has eight client types, including accounting firms, high-net worth individuals, financial institutions, law partnerships, manufacturing corporations, marketing corporations, medical groups, and utilities. Mass Mutual Settlement Solutions is the final division of the company s Domestic Insurance Business. 192

Organization & Ownership The final section of Mass Mutual s profile will address its organizational structure of ownership. Mass Mutual organizes its web site offerings by consumer type. Mass Mutual is led by non-exectuive chairman James Birle and CEO Stuart Reese. New York Life New York Life was founded in 1845 and is based in New York, NY. The firm has 12,650 employees and 28,700 agents. New York Life boasts $702 billion life insurance in force, $265 billion assets under management, $2.9 billion in insurance slaes, $34.9 billion in investment sales, $21 billion revenues, $1.4 billion paid in dividends to policy holders, and $2.3 billion in net income. The firm is led by its CEO Sy Sternberg and is a mutual insurance company. New York Life Comments Founded in 1845 Based in New York, NY 12,650 employees 28,700 agents $702 billion life insurance in force $265 billion assets under management $2.9 billion in insurance sales $34.9 billion in investment sales $21 billion revenues $1.4 billion paid in dividends to policy holders $2.3 billion in net income CEO: Sy Sternberg Mutual insurance company Web site: www.newyorklife.com and www.nylim.com Source: 3/31/07 New York Life Annual Report; 7/26/05 New York Life Web Site; 6/16/05 New York Life Web Site; 5/11/05 New Y ork Life Web Site; 4/25/05 New Y ork Life Web Site; 12/31/04 New York Life A nnual Report; 8/20/01 Insurance Letter; 7/23/01 San Francisco Chronicle; 7/19/01 Am erican Banker; 7/8/01 New York Times; 7/5/01 Brinker Brochure; 7/2/01 Barron s; 6/18/01 Fund Marketing Alert; 12/25/00 New York Times; Tiburon Research & Analysis History The first section of New York Life s profile will explain the key historical events in the firm s development. New York Life was founded in 1845 and has evolved through three phases, including early, growth, and maturity phases. Businesses The second section of New York Life s profile will outline its core businesses. New York Life has four business divisions, including life & annuity, investment management, New York Life international, and special markets. New York Life distributes through captive agents and third-party agents. Life & Annuity New York Life s life & annuity business division is the company s largest. New York Life generates nearly $2 billion in annual life sales. New York Life has seen compounded annual growth rate in life insurance sales four times greater than the industry benchmark. New York Life offers four types of life insurance, from simple products such as term life to variable universal life. 193

New York Life generates over $5 billion in annuity sales, a number which has grown steadily in the past year. New York Life s half of annuity sales are transacted by its own sales force. New York Life offers four type of annuities, including fixed interest deferred, immediate income, special, and variable deferred annuities. New York Life is pushing annuities. New York Life s Half of Annuity Sales Are Transacted by Its Own Sales Force New York Life Annuity Sales by Sales Force Thi rd-party Distri butors 50% New York Life Age nts 50% Organization & Ownership The final section of New York Life s profile will address its organizational structure of ownership. Source: 5/11/05 New York Life Web Site; 12/31/04 New York Life Annual Report; Tiburon Research & Analysis New York Life s web site has five sections, including home, customer service, sales careers, corporate careers, and fund values. New York Life is led by CEO Sy Sternberg and president Frederick Sievert. Gary Wendlandt is CEO of New York Life Investment Management, Joseph Gilmour is CEO of New York Life International, Michael Sproule is the chief financial officer of New York Life, and Judith Campbell is the chief information officer. New York Life is owned by its policyholders. Northwestern Mutual Northwestern Mutual was founded in 1857 by John Johnston as Mutual Life Insurance Company of the State of Wisconsin. The firm is based in Milwaukee, WI and has 5,500 employees generating $21.4 billion revenues. Northwestern Mutual is led by its CEO Ed Zore and is a mutual company owned by its policy holders. Northwestern Mutual Comments Founded in 1857 Founded as Mutual Life Insurance Company of the State of Wisconsin Founded by John Johnston Based in Milwaukee, WI 5,500 employees $21.4 billion revenues CEO: Ed Zore Mutual company owned by policy holders Web sites: www.northwesternmutual.com, www.nmfn.com, www.letyourworriesgo.com, www.pipplc.com, www.toddorg.com, & www.russell.com History The first section of Northwestern Mutual s profile will explain the key historical events in the firm s development. Source: 12/18/08 Northwestern Mutual Web Site; 11/08 Financial Planning M agazine; 9/29/08 Fortune Magazine; 9/15/08 Forbes Magazine; 3/31/07 Northwestern Annual Report; 6/6/05 Forbes; 6/05 Food & Wine; 4/27/05 Northwestern Mutual Web S ite; 1/14/04 Northwestern M utual Web Site; 1/12/04 Fortune Magazine; 7/31/01 Run Money Conversation (Gregg); 7/19/01 American Banker; 7/8/01 New York Times; 7/2/01 Barron s; Tiburon Research & Analysis 194

Northwestern Mutual was founded in 1857 and has evolved through three phases, including its early years phase, growth years phase, and maturity phase. Early Years This section includes Northwestern Mutual s early years. Northwestern Mutual was founded by New York trader John Johnston as the Mutual Life Insurance Company of the State of Wisconsin in 1857. Northwestern Mutual s predecessor Mutual Life Insurance Company of the State of Wisconsin issued its first policies in 1858. Northwestern Mutual s predecessor Mutual Life Insurance Company of the State of Wisconsin moved its headquarters from Janesville, WI to Milwaukee, WI in 1859. Northwestern Mutual s predecessor Mutual Life Insurance Company of the State of Wisconsin s CEO John Johnston took out a personal loan to pay off policies of two clients killed in a train crash in 1859. Northwestern Mutual s predecessor Mutual Life Insurance Company of the State of Wisconsin issued its first out of state policies in 1859. Northwestern Mutual s predecessor Mutual Life Insurance Company of the State of Wisconsin changed its name to Northwester Mutual Life Insurance Company in 1865. Northwestern Mutual assembled its first five-person annual policy owners examining committee to review its business in 1907. Northwestern Mutual began insuring women in 1933 but they were limited to half the insurance men could purchase. Northwestern Mutual s Russell Investment Group was founded by Frank Russell in 1936 as Frank Russell Company. Northwestern Mutual emerged from the depression in 1939 having not defaulted on one policy nor laid off one employee. Growth Years This section includes Northwestern Mutual s growth years. Northwestern Mutual supported the war effort by purchasing $45 million in war bonds in 1943. Northwestern Mutual became one of the first US companies to buy an IBM main fram computer in the 1950s. Northwestern Mutual Company s The Todd Organization was founded by Mel Todd in 1957 to offer corporate & executive services. Northwestern Mutual began its college intern program, one of the first of its kind, in 1966. 195

Northwestern Mutual s subsidiary Northwestern Mutual Investment Services was founded in 1968. Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company landed JC Penney as its first pension consulting client in 1969. Northwestern Mutual networked its computer systems in the 1970s. Northwestern Mutual introduced its tag line The Queit Company during Olympic games commercials in 1972. Northwestern Mutual began using email before it was broadly utilized in the 1980s. Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company entered the investment management business and pioneered its manager of managers concept in 1980 to deliver its manager research services to smaller retirement plans and other channels. Northwestern Mutual acquired a 65% stake in RW Baird & Company in 1982. Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company s subsidiary Pantheon was founded in 1982. Northwestern Mutual has won many awards, starting with being named as the top respected company in the insurance industry by Fortune Magazine for 23 straight years from 1983 to 2006. Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company created its Russell 1000, 2000, & 3000 indexes in 1984. Northwestern Mutual s strategic employee benefit services was founded in 1984 to provide employee benefit plans, including group health, life, disability, & long-term care insurance. Northwestern Mutual increased its stake in RW Baird & Company to 80% in 1985. Northwestern Mutual paid out $1.0 billion in dividends to policy owners for the first time in 1986. Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company attempted to build a dedicated fee-based financial advisor sales force in the late 1980s & early 1990s. Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company s subsidiary Pantheon created the first private equity fund-of-funds to be listed on the London Stock Exchange in 1987. Maturity This section includes Northwestern Mutual s maturity. 196

Northwestern Mutual s predecessor Frank Russell Company had ignored many financial advisor opportunities in the late 1990s in favor of pursing international opportunities; in the process, its financial advisor assets slide from $9.0 to $7.0 billion and the firm disappointed some financial advisors. Northwestern Mutual became one of the first companies to offer customer service online in the 1990s. No rt hwe stern M u tual s Pre dec es so r Frank Russ el l C ompa ny Ha d Ignore d M an y Fi na ncia l Ad vis or Opport unit ie s i n the Lat e 1 9 90 s i n Fav or of Purs ing In te rna t ion a l Op portu nit ie s; in t he Proc es s, its F inanc ia l Ad v isor A ss et s Sl id from $ 9. 0 t o $7.0 Bi llio n a nd t he F irm D is ap poi nt ed Some Finan c ial Advi so rs $9.0 1990s Frank Russell Company Financial Advisor Assets ($ Billions) $7.0 2000s Source: 2/8/09 Russell Email (Winnick); 6/8/05 Capital Markets Consultants Conversation (Mendelson); Tiburon Research & Analysis Northwestern Mutual constructed a modern 18 story building on its Milwaukee, WI campus in 1990. Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company founded its Russell 20-20 non-profit group consisting of 20 pension plan sponsors & 20 money managers that explore investment opportunities in developing countries in 1990. Northwestern Mutual s Russell Investment Group (and its predecessor Frank Russell Company) has won many awards, starting with being named national family business of the year in 1997. Northwestern Mutual founded its Mason Street mutual funds in 1997. Northwestern Mutual s Russell Investment Groiup s predecessor Frank Russell Company began offering life cycle funds in 1997 to provide smaller investors with onestop solutions. Northwestern Mutual sold a 16% stake in RW Baird & Company back to its management in 1998. Northwestern Mutual acquired Frank Russell Company in 1999 in its effort to move away from its insurance focus. Northwestern Mutual s subsidiary Northwestern Mutual Long-Term Care Insurance Company was founded in 1999. Northwestern Mutual Sold a 16% Stake in RW Baird & Company Back to its Management in 1998 Comments Founded in 1919 Founded as First Wisconsin Company Founded by Robert Baird Based in Milwaukee, WI 2,300 employees $75 billion assets under management $540 million revenues CEO: Paul Purcell Acquired 65% stake in 1982 Goal was to secure a mutual funds offering for its life insurance agents Acquired additional 15% in 1985 to increase ownership stake to 80% Management retained ownership of remaining 20% Sold 16% stake back to management in 1998 Increased management s stake to 36% Northwestern Mutual retained 64% stake Source: 4/27/05 Northwestern Mutual Web Site; 5/21/04 Capital M arkets Consultants Conversation (Mendelson); 5/17/04 Wall Street Journal; 5/13/04 RW Baird News Release; 5/12/04 RW Baird Web Site; 5/7/04 Milwaukee Business Journal; 4/21/04 RW Baird News Release; 1/14/04 Northwestern Mutual Web Site; 12/00 Baird Brochure; 2/27/98 Milwaukee Business Jouranl; Tiburon Research & Analysis Northwestern Mutual developed its Northwestern Mutual Financial Network as a new brand identity in 2000. 197

Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company began renaming some of its businesses Russell Investment Group in 2000. Northwestern Mutual s Russell Investment Group s predecessor Frank Russell Company abandoned its dedicated fee-based financial advisor sales force strategy in 2000. Northwestern Mutual established a trust joint venture with Northern Trust in 2001 called this Northwestern Mutual Trust Company as a special purpose federal savings bank to stem the flow of death benefits out of the firm. Northwestern Mutual sold an additional 7% stake in RW Baird & Company back to its management in 2001. Northwestern Mutual s Russell Investment Group also ended its practice of selfcustodying and referred its financial advisors to Fidelity Investments in 2001. Northwestern Mutual s Frank Russell Company partnered with Fidelity Investments to launch Russell managed portfolios, combining multi-manager investment styles with Fidelity Investments technology platform & services in 2001. Northwestern Mutual assumed RW Baird & Company s 55 person investment operations support organization in 2002. Northwestern Mutual s Russell Investment Group (and its predecessor Frank Russell Company) has made several acquisitions in the English speaking countries markets, starting with Pantheon in 2003. Northwestern Mutual s Frank Russell Company was renamed Russell Investment Group in 2003. Northwestern Mutual s subsidiary Northwestern Mutual Trust Company was renamed its wealth management group in 2003. Northwestern Mutual sold its remaining 57% stake in RW Baird & Company back to its management team in 2004. Northwestern Mutual began disclosure on its fee-based brokerage account program select asset in 2004 prior to the Raymond James penalty. Northwestern Mutual hired Moss Adams to conduct a succession planning study for its managing partners in 2004. Northwestern Mutual moved its clearing relationship from RW Baird & Company to Pershing in 2005. Northwestern Mutual made six key fee-account program changes in 2006 as a result o fthe fee-based brokerage account regulatory issues, its move to Pershing, and its need for open architecture. 198

Northwestern Mutual executives & reps had strong opinions about the changes in its feeaccounts business. Northwestern Mutual s Russell Investment Group moved its managed accounts off its own platform, shifting to Envestnet, in 2007 Northwestern Mutual paid out $5.0 billion in dividends for the first time in 2007. Northwestern Mutual s Russell Investment Group was criticized for poor performance in its hedge funds-of-funds business in 2008. Northwestern Mutual s Russell Investment Group launched its web-based helping advisors aid to assist financial advisors in re-profiling their clients due to the troubling economic environment in 2008. Northwestern Mutual s Russell Investment Group experienced a senior executive mass exodus in 2008 due to lucrative terms of the firm s equity ownership program. Northwestern Mutual s Russell Investment Grup began actively seeking a new headquarters building in 2009 as its current lease expires in 2013. Northwestern Mutual s Russell Investment Group plans to cut 20% of its staff in 2009. Northwestern Mutual s Russell Investment Group announced a joint venture with Van Kampen in 2009 in which Van Kampen will distribute a series of target date mutual funds and Russell Investment Group will sub-advise half of the assets. Northwestern Mutual Life Insurance Company shortened its name to Northwestern Mutual to help in marketing. Northwestern Mutual s tagline emphasizes its understated image. It reads, The quiet company. Northwestern Mutual also utilizes a tagline to highlight its services. It reads, Innovative solutions for business, estate insurance, & personal finance. Northwestern Mutual s Tagline Emphasizes its Understated Image Northwestern Mutual Tagline The quiet company Northwestern Mutual is a frequent advertiser, including its traditional campaign the quiet company and its more recent campaign to let your worries go. Source: 9/15/08 Forbes; Tiburon Research & Analysis 69 Northwestern Mutual also proudly advertises its dividends. Northwestern Mutual also advertises to hire sales representatives. 199

Northwestern Mutual s Russell Investment Group also runs frequent advertising campaigns, including recent advertisements promoting the weight of responsibility and in good times & bad. Northwestern Mutual s Northwestern Mutual Foundatoin has given away $69 million to Milwaukee, WI programs since 2000. Statistics The second section of Northwestern Mutual s profile will review some key statistics regarding the firm. Northwestern Mutual has 5,500 employees, up nearly 50% since 1998. Northwestern Mutual has a very low voluntary employee turnover rate at just 3%. Northwestern Mutual s low voluntary turnover is likely aided by the terrific perks that employees receive from the company, including health benefits, retirement benefits, & food. Northwestern Mutual Has 5,500 Employees, Up Nearly 50% Since 1998 Northwestern Mutual generates $21.4 billion revenues, up 65% since 1998. Northwestern Mutual s revenues are generated almost two-thirds from premiums. 3,700 Northwestern Mutual Employees 4,500 5,500 1998 2004 2008 Source: 12/18/08 Northwestern Mutual Web Site; 4/27/05 Northwestern Mutual Web Site; 8/11/98 Wall Street Journal; Tiburon Research & Analysis 77 Northwestern Mutual generates $13.2 billion premium revenues, up over 40% since 2000. Northwestern Mutual generates $7.6 billion net investment income, up over 30% since 2003. Northwestern Mutual s Generates $13.2 Billion Premium Revenues, Up Over 40% Since 2000 Northwestern Mutual Premium Revenues ($ Billions) $9.2 $9.4 $10.1 $10.3 $10.7 $12.1 $13.2 Northwestern Mutual summarizes its mid-term goals as increasing its insurance revenues, strengthening its distribution system, & increasing its operating efficiencies. 2000 2001 2002 2003 2004 2006 2007 Source: 3/31/08 Northwestern Mutual Annual Report; 4/27/05 Northwestern Mutual Web Site; Tiburon Research & Analysis Businesses The third section of Northwestern Mutual s profile will outline its core businesses. 200

Northwestern Mutual has four primary businesses, including Northwestern Mutual Life Insurance Company, Northwestern Mutual Long-Term Care Insurance Company, Northwestern Mutual Trust Company, and Northwestern Mutual Investment Services, along with its Northwestern Mutual Financial Network. Northwestern Mutual s premium revenues nearly all come from the firm s life insurance business. Northwestern Mutual s Premium Revenues Nearly All Come from the Firm s Life Insurance Business Northwestern Mutual Premium Revenues By Source Disability & Long- 5% Northwestern Mutaul Term Care 5% Life Insurance Company Northwestern Mutual s core business is Northwestern Mutual Life Insurance Company, which underwrites the firm s life Life Insurance 90% insurance business. This business has 3.2 million life insurance policy owners, 4.8 Source: 4/27/05 Northwestern Mutual Web Site; Tiburon Research & Analysis million life insurance policies in force, $1.1 trillion life insurance in force, and $100 billion annual premiums written. Northwestern Mutual serves 3.2 million life insurance policy owners, up from 3.0 million in 2004. Annuities Northwestern Mutual has a near 100% policy persistency rate. Northwestern Mutual gets almost two-thirds of its new policy sales from existing policy holders. Northwestern Mutual Has a Near 100% Policy Persistency Rate Northwestern Mutual Life Insurance Company Life Insurance Policy Holders By Persistency Rate A ba ndo n Pol ic y w ith Nort hwestern M utual Li fe 4 % Northwestern Mutual has 4.8 million life insurance policies in force. Northwestern Mutual has $1.1 trillion life insurance in force, up 30% since 2003. Northwestern Mutual writes $100 billion in individual life insurance premiums annually. Northwestern Mutual offers four lines of life insurance products, including permanent, term, combination, & variable. Northwestern Mutual also offer annuities. Source: 12/18/08 Northwestern Mutual Web Site; 4/27/05 Northwestern Mutual Web Site; Tiburon Research & Analysis Northwestern Mutual has 357,000 annuity contracts in force. Ke e p P oli cy wi t h N ort hw e ste rn M u tua l Lif e 9 6 % 201

Northwestern Mutual has $11.9 billion annuity assets under management. Northwestern Mutual sells $789 million annuities, up 10% since 2003. Northwestern Mutual offers a range of annuity products, including deferred and immediate annuities. Northwestern Mutual also offers disability insurance. The firm has 350,000 policy owners, 603,000 policies in force, and $42 million individual disability premiums. Northwestern Mutual serves 350,000 disability insurance policy owners. Northwestern Mutual has 603,000 disability insurance policies in force. Northwestern Mutual collects $42 million in new disability insurance premiums. Northwestern Mutual Long-Term Care Insurance Company Northwestern Mutual s second subsidiary is Northwestern Mutual Long-Term Care Insurance Company. This business was founded in 1999 and has 40,000 policies in force with $19.1 million in new premiums. Northwestern Mutual has 40,000 long-term care insurance policies in force. Northwestern Mutual writes $19.1 million in long-term care insurance premiums. Northwestern Mutual s primary long-term care offering is called quiet care. Northwestern Mutual Trust Company Northwestern Mutual s third business is called the Northwestern Mutual Trust Company was established in 2001 with assistance from Northern Trust to offer trust and investment advisory services. This business was founded in 2001 and is based in Milwaukee, WI. It has 16 employees, 160 registered reps, 300 clients, 555 accounts, and $472 million assets under management. The business is led by ites CEO Greg Johnson. Northwestern Mutual s Third Business C alled the Northwestern Mutual Trus t Company was Es tablished in 2001 with Assistance from Northern Trust to Offer Trust and Investment Advisory Services Source: 6/16/05 Northwestern Mutual Conversation (Johnson); 6/10/05 Northwestern Mutual ADV; 6/8/05 Northwestern Mutual Brochure; 6/8/05 Capital Markets Consultants Conversation (Medelson); 6/1/05 Northwestern M utual Conversation (Powers); 4/27/05 Northwestern Mutual Web Site; Tiburon Research & Analysis Comments Founded in 2001 Based in Milwaukee, WI 16 employees 160 registered reps 300 clients 555 accounts $472 million assets under management CEO: Greg Johnson Northwestern Mutual Trust Company has fewer than twenty employees. Northwestern Mutual Trust Company has 160 registered reps. 202

Northwestern Mutual Trust Company s products are distributed through only a tiny fraction of Northwestern Mutual Financial Network s agents, with an even smaller portion actively making sales. Northwestern Mutual Trust Company holds agents wishing to sell its products to a set of strict standards, including five years minimum experience, demonstrated success with high net worth investors, and credentials. Northwestern Mutual Trust Company serves 300 clients. Northwestern Mutual Trust Company s clients are three-quarters high net worth investors, with the remainder being businesses & charitable organizations. Northwestern Mutual Trust Company serves 555 clients accounts. Northwestern Mutual Trust Company s average relationship size is $1.6 million. Northwestern Mutual Trust Company has gathered $472 million assets under management, up over 100% since 2003. Northwestern Mutual Trust Company believes that its core business is investment management and it also offers trustee services to clients. Northwestern Mutual Trust Company s investment management business accounts for nearly three-quarters of its assets under management. Northwestern Mutual Trust Company s assets are one-third in the Russell asset management program, one-third in the Northern Trust accounts, and the remaining onethird in other mutual funds. Northwestern Mutual Trust Company offers a host of normal back office operations which allows its to be sold as a wealth management offering, including client bill pay and tax keeping. Northwestern Mutual Trust Company is licensed to do business in 40 of the 50 states. Northwestern Mutual Trust Company may accept appointments as sole trustee, cotrustee, or successor trustee. Northwestern Mutual Trust Company has a complex pricing grid for its fee-accounts business, ranging from 0.35% to 1.50% depending on product and account type. Northwestern Mutual Trust Company charges from 150 to 35 basis points on individual securities in Northern Trust investment management accounts. Northwestern Mutual Trust Company charges from 100 to 20 basis points on mutual funds in Northern Trust investment management accounts. Northwestern Mutual Trust Company charges from 125 to 50 basis points on individual securities in Northern Trust trust accounts. 203

Northwestern Mutual Trust Company charges from 75 to 32 basis points on mutual funds in Northern Trust trust accounts. Northwestern Mutual Trust Company charges from 200 to 90 basis points on invesmtnet management accounts in Russell s transaction brokerage program. Northwestern Mutual Trust Company charges from 230 to 100 basis points on investment management accounts in Russell s mutual fund wrap fee account program. Northwestern Mutual Trust Company charges from 160 to 65 basis points on fixed income investment management accounts in Russell s managed portfolios program. Northwestern Mutual Trust Company charges from 170 to 100 basis points on trust accounts in Russell s transaction brokerage program. Northwestern Mutual Trust Company charges from 205 to 112 basis points on trust accounts in Russell s mutual fund wrap account program. Northwestern Mutual Trust Company charges from 125 to 77 basis points on trust accounts in Russell fixed income portfolios in Russell s mutual fund wrap accounst program. Northwestern Mutual Trust Company s Russell asset management program also charges a mutual fund holding fee on top of its net advisory fees. Northwestern Mutual Trust Company s Russell asset management program also charges an administrative fee on top of the net advisory fees. Northwestern Mutual Trust Company charges from 150 to 35 basis points on fixed income investment management accounts in M&I investment management portfolios. Northwestern Mutual Trust Company charges from 125 to 50 basis points on fixed income trust accounts in M&I investment management portfolios. Northwestern Mutual Trust Company offers agents two methods for referring business to its group, both of which pay the same. Northwestern Mutual Trust Company organizes the agents selling its products its solicitors and investment advisory representatives. Northwestern Mutual Trust Company pays agents 80% of advisory fees to aid in its growth. Northwestern Mutual Trust Company Pays Agents 80% of Advisory Fees to Aid in its Growth Northwestern Mutual Trust Company Advisory Fees By Payout Northweste rn Mutual Trust Company Retains 20% Source: 6/1/05 Northwestern Mutual Conversation (Powers); Tiburon Research & Analysis Rep Payout 80% 204

Northwestern Mutual Trust Company agents are also paid up to 28% of administration fees. Northwestern Mutual Trust Company advisory fees are distributed between the firm, the agents referring the accounts, and the investment advisory reps who will serve the clients. Northwestern Mutual Investment Services Northwestern Mutual s fourth business is Northwestern Mutual Investment Services, which includes its broker/dealer, its proprietary mutual fund family, and one of its registered investment advisors, as well as its ownership of Russell Investment Group. This business was founded in 1968 and has 554 employees. Northwestern Mutual Investment Services has 554 employees, up over 450% since 2004. Northwestern Mutual Investment Services serves in three capacities, including broker/dealer, proprietary mutual funds, & fee-accounts sponsor. Northwestern Mutual Investment Services serves in three capacities, including broker/dealer, proprietary mutual funds, & fee-accounts sponsor. Northwestern Mutual Investment Services Has 554 Employees, Up Over 450% Since 2004 Northwestern Mutual Investment Services Employees 120 554 2004 2007 Source: 6/08 Financial Planning; 7/18/05 Northwestern Mutual Conversation (Robinson); Tiburon Research & Analysis 145 Northwestern Mutual Investment Services first business is its broker/dealer. This business was founded in 1968, has 1,199 offices, 7,252 registered reps, $30 billion assets under administration, and $449 million revenues. Northwestern Mutual Investment Services has 1,199 offices. Northwestern Mutual Investment Services has 7,252 registered representatives, up 15% since 2004, and including most of its agents. Northwestern Mutual Investment Network s agents are almost half involved in investments. Northwestern Mutual Investment Services reps are more than one-quarter series 7 registered. Northwestern Mutual Investment Services Has 7,252 Registered Representatives, Up 15% Since 2004, and Including Most of its Agents Northwestern Mutual Investment Services Registered Representatives 6,300 7,252 2004 2007 Note: Another source said that Northwestern Mutual has a new rule that all reps must be registered reps Source: 2/7/09 Russell Email (Winnick); 6/08 Financial Planning; 7/18/05 Northwestern Mutual Conversation (Robinson); 6/16/05 Northwestern M utual Conversation (Johnson); 6/8/05 Capital M arkets Consultants Conversation (Mendelson); 4/27/05 Northwestern M utual Web Site; Tiburon Research & Analysis 149 205

Northwestern Mutual Investment Services has $30 billion in assets under administration, up 100% since 2004. Northwestern Mutual Investment Services generates $449 million revenues, up over 100% since 2003. Northwestern Mutual Investment Services revenues are over three-quarters commission revenues. Northwestern Mutual Investment Services generates $62,000 in revenues per rep, up more than 40% since 2001. Northwestern Mutual Investment Services Generates $449 Million Revenues, Up Over 100% Since 2003 $107 Northwestern Mutual Investment Services Revenues ($ Millions) $153 $399 $449 2003 2004 2006 2007 Source: 6/08 Financial Planning; 6/29/05 Northwestern Mutual Memo (Roberts); Tiburon Research & Analysis Northwestern Mutual Investment Services generates $47.3 million fee revenues, up more than 400% since 2006. Northwestern Mutual Investment Services generates $46.1 million of other revenues, flat since 2006. Northwestern Mutual Investment Services assets under administration are nearly half in its select asset program. Northwestern Mutual Investment Services mutual funds sales are $10.9 billion, up over 250% scine 2003. Northwestern Mutual Investment Services offers Russell Investment Grup s life point funds as well as Russell s class A & C mutual funds. Northwestern Mutual Financial Network s agents who sell investment utilize Russell Investment Group almost half of the time. Northwestern Mutual Investment Services Mutual Funds Sales are $10.9 Billion, Up Over 250% Since 2003 Northwestern Mutual Investment Services Mutual Fund Sales ($ Billions) Source: 1/27/09 Northwestern Mutual Web Site; 6/8/05 Capital Markets Consultants Conversation (Mendelson); 4/27/05 Northwestern Mutual Web Site; Tiburon Research & Analysis $4.1 $5.6 $10.9 2003 2004 2007 Northwestern Mutual Investment Services has gathered over three-quarters of its mutual fund assets in load funds, primarily those of American Funds and Russell. Northwestern Mutual Investment Services offers 35% to 80% payouts. 206

Northwestern Mutual Investment Services pays reps on a scale based on rolling commissions, with very narrow break points. Northwestern Mutual Investment Services second business is its Mason Street mutual funds. This business was founded in 1997, has 50 employees, 12 funds, and $69 billion assets under management. Northwestern Mutual Investment Services Mason Street mutual funds has 50 employees. Northwestern Mutual Investment Services Mason Street mutual funds offers twelve funds. Northwestern Mutual Investment Services Mason Street funds include equity, asset allocation, & fixed income funds. Northwestern Mutual Investment Services Mason Street mutual funds have $69 billion ssets under management, up nearly 40% since 2004. Northwestern Mutual Investment Services Mason Street Mutual Funds Have $69 Billion Assets Under Management, Up Nearly 40% Since 2004 Mason Street Mutual Funds Assets Under Management ($ Billions) Northwestern Mutual Investment Services Mason Street advertises affordable investing with as little as $500 initial investments. $57.0 $69.0 Northwestern Mutual Investment Services third business is its registered investment advisor business. 2004 2006 Source: 4/3/06 B usiness Wire; 6/8/05 Capital Markets Consultants Conversation (Mendelson); 4/27/05 Northwestern Mutual Web S ite; Tiburon Research & Analysis Northwestern Mutual Investment Services has a growing set of fee-account programs, including its select asset, Russell asset management program, Russell managed portfolios, & Norther Trust relationship. Northwestern Mutual Investment Services has gathered almost all of its fee-account assets in its fee-based brokerage account program called select asset. Northwestern Mutual offers its signature separately managed accounts program utilizing Envestnet. Northwestern Mutual Trust Company offers a separately managed accounts program through a relationship with Northern Trust that was established in 2001. Northwestern Mutual Trust Company has $120 million in client assets invested with Northern Trust. Northwestern Mutual Trust Company offers the Russell managed portfolios multiple style portfolios program. 207

Northwestern Mutual Trust Company has $162 million in client assets invested in the Russell managed portfolios program. Northwestern Mutual also developed a more traditional mutual fund wrap accounts program outside of its RAMP program, called Signature mutual funds, which utilizes the Envestnet platform as well. Northwestern Mutual Investment Services offers a mutual fund wrap account proram called the Russell asset management program (RAMP). Northwestern Mutual Investment Services Russell asset management program sets a relatively high bar for Northwestern Mutual agent utilization, including commission breakpoints, and credentialing. Northwestern Mutual Investment Services charges 12.45% to 1.20% on Russell s asset management program. Northwestern Mutual also offers broker wrap account program known as Signature Choice. Northwestern Mutual s Signature Choice is different than Select Asset in that it is advisory. Northwestern Mutual s Signature Choice expected to charge about 1.25% on its new broker wrap program, which will be somewhat higher than select asset. Northwestern Mutual Investment Services has traditionally offered a fee-based brokerage account program called Select Asset. Northwestern Mutual Investment Services has 22,000 accounts in its Select Asset Program. Northwestern Mutual Investment Services has $6.1 billion in its Select Asset fee-based brokerage account program. Northwestern Mutual Investment Services charges between 0.25% and 1.25% on mutual funds held in its Select Asset fee-based brokerage account program. Northwestern Mutual Investment Services also includes its Russell Investment Group subsidiary. Russell Investment Group was founded by Frank Russell as Frank Russell Company in 1936. The firm is based in Tacoma, WA. It operates in 47 countries, has 20 offices, 2,200 employees, and $925 million revenues. The firm is led by its CEO Andrew Doman and was acquired by Northwester Mutual in 1999 for $900 million upfront and additional performance based amounts. The firm was acquired so that Northwestern Mutual could move away from a pure insurance focus and they planned to incorporate Russell funds into their variable annuity and variable life products. This alliance gave Russell fund brand name recognition. Northwestern Mutual s Russell Investment Group serves clients in 47 countries, up from 35 in 2003. 208

Northwestern Mutual s Russell Investment Group has 20 offices. Northwestern Mutual s Russell Investment Group has offices in Auckland, London, New York, Singapore, Sydney, Tacoma, Tokyo, & Toronto. Northwestern Mutual s Russell Investment Group has 2,200 employees, up 100% since 1996. Northwestern Mutual s Russell Investment Group Has 2,200 Employees, Up 100% Since 1996 Russell Investment Group Employees Northwestern Mutual s Russell Investment Group s employees are located in Tacoma, WA. 1,400 1,300 2,000 1,930 1,904 1,800 2,200 Northwestern Mutual s Russell Investment Group generates $925 million revenues, up 85% since 2002. 1,100 650 100 2 1958 1979 1988 1996 1998 2003 2004 2005 2006 2007 2008 Northwestern Mutual s Russell Tribune Web Site; 4/27/05 Russell Web Site; Tiburon Research & Analysis Investment Group s strong reputation and focus on research is referred to by many industry participants. Source: 2/12/09 Russell P resentation (Stark); 2/7/09 Russell Email (Winnick); 2/2/09 Russell Web S ite; 1/29/09 Russell Web Site; 1/28/09 Investment News; 1/27/09 Tacoma News Tribune; 1/27/09 Milwaukee Business Journal; 1/16/09 Russell Web Site; 10/06 Fortune; 10/4/05 The News Northwestern Mutual s Russell Investment Group has six businesses, including investment consulting, investment management & research, its Russell indexes, alternative investments, investment services, & Russell retirement services. Northwestern Mutual s Russell Investment Group s first business is investment consulting. This business has 2,800 institutional clients and $2.0 trillion assets under administration. Northwestern Mutual s Russell Investment Group serves 2,800 institutional clients. Northwestern Mutual s Russell Investment Group s clients include Asahi Newspaper, AT&T, BASF, BHP, Boeing, Campbell Soup, & Caterpillar. Northwestern Mutual s Russell Investment Group Has $2.0 Trillion in Assets Under Advisement, Up Slightly Since 2003 But Off its Peak in 2004 Russell Investment Group Assets Under Advisement ($ Trillions) Northwestern Mutual s Russell Investment Group has $2.0 trillion in assets under advisement, up slightly since 2003 but off its peak in 2004. $1.8 $2.3 $2.0 Northwestern Mutual s Russell Investment Group s investment staff monitors 3,000 investment managers, up almost 50% since 2004. 2003 2004 2008 S ource: 1/16/09 Russell Web Site; 12/6/08 Advisor Software Web S ite; 10/20/08 B arron s; 7/27/05 Russell Web Site; 6/15/05 Russell Investment Group Brochure; 4/27/05 Russell Web Site; 5/23/03 Business Wire; Tiburon Research & Analysis 209

Northwestern Mutual s Russell Investment Group considers hiring only 9% of its monitored investment managers, labeling these considerations with a hire ranking. Northwestern Mutual s Russell Investment Group hires only 2% of its monitored investment managers. Northwestern Mutual s Russell Investment Group utilizes Alliance Bernstein, Marsico Capital Management, & Turner Investment Partners. Northwestern Mutual s Russell Investment Group offers three analytical tools, including its performance attribution, style classification, & quarterly reporting. Northwestern Mutual s Russell Investment Group s second business is investment management & research. Northwestern Mutual s Russell Investment Group has $151 billion assets under management, down 33% since 2007, but up over 300% since 1998. Northwestern Mutual s Russell Investment Group Has $151 Billion Assets Under Management, Down 33% Since 2007, But Up Over 300% Since 1998 Russell Investment Group Assets Under Management ($ Billions) $220 Northwestern Mutual s Russell Investment Group spreads risk across asset classes, styles, and managers to maximize diversification for clients. $1 $10 $23 $28 $36 $46 $61 $66 $69 $67 $76 $131 $167 $171 $151 Northwestern Mutual s Russell Investment Group has a 20% share of the manager-ofmanagers market, down from 26% in 2002. 1983 1991 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: 2/7/09 Russell Email (Winnick); 1/29/09 Russell Web Site; 1/28/09 Investment News; 1/16/09 Russell Web Site; 9/27/07 Business Wire; 11/2/06 Business Wire; 4/18/06 Russell Press Release; 10/4/05 The News Tribune; 4/27/05 Russell Web S ite; 2/23/04 Business Wire; 10/02 T icker; Tiburon Research & Analysis Northwestern Mutual s Russell Investment Group s investment management & research business can be organized by products. Northwestern Mutual s Russell Investment Group delivers portfolios through single net asset value life point mutual funds, target risk mutual fund strategies whereby Russell provides the asset allocation recommendation and implements through its mutual funds, & its unified managed account product. Northwestern Mutual s Russell Investment Group s assets under management are primarily managed in non-mutual fund investment products. Northwestern Mutual s Russell Investment Group s investment management & research s first product is mutual funds. Northwestern Mutual s Russell Investment Group offers 340 mutual funds, up nearly 90% since 2004. 210

Northwestern Mutual s Russell Investment Group offers seven types of mutual funds, including its US equity funds, international & global equity funds, fixed income funds, taxmanaged equity funds, specialty funds, money market funds, & life points funds. Northwestern Mutual s Russell Investment Group has gathered $29.0 billion mutual fund assets, up over 300% since 2001 but down 33% since 2007. Northwestern Mutual s Russell Investment Group Has Gathered $29.0 Billion Mutual Fund Assets, Up Over 300% Since 2001 But Down 33% Since 2007 Russell Investment Group Mutual Funds Assets Under Management ($ Billions) $43.4 Northwestern Mutual s Russell Investment Group s mutual funds have net outflows of $2.1 billion, down from net inflows of $4.1 billion in 2007. $9.0 $7.0 $8.0 $11.0 $21.0 $28.9 $37.1 $29.0 Northwestern Mutual s Russell Investment Group s key offering is its life point mutual funds which are targeted at client accounts less than $100,000. 1990s 2000s 2001 2002 2004 2005 2006 2007 2008 Source: 2/7/09 Russell Email (Winnick); 1/21/09 Envestnet Em ail (Hardwick); 10/10/05 Investment News; 6/8/05 Capital Markets Consultants Conversation (Mendelson); 3/7/05 Investment News; 11/30/01 Lockwood Conversation (Reinhart); 9/3/01 Investm ent News; 4/01 Institutional Investor; Tiburon Research & Analysis Northwestern Mutual s Russell Investment Group has 21 life point mutual funds. Northwestern Mutual s Russell Investment Group s life point funds is the key focus of its US retirement business, now accounting for $7.5 billion in assets under management. Northwestern Mutual s Russell Investment Group sells outcome oriented portfolios currently surrounding three outcomes, including target risk, target date, & target distribution. Northwestern Mutual s Russell Investment Group has been criticized for its life point funds high fees. Northwestern Mutual s Russell Investment Group offers its mutual funds in classes A, C, & I. Northwestern Mutual s Russell Investment Group has also packaged its manager-ofmanagers capabilities into a mutual fund wrap account program; and an MSP program. Northwestern Mutual s Russell Investment Group s mutual fund wrap account program RAMP is one of the leading independent sub-advised mutual fund wrap account programs. Northwestern Mutual s Russell Investment Group also offers a unified managed account program called RMP. Northwestern Mutual s Russell Investment Group charges 70 to 130 basis points on its RMP program based on account size and brokerage model. 211

Northwestern Mutual s Russell Investment Group s portfolio review, asset allocation, IPS, & proposal generator capabilities are all part of its portfolio link. Northwestern Mutual s Russell Investment Group also has a sub-advisory agreement with Van Kampen whereby Van Kampen distributes a series of target date mutual funds and Russell Investment Group sub-advises half of the assets. Northwestern Mutual s Russell Investment Group s investment management & research business can be organized by channels. Northwestern Mutual s Russell Investment Group gathers twothirds of its assets under management from independent broker/dealer reps. Northwestern Mutual s Russell Investment Group Gathers Two-Thirds of its Assets Under Management from Independent Broker/Dealer Reps Russell Investment Group Assets Under Management By Client Type Northwestern Mutual s Russell Investment Group has just 20 financial advisor institutional clients. Northwestern Mutual s Russell Investment Group s financial advisor business serves a wide variety of institutional clients, including American International Source: 2/7/09 Russell Email (Winnick); 3/7/05 Investment News; 5/12/04 Northwestern Mutual Web Site; 2/26/02 Russell Investment Group Conversation (S tark); Tiburon Research & Analysis Defined Contribution Plans 8% Fee-Base d Financial Advisors 20% Group, Cambridge Investment Research, Envestnet Asset Management, & Fidelity Investments. Northwestern Mutual s Russell Investment Group s assets under management are only in small part from Northwestern Mutual. Northwestern Mutual s Russell Investment Group s financial advisor business serves many financial advisors, including Anchor Capital Advisors & Maty Watkins. Northwestern Mutual s Russell Investment Group s regional strategic selling events are popular. Northwestern Mutual s Russell Investment Group focuses on delivering value added services, including capital market insights & practice management assistance. Northwestern Mutual s Russell Investment Group has dedicated financial advisor web site. Northwestern Mutual s Russell Investment Group offers its web capability helping advisors to aid financial advisors in re-profiling their clients in current troubling times, recording solutions for retirement planning given recent market impacts, & assisting financial advisors in reviewing their businesses given lower top line revenues. Ba nks 5% Independent Broke r/deale rs 67% 212

Northwestern Mutual s Russell Investment Group s helping advisors offers three sections for financial advisors, including sections regarding clients, financial advisors businesses, & the current market. Northwestern Mutual s Russell Investment Group s helping advisors first section deals with the clients. Northwestern Mutual s Russell Investment Group s helping advisors provides a long article addressing have the markets ruined retirement and outlining different tests and questions to address for clients. Northwestern Mutual s Russell Investment Group s helping advisors groups current retirees and those near retirement into four risk levels, giving potential actions for each risk level. Northwestern Mutual s Russell Investment Group s helping advisors offers a portfolio analyzer tool which is really just an Excel worksheet that calculates the clients needed retirement funds against its projected actual value through financial advisor data imports. Northwestern Mutual s Russell Investment Group s helping advisors second section deals with financial advisors businesses. Northwestern Mutual s Russell Investment Group s helping advisors offers an article that attempts to boost financial advisor morale and offers ideas on how to believe in themselves. Northwestern Mutual s Russell Investment Group s helping advisors offers and article to help advisors assess the health of their businesses through three parts, including a hard look at the numbers, strategies to address revenue shortfall, & fundamental changes for the future. Northwestern Mutual s Russell Investment Group s helping advisors suggests that financial advisors plot out the next two years by quarter to ensure that clients are getting the guidance they need. Northwestern Mutual s Russell Investment Group s helping advisors third section deals with the current market. Northwestern Mutual s Russell Investment Group s helping advisors attempts to remain optimistic about the market, offering ten signs to watch for that indicate an improving economy, but offers nothing in terms of a potential worsening economy. Northwestern Mutual s Russell Investment Group s helping advisors maintains an optimistic only view on the economy with an announcement that an interactive market recovery dashboard will soon be available. Northwestern Mutual s Russell Investment Group provides financial advisors with pointof-sale collateral. Northwestern Mutual s Russell Investment Group offers a quarterly investor newsletter featuring articles about general investing & retirement saving topics. 213

Northwestern Mutual s Russell Investment Group produces its edge newsletter for financial advisors. Northwestern Mutual s Russell Investment Group University offers a complete program of innovative learning opportunities to help financial advisors take their business to the next level. Northwestern Mutual s Russell Investment Group University diretly trained 906 individuals in 53 seminars, sending 1,949 continuing education certificates to attendees of sponsored events. Northwestern Mutual s Russell Investment Group s third business is Russell indexes. Northwestern Mutual s Russell Investment Group produces 20 US equity indexes, including the well known Russell 2000 small cap equity index. Northwestern Mutual s Russell Investment Group s US indexes have $4.0 trillion benchmarked to them, off 10% since 2007. Northwestern Mutual s Russell Investment Group s US indexes account for over half of US equity products benchmarked by US institutional investors. Northwestern Mutual s Russell Investment Group s US Indexes Have $4.0 Trillion Benchmarked to them, Off 10% Since 2007 $2.5 Russell Investment Group US Indexes Benchmarked Assets ($ Trillions) $4.4 $4.0 Northwestern Mutual s Russell Investment Group s fourth business is alternative investments. 2005 2007 2008 Source: 1/16/09 Russell Web Site; 9/08 Journal of Indexes; 10/4/05 The News Tribune; Tiburon Research & Analysis Northwestern Mutual s Russell Investment Group s alternative investments business includes hedge funds, private equity, & real estate offerings. Northwestern Mutual s Russell Investment Group s first alternative investment business is hedge funds. Northwestern Mutual s Russell Investment Group s hedge fund clients are primarily located in Europ, the United States, Japan, & Australia. Northwestern Mutual s Russell Investment Group had $6.0 billion assets under management in its hedge fund program until it was forced to liquidate in 2008. Northwestern Mutual s Russell Investment Group offers private equity through its Pantheon subsidiary. Northwestern Mutual s Russell Investment Group s Pantheon serves clients in 30 countries. 214

Northwestern Mutual s Russell Investment Group s Pantheon has five offices. Northwestern Mutual s Russell Investment Group s Pantheon has offices in New York, San Francisco, London, Hong Kong, & Brussels. Northwestern Mutual s Russell Investment Group s Pantheon has 23 partners. Northwestern Mutual s Russell Investment Group s Pantheon has 148 employees. Northwestern Mutual s Russell Investment Group s Pantheon serves 260 institutional clients. Northwestern Mutual s Russell Investment Group s Pantheon has $23.0 billion assets under management, up over 300% since 2003. Northwestern Mutual s Russell Investment Group s Pantheon s investments are categorized into regional primary investment and global secondary investments. Northwestern Mutual s Russell Investment Group s Pantheon Has $23.0 Billion Assets Under Management, Up Over 300% Since 2003 Pantheon Assets Under Management ($ Billions) $7.0 $23.0 Northwestern Mutual s Russell Investment Group s Pantheon 2003 2008 manages Pantheon Source: 4/27/05 Pantheon Web Site; 4/27/05 Russell Web Site; Tiburon Research & Analysis International Participations (PIP) which is a publicly traded private equity fund-of-funds listed on the Long stock exchange. Northwestern Mutual s Russell Investment Group s Pantheon s Pantheon International Participations has $8.5 billion assets under management. Northwestern Mutual s Russell Investment Group s Pantheon s Pantheon International Participations offers both ordinary and redeemable shares. Northwestern Mutual s Russell Investment Group offers real estate investments. Northwestern Mutual s Russell Investment Group s real estate team operates from five offices. Northwestern Mutual s Russell Investment Group has $8.0 billion assets under management in real estate strategies. Northwestern Mutual s Russell Investment Group offers multi-manager real estate funds. Northwestern Mutual s Russell Investment Group s fifth business is investment services. Northwestern Mutual s Russell Investment Group s Investment Services offers four services, including overlay services, agency foreign exchange trading, commission recapture, & transition management services. 215

Northwestern Mutual s Russell Investment Group s Investment Services first service is its derivative overlay service. Northwestern Mutual s Russell Investment Group s Investment Services uses its derivative overlay platform to find instances of slippage within portfolios. Northwestern Mutual s Russell Investment Group s Investment Services uses derivatives to manage beta exposures associated with portable alpha strategies. Northwestern Mutual s Russell Investment Group s Investment Services derivative overlay allows investors to offset interest rate risks synthetically. Northwestern Mutual s Russell Investment Group s Investment Services second service is agency foreign exchange trading. Northwestern Mutual s Russell Investment Group s Investment Services third service is commission recapture. Northwestern Mutual s Russell Investment Group s Investment Services commission recapture does not have an internal trading desk for fear of conflict of interest. Northwestern Mutual s Russell Investment Group s Investment Services commission recapture provides customizable monthly performance reporting through client link. Northwestern Mutual s Russell Investment Group s Investment Services has saved its clients $1.0 billion since 1969 through commission recapture. Northwestern Mutual s Russell Investment Group s Investment Services fourth service is its transition management service. Northwestern Mutual s Russell Investment Group s Investment Services transition management service utilizes the T standard for performance measurement. Northwestern Mutual s Russell Investment Group s sixth business is Russell Retirement Services. Northwestern Mutual s Russell Investment Group s Russell Retirement Services offer defined benefit and defined contribution plans. Northwestern Mutual s Russell Investment Group s Russell Retirement Services first offering is defined benefit plans. Northwestern Mutual s Russell Investment Group s Russell Retirement Services utilizes tools to evaluate defined benefit plans, including asset & liability studies, its Russell pension navigator, & Russell road map. Northwestern Mutual s Russell Investment Group s Russell Retirement Services Russell pension navigator is utilized by a number of defined benefit plans including Union Pacific Corporation. 216

Northwestern Mutual s Russell Investment Group s Russell Retirement Services second offering is defined contribution plans. Northwestern Mutual s Russell Investment Group s Russell Retirement Services offers its multi-manager funds, balanced funds, target date funds, and customized solutions for defined contribution plans. Northwestern Mutual s Russell Investment Group s Russell Retirement Services offers its multi-manager funds, balanced funds, target date funds, and customized solutions for defined contribution plans. Northwestern Mutual s Russell Investment Group s Russell Retirement Services provides quarterly performance reporting, web-based fund information, & participant education materials for defined contribution plans. Northwestern Mutual s Russell Investment Group s Russell Retirement Services believes that 401k plans are undergoing a fundamental change from a wealth management vehicle to one of income replacement. Northwestern Mutual s Russell Investment Group s Russell Retirement Services s researchers dubbed their findings the 10/30/60 rule, stating that retirement income comes 10% from contributions while working, 30% from investment returns prior to retirement, & 60% from investment returns after retirement. No rt hwe stern M u tual s Ru ss el l Inv es tme nt G roup s Russ el l R et ireme nt Se rvic es R es ea rchers Du bbed t he ir F ind ings t he 1 0/ 30 /6 0 Ru l e, Sta tin g t ha t Retire men t In co me Co mes 1 0% f rom Co nt ribut ions w h ile Worki ng, 30 % fro m I nv es tme nt R et urns Prior to Re ti re men t, & 60 % f rom I nve st men t Ret urns Af te r Retire men t Russell Retirement Services Retirement Income Study Retirement Income by Source Investment Returns Prior to Retirement 30% Contributions while Working 10% Investment Returns After Retirement 60% Northwestern Mutual s final business is its sales force which goes under the name Northwestern Mutual Financial Network. Source: 5/27/08 Reuters; Tiburon Research & Analysis Northwestern Mutual Financial Network agents are structured into 110 regional-based network offices, each led by entrepreneurial managing partners, formerly known as general agents. Northwestern Mutual Financial Network s regional-based network offices include Hoopis Financial Group and The McTigue Financial Group. Northwestern Mutual Financial Network s San Francisco agency is a good example, with one managing partner overseeing the San Francisco bay area by managing a series of managing directors at separate district offices. Northwestern Mutual Financial Network has 350 offices, stable since 2004. Northwestern Mutual Financial Network has 8,500 agents. 217

Northwestern Mutual Financial Network s agents nearly all work on a full-time basis, with the others working either part-time or on a semi-retired basis. Northwestern Mutual Financial Network has the best agent retention rate over the first five years working in the industry; however, it still suffers 80% attrition over that period. Northwestern Mutual Financial Network s agent attrition after five years of established service falls to only 5%, again an industry benchmark. Northwestern Mutual Financial Network executives feel that the Northwestern Mutual Financial Network is strong in many regions, while weak in others. Northwestern Mutual Financial Network s performance & strategy was rated a 7.3 by some senior bank executives. Northwestern Mutual Financial Network is seen as a leader in high-end life insurance by senior bank executives: They are very good at getting the high-end life insurance business They provide active competition on the planning and insurance side They give estate planning away to get the life insurance sale Northwestern Mutual Financial Network has three specialized producer groups, including Strategic Employee Benefit Services, The Todd Organization, & Network Planning Advisors. Northwestern Mutual Financial Network s first specialized producer group is Strategic Employee Benefit Services which provides employee benefit plans, including group health, life, disability, & long-term care insurance. Northwestern Mutual Financial Network s Strategic Employee Benefit Services has 93 offices. Northwestern Mutual Financial Network s Strategic Employee Benefit Services has 120 financial advisors. Northwestern Mutual Financial Network s Strategic Employee Benefit Services serves 26,000 business clients. Northwestern Mutual Financial Network s Strategic Employee Benefit Services generates $375 million revenues. Northwestern Mutual Financial Network s Strategic Employee Benefit Services offer employers four traditional benefits, including group health, group life, group disability, & group long-term care insurance. Northwestern Mutual Financial Network s Strategic Employee Benefit Services also offer employers three less traditional benefits, including cafeteria plans, COBRA services, & employee assistance. 218

Northwestern Mutual Financial Network s second specialized producer group is The Todd Organization which offer corporate & executive services. Northwestern Mutual Financial Network s The Todd Organization does specialized research in four fields, including benefit plan design and tax legislation. Northwestern Mutual Financial Network s third specialized producer group is Network Planning Advisors which offers financial planning services. Northwestern Mutual Financial Network s Network Planning Advisors offers full financial plans for flat fees between $5,000 and $25,000. Northwestern Mutual Financial Network s Network Planning Advisors have a minimum of five years experience. Northwestern Mutual Financial Network s Network Planning Advisors pay annual membership fees of $2,500. Northwestern Mutual Financial Network created customized desktop financial planning software with NaviPlan called Personal Planning Analysis (PPA) 2.0. Northwestern Mutual Financial Network agents offer insurance, investments, and advisory services. Northwestern Mutual Financial Network agents all have life insurance production goals. Northwestern Mutual Financial Network agencies inclue investment specialists who are also agents. Northwestern Mutual Financial Network reps also receive persistency & renewal payments. Northwestern Mutual Financial Network s payouts in the industry are the best according to executives. Northwestern Mutual Financial Network goals include to nearly double its force of investment specialists from 150 to 250 in the middle-term. Northwestern Mutual Financial Network pays out 55% of first year premiums to it sagents. Northwestern Mutual Financial Network currently does not have a corporately sponsored program for CPAs, however, it is under consideration whether such a program should be added. Northwestern Mutual Financial Network top performing agents in both insurance and investments sales are enrolled in separate winners groups, named the forum and MVP groups. Northwestern Mutual Financial Network agents also have an organized trade group called The Financial Representatives Association. 219

Northwestern Mutual s managing partners have an organized trade group with its own executives and staff. Organization & Ownership The final section of Northwestern Mutual s profile will address its organizational structure of ownership. Northwestern Mutual s web site is organized into nine sections, including about us, network services, insurance products, investment product,s advisory services, learning center, about the network, customer center, and careers. Northwestern Mutual is led by CEO Edward Zore and chief operating officer John Bremer. Executive team also includes: John Schlifske, executive vice president, investment products & services; Barbara Piehler, chief investment officer, Bill Beckley, head, agency; and Gary Poliner, chief financial officer. Northwestern Mutual remains a mutual company so that it returns profits to policy owners insead of share holders. Northwestern Mutual has $157 billion assets, up 150% in 1996. Northwestern Mutual Has $157 Billion Assets, Up 150% in 1996 Northwestern Mutual has earned the highest ratings in terms of financial strength from all four of the major rating agencies, including Standard & Poor s, Moody s, Fitch, & AM Best. $62 $92 Northwestern Mutual Assets ($ Billions) $115 $125 $133 $145 $157 Northwestern Mutual s premium revenues are nearly half returned to policy holders as dividends. 1996 1998 2003 2004 2005 2006 2008 Source: 12/18/08 Northwestern Mutual Web S ite; 10/15/08 Wall S treet Journal; 3/31/07 Northwestern Mutual Annual Report; 4/27/05 Northwestern Mutual Web Site; 11/5/98 Anderson Consulting s Insurance Industry Profile (AM Best); Tiburon Research & Analysis Northwestern Mutual pays $4.6 billion in dividends, up over 300% since 1986. Northwestern Mutual dividends paid out are three-quarters used by clients to purchase additional life insurance protection. Prudential Financial Prudential Financial was founded in 1875 and is based in Newark, NJ. The firm has operations in 30 countries, 40,000 employees, 12,000 agents, 15 million customers, and 40,000 corporate policholders. Prudential Financial has $2.0 trillion life insurance in force, $616 billion assets under management, $32 billion in revenues, $400 million earnings, and $454 billion in assets. The firm is listed and traded on the New York Stock Exchange under the symbol PRU and is led by its CEO Art Ryan. 220

History The first section of Prudential s profile will explain the key historical events in the firm s development. Prudential Financial was founded in 1875, faced some difficulties in the 1980s & 1990s, then simplified its business model in the early 2000s. Businesses The second section of Prudential s profile will outline its core businesses. Prudential Financial now focuses on four products and services, including insurance, investments, real estate, and business-to-business sales. Insurance Prudential Financial s insurance division is its first key business and it is organized around four offerings, including life, annuities, long-term care, and property & casualty insurance products. Prudential Financial s life insurance division offers policies thorugh its term & permanent life products. Prudential Financial was an early entrant, and has been a leader in variable life. Prudential Financial s life insurance division offers four types of annuity products, including variable, fixed immediate income, and modified guaranteed annuities. Prudential Financial draws consumers to its annuities by barraging them with information. Prudential Financial sold its property & casualty businesses to Liberty Mutual. Prudential Financial s claims-paying ability was recently upgraded by all three major rating agencies. Prudential Financial has an A+ rating (superior) from AM Best for financial strength. Prudential Financial has two salesforces, including its captive Prudential Financial salesforce and independent Prudential Select salesforce. Prudential Financial s salesforce has drastically declined, from over 20,000 at its peak in 1985. Prudential agents white collar union narrowly lost an election in 2002. Prudential Financial has struggled in converting its own agents into financial planners. Organization & Ownership The final section of Prudential s profile will address its organizational structure of ownership. 221

Prudential Financial has two sections on its web site, including solutions for individuals and solutions for businesses & organizations. Prudential Financial is led by Art Ryan; its management team includes Rodger Lawson, Mark Frier, Vivian Banta, and John Strangfeld. State Farm State Farm was founded in 1922 and is based in Bloomington, IL. Company has 391 offices, 68,000 employees, 17,800 agents, 27 million clients, and $98 billion assets. State Farm generates $56 billion revenues, $49 billion premium revenues, and $3.0 billion net income. State Farm has 74 million policies in force and $527 billion life insurance in force. Company is led by its CEO, Edward Rust. State Farm is a Mutual company. State Farm Insurance History The first section of State Farm s profile will explain the key historical events in the firm s development. State Farm was founded before the depression, and has grown to be the leading property & casualty insurance powerhouse. Early Phase This section includes State Farm s early phase. State Farm was founded in 1922 as a mutual auto insurance company for farmers. Firm was founded by George Mecherle who was a farmer from age 22 to 42 and then moved to Bloomington, IL due to health problems and began to sell insurance. He believed farmers should have cheaper auto insurance premiums because they drove less; began State Farm as a mutual auto insurance company. State Farm opened its first branch in Berkeley, CA in 1928. Middle Phase This section includes State Farm s middle phase. Source: 9/13/07 State Farm Web S ite; 3/31/07 State Farm Annual Report; 8/9/05 Web S ite; 4/25/05 State Farm Web Site; 6/21/01 A merican B anker; 4/9/01 American Banker; 1/24/01 Ark; Tiburon Research & Analysis State Farm became the nation s top auto insurer in 1942 and has been number one every year since. State Farm added homeowners insurance to its product offering in 1955. State Farm introduced good student discount program in 1962. Comments Founded in 1922 Based in Bloomington, IL 391 offices 68,000 employees 17,800 agents 27 million clients $98 billion assets $56 billion revenues $49 billion premium revenues $3.0 billion net income 74 million policies in force $527 billion life insurance in force CEO: Edward Rust Mutual company Web site: www.statefarm.com 222

State Farm established State Farm Companies in 1963. State Farm became the nation s top writer of homeowners insurance in 1964. State Farm opened new corporate headquarters in Bloomington, IL in 1972. State Farrm s Edward Rust began his career with State Farm at the Dallas, TX regional office in 1975. State Farm introduced its first computer system in 1980. State Farm s Ed Rust became president & CEO in 1985. State Farm s Ed Rust was elected chairman in 1987. State Farm passed $100 billion in ordinary life insurance in 1986. Recent Phase This section includes State Farm s recent phase. State Farm launched State Farm bank in 2000. State Farm was ranked first in the JD power & associates collision repair satisfaction study in 2003. The 2003 award was the first of its kind, State Farm received a score of 815 while the industry average was 784. State Farm opened a new Toronto-area operations center in 2006. State Farm was amongst 40 best copanies for diversity in black enterprise magazine in 2007. Statistics The second section of State Farm s profile will review some key statistics regarding the firm. State Farm has consolidated its claims offices to 391, down from 750 in 2004. State Farm Has 68,000 Employees, Down Almost 15% Since 2003 State Farm Employees State Farm has 68,000 employees, down almost 15% since 2003. 79,000 68,000 State Farm s employees located at headquarters in Bloomington, Illinois accounts for only onefifth of employees. State Farm has one of the Note: largest captive agent forces in the insurance industry, with almost 18,000 agents. 2003 2007 12,500 of State Farm s employee force are located at its headquarters in Bloomington, IL Source: 9/13/07 Sate Farm Web Site; 5/2/05 State Farm Web Site; Tiburon Research & Analysis 223

State Farm serves 27 million clients. State Farm has almost $100 billion in assets, up from $66 billion in 2002. State Farm generates $56 billion revenues, up from $48 in 2000. State Farm s revenues nearly all come from its property & casualty insurance business. State Farm generates $31.9 billion premium revenues, up steadily since 2003. State Farm Has Almost $100 Billion in Assets, Up From $66 Billion in 2002 $66 State Farm Assets ($ Billions) $78 $84 $98 2002 2003 2004 2006 State Farm earns $3 billion, up over 350% since 2005. Source: 3/31/07 Sate Farm Annual Report; 5/2/05 State Farm Web Site; Tiburon Research & Analysis State Farm has 74 million policies in force, up from 72 million in 2004. State Farm s policies & accounts are more than half auto policies. State Farm Has 74 Million Policies in Force, Up From 72 Million in 2004 State Farm Policies in Force (Millions) 72 74 State Farm amazingly provides insurance for one-fifth of the nation s automobile population. State Farm has important cultural perspective as a conservative company with a theme like a good neighbor. 2004 2007 Source: 9/13/07 Sate Farm Web Site; 5/2/05 State Farm Web Site; Tiburon Research & Analysis Businesses The third section of State Farm s profile will outline its core businesses. State Farm has five primary lines of business, several of which penetrate the financial services industry. Businesses include: property & casualty insurance; life insurance, health & annuities; banking, mutual funds; and wealth management. Property & Casualty State Farm s first business is property & casualty insurance. Property & casualty was founded in 1922, has 65 million policies in force, 40 million auto insurance policies. Business generates $45 billion revenues of which $31 billion are generated through auto business. 224

State Farm property & casualty policies in force have plateaued at around 65 million. State Farm has 40 million auto insurance policies in force, relatively stable since 2002. State Farm Property & Casualty Policies in Force Have Plateaued at Around 65 Million State Farm Property & Casualty Policies in Force (Millions) State Farm generates $48.0 billion property & casualty premiums, up from $34.6 billion in 1998. 60.4 61.2 62.6 65.4 66.2 65.4 65.4 66.6 67.7 State Farm generates $31 billion auto business revenues, relatively stable since 2002. 1998 1999 2000 2001 2002 2003 2004 2005 2006 State Farm s policies & accounts are more than half auto policies. Source: 12/31/06 State Farm Journal; 5/2/05 State Farm Web Site; Tiburon Research & Analysis State Farm property & casualty insurance now offers insurance products specifically designed for small businesses. Rolled out specialized liability insurance for small businesses in 38 states. State Farm offers a web-based tool called Business Owner Need Analyzer that helps business owners determine insurance and financial need. State Farm s Policies & Accounts are More than Half Auto Policies State Farm Policies & Accounts by Type Other P roperty & Casualty 4% 4% Homeowners 24% 27% 66% 63% Auto State Farm property & casualty 2005 2006 has implemented an electronic Source: 3/31/07 State Farm Annual Report; 12/31/06 State Farm Journal; 5/2/05 State Farm Web Site; Tiburon Research & Analysis system for homeowners applications. System is known inside State Farm as Enterprise Apps and was implemented in 2001 through a pilot program in Indiana. Incomplete homeowner application percentage went down to nearly 0% in the new system; down from close to 10% before the system was implemented. Improves efficiency and costs for State Farm. State Farm was ranked world s first property & casualty insurer in auto & homeowner insurance. State Farm was ranked first property & casualty insurer in the US. Insures one in five automobiles in the US and is the largest automobile and home insurer in US. George Mecherle s original vision was to deliver fairly priced automobile insurance to farmers. State Farm has Canadian property & casualty operations. Life Insurance, Health, & Annuities State Farm s second business is life insurance, health, & annuities. The company was formed in 1929 and has 7.3 million policies with $527 billion life insurance in force. Life 225

insurance, health, & annuities is the #4 in paid-for-volume ordinary life insurance with $327 million in life first year earned premium and $305 million in net income of which nearly $80 billion are in annual applications. State Farm s insurance offering is designed to address clients risks, dreams, and legacy. State Farm life has seen consistent growth in policies in force over the years, now over seven million. State Farm Life Has Seen Consistent Growth in Policies in Force Over the Years, Now Over Seven Million State Farm Life Policies in Force (Millions) State Farm life now has over $650 billion in life insurance in force, growing billions of dollars every year. 6.2 6.5 6.9 7.2 7.3 7.6 State Farm life experienced a temporary reduction in the volume of life insurance applications but seen strong growth in recent years, up over 30% since 2003. 1999 2000 2001 2002 2003 2006 Source: 12/31/06 State Farm Journal; 5/2/05 State Farm Web Site; Tiburon Research & Analysis State Farm life has consistently had over $300 billion in first year earned premiums, which peaked in 2002 with close to $350 billion. State Farm life has had consistent streams of net income, aside from a rough year in 2002. State Farm life is in the process of consolidating its ten field operations offices into four core locations. Scheduled for completion in 2007; effort to streamline business processing, introduce technology improvements, and redesign organizational structures at headquarters and in field; previously occupied ten field operations centers. As part of restructuring 300 experienced life agents are relocating and 300 other agents from State Farm joining the Life Company. State Farm life four core locations include Austin, Bloomington, Greeley, and New Albany. State Farm life has an internal goal of penetrating 25% of State Farm households bye 2010. State Farm Life Has An Internal Goal of Penetrating 25% of State Farm Households by 2010 State Farm Households by Life Coverage Goals Life Coverage 25% State Farm life offers five lines of life insurance, including term life, whole life, universal life, second to die, and variable universal life. No Life Coverage 75% Source: 5/2/05 State Farm Web Site; Tiburon Research & Analysis 226

State Farm life s first business is term life insurance. Provides death protection for stated time period and can be beneficial as extra insurance during child-raising years. State Farm life s second business is whole life insurance. Permanent life insurance for entire life, assuming timely payments. State Farm life s third business is universal life insurance. Universal offers flexible premium, adjustable benefits allow for flexibility upon changing insurance needs. State Farm life s fourth business is second to die life insurance. Similar to universal life, except for the fact that it covers two people and no death benefit is paid until both policyholders die. State Farm life s fifth business is variable universal life insurance. Flexible premium life insurance policy which provides protection with long-term investment growth potential of the policy's account value. State Farm has four annuity products, including future income, future income plus, variable annuity, and guaranteed income. State Farm also has nearly $100 million in long-term care premiums, which have shown considerable growth. State Farm Bank State Farm s third business is State Farm Bank. The bank was formed in 1999 and has 1 million accounts with $8 billion in assets and $5 billion in deposits. Bank is ranked as the 112th largest bank in the United States. The State Farm Bank is run by its CEO, Stan Ommen. State Farm Bank now has over 1.6 million accounts, up over 300% since 2002. State Farm Bank has over $13 billion assets, increasing ten-fold since 2001. State Farm Bank has over $9 billion deposits, up over 250% since 2002. State Farm Bank has a unique structure in that there are no branches. Bank offers products and services through State Farm Agents. State Farm Bank Has Over $13 Billion in Assets, Increasing Ten- Fold Since 2001 $1.3 $4.6 State Farm Bank Assets ($ Billions) $7.9 $10.4 $12.2 $13.5 2001 2002 2003 2004 2005 2006 State Farm Bank offers State Source: 12/31/06 State Farm Journal; 5/2/05 State Farm Web Site; Tiburon Research & Analysis Farm Bank Visa. Rated as top credit card by Nielson Report and has 350,000 accounts. 1% of purchases can be used towards State Farm products. 227

Mutual Funds State Farm s fourth business is mutual funds. Funds were launched in 2001 and currently have 185,000 accounts with $1 billion assets under management. State Farm mutual funds now have over 330,000 accounts due to eye-popping growth since their launch, a twenty fold increase since 2001. State Farm mutual funds have almost $4 billion assets under management, a forty-fold increase since 2001. State Farm Mutual Funds Have Almost $4 Billion in Assets Under Management, A Forty-Fold Increase Since 2001 State Farm Mutual Fund Assets Under Management ($ Billions) State Farm mutual funds has 10 funds including equity, bond, and money market funds; some managed internally and some sub-advised by Capital Guardian and Barclays. State Farm has several competitive advantages in moving into financial services, Source: 12/31/06 State Farm Journal; 5/2/05 State Farm Web Site; Tiburon Research & Analysis including huge salesforce, huge client base, middle market clientele & positioning, and well-known brand. State Farm has a variety of key issues to consider in entering financial services, including target clients, client needs, delivery channels, service & product bundles, get agents to focus beyond property & casualty insurance, define competition, and risks & profitability. State Farm distributes primarily through a set of semi-independent agents. State Farm stresses community involvement as part of their credo, involvements include good neighbor citizenship foundation, state farm learning & teaching exchange, encouraging community based learning in schools, committing $4.2 million towards quality teaching. State Farm s additional Tiburon observation include public announcements, interaction, and executive concerns. State Farm s additional Tiburon impressions include past & future and potential stumbling blocks. $0.1 Organization & Ownership The final section of State Farm s profile will address its organizational structure of ownership. State Farm s website is a bit murky, packed with tools for visitors such as financial calculators and articles about the importance of insurance coverage. The six sections of the web site include: my account, insurance, banking, mutual funds, planning & learning, and about us. $0.3 $1.1 $2.0 $2.8 $3.9 2001 2002 2003 2004 2005 2006 228

State Farm is led by CEO Edward Rust. Management team also includes: Vincent Trosino, Chief Operating Officer; State Farm Group Net Worth is Nearing $60 Billion, and Growing Rapidly, Up Almost 100% Since 2002 James Rutrough, Chief Accounting Officer; Charles State Farm Group Net Worth Wright, Chief Marketing Officer; ($ Billions) Michael Tipsord, Chief Financial Officer; and Kim Brunner, $58 General Counsel. State Farm is a mutual company owned by its policy holders. $32 $40 $46 $50 State Farm group net worth is nearing $60 billion, and growing rapidly, up almost 100% since 2002. Thrivent Financial for Lutherans Thrivent was founded in 2001 by the merger of the Aid Association for Lutherans and the Lutheran Brotherhood. The company is based in Appleton, WI and has 2,676 employees, 1,597 rep offices, 2,778 reps, and 658,000 accounts. Thrivent Financial generates $4.2 billion revenues and $524 million in net income. Company has $70.6 billion assets under management and $160 billion life insurance in force. Thrivent Financial is led by its CEO, Bruce Nicholson. 2002 2003 2004 2005 2006 Source: 12/31/06 State Farm Journal; 5/2/05 State Farm Web Site; Tiburon Research & Analysis Thrivent Financial For Lutherans Comments Founded in 2001 Founded by the merger of the Aid Association for Lutherans and the Lutheran Brotherhood Based in Appleton, WI 2,676 employees 1,597 rep offices 2,778 reps 658,000 accounts $4.2 billion in revenues $524 million in net income $70.6 billion assets under management $160 billion life insurance in force CEO: Bruce Nicholson Web site: www.thrivent.com Source: 3/31/07 Thrivent FinancialAnnual Report; 7/5/05 Thrivent Web Site; Tiburon Research & Analysis History The first section of Thrivent Financial s profile will explain the key historical events in the firm s development. Thrivent Financial was created by the 2001 merger of the Aid Association for Lutherans and Lutheran Brotherhood. Early Phase This section includes Thrivent Financial s early phase. Thrivent Financial for Lutherans was founded in 1902. Thrivent Financial s predecessor Lutheran Brotherhood was founded in 1917. Middle Phase 229

This section includes Thrivent Financial s middle phase. Recent Phase This section includes Thrivent Financial s recent phase. Thrivent Financial predecessors Aid Association for Lutherans and the Lutheran Brotherhood merged to form Thrivent in 2001. Statistics The second section of Thrivent Financial s profile will review some key statistics regarding the firm. Thrivent Financial has more than 300 corporate office employees, which has increased more than 15% since 2001. Thrivent Financial has more than 1,500 rep offices, which has increased more than 15% since 2001. Thrivent Financial has almost 3,000 reps, which has increased more than 15% since 2001. Thrivent Financial has nearly two reps per office, which has been consistent since 2001. Thrivent Financial does not have reps that are OSJ managers, which has been consistent since 2001. Three-quarters of Thrivent Financial reps have series 7 licenses, which has remained consistent since 2001. Thrivent Financial has more than 275 reps producing more than $100,000 per year, which has increased slightly since 2001. Thrivent Financial has only a small share of reps producing more than $100,000 per year, which has been consistent since 2001. Thrivent Financial has more than 650,000 client accounts, which have grown steadily since 2001. Thrivent Financial Has More Than $70 Billion Assets Under Management, Which Have Grown Significantly Since 2002 Thrivent Financial Assets Under Management ($ Billions) Thrivent Financial has more than 200 client accounts per rep, which has increased steadily since 2001. $52.3 $57.7 $65.4 $67.5 $70.6 Thrivent Financial has more than $70 billion assets under management, which have grown significantly since 2002. Thrivent Financial has more 2002 2003 2004 2005 2006 Source: 3/31/07 Thrivent Financial Annual Report; 7/7/05 Thrivent Financial Web Site; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investm ent News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial A dvisor; 4/5/04 Investment News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; Tiburon Research & Analysis 230

than $15 million assets under administration per rep, which has increased steadily since 2001. Thrivent Financial generates more than $130 million in annual revenues, which have grown steadily since 2001. Thrivent Financial generates $50,000 in annual revenues per rep, which has increased slowly since 2001. Thrivent Financial generates three-quarters of its revenues from commissions, which has been consistent since 2001. Thrivent Financial has almost $160 billion life insurance in force, showing consistent growth since 2002. Thrivent Financial generates 0.30% return on assets, which is down from nearly 0.50% in 2001. Thrivent Financial earns over $520 million net income, consistent since 2004. Thrivent Financial has decreased its long-term debt since 2004. Thrivent Financial Has Almost $160 Billion Life Insurance in Force, Showing Consistent Growth Since 2002 Thrivent Financial Life Insurance in Force ($ Billions) $149.9 $152.4 $155.0 $157.3 $159.5 2002 2003 2004 2005 2006 Source: 3/31/07 Thrivent Financial Annual Report; Tiburon Research & Analysis Thrivent Financial has over $4 billion in shareholders equity, up more than 10% from previous year. Thrivent Financial has $8 million net excess capital, which has remained unchanged since 2001. Businesses The third section of Thrivent Financial s profile will outline its core businesses. Thrivent Financial has at least one business including its independent broker dealer business. Thrivent Financial s first business is its independent broker ealer business. Thrivent Financial is a member of the Insurance Marketplace Standards Association. Association sets standards for ethical sales and service of insurance and annuities. Thrivent Financial reps invest client assets in a wide variety of products, including 40% in mutual funds, 30% in annuities, 20% in fee-accounts, and 10% in individual securities & other products. 231

Mutual funds and annuities account for half of Thrivent Financial s revenues, which has been consistent since 2001. Thrivent Financial offers mutual funds from various mutual fund families. Offering includes 27 mutual funds through non-profit investment management firm; and mutual fund wrap account using third-party managers. Thrivent investment management offers nearly 30 mutual funds. Thrivent Financial has mutual fund assets. Thrivent Financial has more than $35 million in mutual fund sales, which have increased nearly 25% since 2001. Thrivent Financial has relationships with variable & fixed annuity providers. Thrivent Financial offers variable & fixed annuities. Thrivent Financial has variable & fixed annuity assets. Thrivent Financial offers proprietary variable & fixed annuities. Thrivent Financial has more than $30 million in variable & fixed annuity sales, which have increased more than 25% since 2001. Thrivent Financial has fee-accounts. Thrivent Financial has more than $10 billion in fee-account assets, which are up significantly since 2001. Thrivent Financial has more than $20 million in fee-accounts sales, which have nearly doubled since 2001. Thrivent Financial has nearly half of its reps utilizing fee-accounts, which has been steadily increasing since 2001. Thrivent Financial fee-account programs are average. Thrivent Financial offers separately managed account program. Thrivent Financial offers multiple style portfolio program. Thrivent Financial offers unified managed account program. Thrivent Financial offers broker wrap account program. Thrivent Financial offers a Mutual Fund Wrap Account using third-party managers. Emerging TAMP that clears through RBC Dain Correspondent Services. Thrivent Financial offers fee-based brokerage account program. 232

Thrivent Financial provides guidelines for discounting on its program. Thrivent Financial RIA policy is standard. Thrivent Financial has more than 10% of its reps providing services through their own RIA, which has remained consistent since 2001. Thrivent Financial generates more than $45 million in annual individual securities, insurance, limited partnerships, & other products revenues, which have grown steadily since 2001. Thrivent Financial offers a selection of individual securities. Thrivent Financial clears through multiple clearing houses. Thrivent Financial has IPO access. Thrivent Financial offers individual securities research. Thrivent Financial offers mutual funds research. Thrivent Financial individual securities commission schedule varies. Thrivent Financial offers five life Insurance offerings, including term life; fixed, whole, or traditional Life; fixed universal life, variable life, and variable universal life. Thrivent Financial offers five proprietary life insurance offerings, including term life; fixed, whole, or traditional Life; fixed universal life, variable life, and variable universal life. Thrivent Financial has policies regarding outside direct insurance sales. Thrivent Financial offers long-term care & disability insurance. Thrivent Financial has expanded its alternative investments offerings to include hedge funds & managed futures, venture capital & private equity, real estate, and other alternative investments. Thrivent Financial also offers other products & services. Thrivent Financial payout grid for mutual funds, annuities, life & other insurance products, individual securities, alternative investments, and other products & services ranges from 80% to 94%. Thrivent Financial fee-account administration fees are standard. Thrivent Financial transaction fees and/or ticket charges include mutual funds, annuities, fee-accounts, and individual securities. Thrivent Financial rep fees are average. Thrivent Financial offers customer service. 233

Thrivent Financial operations departments include licensing, new accounts, account transfers, and legal & compliance. Thrivent Financial product support includes mutual funds, annuities, fee-accounts, and life & other insurance products. Thrivent Financial sales & marketing support includes ads, newsletter, brochures, and direct mailings. Thrivent Financial business building support includes start-up, marketing, staffing & compensation, benchmarking, and succession planning. Thrivent Financial has technology offerings include new client sales, calculators, financial planning, asset allocation, and stock quotes. Thrivent Financial has top producers trips, annual conferences, & regional meetings. Thrivent Financial online training & other self-study offerings are average. Organization & Ownership The final section of Thrivent Financial s profile will address its organizational structure of ownership. Thrivent Financial web site is comprised of nine sections, including account access, annuities, insurance, investments, bank, retirement, planning tools & services, fraternal programs, and members & chapters. Thrivent Financial is led by CEO Bruce Nicholson. Management team also includes: David Anderson, Senior Vice President of Financial Services; Randy Boushek, Treasurer; Pamela Moret, Executive Vice President of Marketing & Products; Teresa Rasmussen, General Counsel; Larry Robbins, Chief Information Officer; Nikki Sorum Senior Vice President of Marketing & Products; and Jon Stellmacher, Chief Accounting Officer. Thrivent Financial is owned by it shareholders. Tompkins Insurance Agencies Tompkins Insurance Agencies is based in Ithaca, NY. History The first section of Tompkins Insurance Agencies profile will explain the key historical events in the firm s development. Tompkins Insurance Agencies has evolved through three phases, including its early, middle, and recent phases. Early Phase This section includes Tompkins Insurance Agencies early phase. Middle Phase 234

This section includes Tompkins Insurance Agencies middle phase. Recent Phase This section includes Tompkins Insurance Agencies recent phase. Statistics The second section of Tompkins Insurance Agencies profile will review some key statistics regarding the firm. Businesses The third section of Tompkins Insurance Agencies profile will outline its core businesses. Tompkins Insurance Agencies has a number of businesses. Organization & Ownership The final section of Tompkins Insurance Agencies profile will address its organizational structure of ownership. Tompkins Insurance Agencies has a web site. Tompkins Insurance Agencies is led by its CEO. Tomkins Insurance Agencies is owned by its members. USI Holdings USI Holding was founded 1994 and is based in Briarcliff Manor, NY. Company has 2,900 employees and generates $600 million revenues. USI Holdings is led by its CEO, David Eslick. History The first section of USI Holdings profile will explain the key historical events in the firm s development. USI Holdings Comments Founded 1994 Based in Briarcliff Manor, NY 2,900 employees $600 million revenues CEO: David Eslick Web site: www.usi.biz USI Holdings was founded in Times; 11/18/99 Timber Ridge Financial Advisors Conversation (Flinn); Tiburon Research & Analysis 1994 and has evolved through three phases, including its early, middle, and integration & acquisition phases. Early Phase This section includes USI Holdings early phase. USI Holdings was founded in 1994 and is based in Briarcliff Manor, NY. Middle Phase This section includes USI Holdings middle phase. Source: 9/12/07 USI Holdings Web Site; 8/2/02 San Francisco Business Times; 1/25/02 San Francisco Business Times; 11/26/99 S an Francisco B usiness 235

Recent Phase This section includes USI Holdings recent phase. USI Holdings slowed pace 1999-2001 to focus on integration as prices went up; plans to start acquiring again soon. Statistics The second section of USI Holdings profile will review some key statistics regarding the firm. USI Holdings has acquired over 100 property & insurance agencies. USI Holdings has made property & casualty insurance agencies acquisitions. USI Holdings has 2,900 employees, stable for the past five years. USI Holdings generates $600 million revenues. USI Holdings Has 2,900 Employees, Stable For the Past Five Years USI Holdings Employees 3,000 2,900 USI Holdings generates 40% of revenues from property & casualty insurance. Businesses The third section of USI Holdings profile will outline its core businesses. 2002 2007 Source: 9/12/07 USI Holdings Web Site; 8/2/02 San Francisco Business Times; 1/25/02 San Francisco Business Times; 11/26/99 S an Francisco B usiness Times; 11/18/99 Timber Ridge Financial Advisors Conversation (Flinn); Tiburon Research & Analysis USI Holdings has a number of businesses, including financial services, property & casualty, and health & welfare. Financial Services USI Holdings first business is financial services. Property & Casualty USI Holdings second business is property & casualty. Health & Welfare USI Holdings third business is health & welfare. USI Holdings wants to cross-sell its human resources, employee benefits, and other products as property & casualty insurance margins remain thin. Organization & Ownership The final section of USI Holdings profile will address its organizational structure of ownership. 236

USI Holdings has seven sections on its web site, including why USI, products & services, locations, USI marketplace, USI family of companies, investor relations, and industry news. USI Holdings is led by its CEO David Eslick. USI Holdings is well capitalized, investors include Axa Group, Capital Z Partners, CNA Financial, Credit Lyonnais, JP Morgan Chase, Travelers Insurance, UNUM Provident, and Zurich Financial Services. USI Holdings is owned by Goldman Sachs. Willis Group Holdings Willis Group was founded in 1946 and is based in London, England. Company has 13,500 reps, generates $2.4 billion revenues and $449 million net income. Willis Group is led by its CEO, Joseph Plumeri. Willis Holdings is a publicly traded company on the New York Stock Exchange under the symbol WSH. Willis Group Holdings Limited Comments Founded in 1946 Based in London, England 13,500 reps $2.4 billion in revenues $449 million net income CEO: Joseph Plumeri Public company: (NYSE Ticker: WSH) Web site: www.willis.com History The first section of Willis Group Holdings profile will explain the key historical events in the firm s development. Source: 7/17/07 Willis Group Web Site; 6/22/01 Financial Times; Tiburon Research & Analysis Willis Group was founded in 1946 and has evolved through three phases, including its early, middle, and IPO phase. Early Phase This section includes Willis Group Holdings early phase. Willis Group was founded in 1946. Middle Phase This section includes Willis Group Holdings middle phase. Recent Phase This section includes Willis Group Holdings recent phase. Willis Group held its IPO in 2000 and raised $270 million. Willis Group is the third largest insurance broker. Statistics The second section of Willis Group Holdings profile will review some key statistics regarding the firm. 237

Willis Group has over 13,500 reps. Willis Group generates over $2.4 billion revenues, relatively stable over the past three years. Willis Group earns almost $450 million, recovering from a 25% decrease in 2005. Businesses The third section of Willis Group Holdings profile will outline its core businesses. Willis Group has three geographical businesses, including Global, North America, and International. Willis Group Earns Almost $450 Million, Recovering From a 25% Decrease in 2005 $402 Willis Group Net Income ($ Millions) $281 $449 2004 2005 2006 Global Willis Group s first business is its Global segment. Source: 3/31/07 Willis Group Annual Report; Tiburon Research & Analysis North America Willis Group s second business is its North America segment. Willis Group represents all major life & health and property & casualty carriers. International Willis Group s third business is its International segment. Organization & Ownership The final section of Willis Group Holdings profile will address its organizational structure of ownership. Willis Group web site has five sections, including who we are, what we do, the way we do business, Willis careers, and investor relations. Willis Group is led by its CEO Joseph Plumeri. Willis Group is a publicly traded company. Woodruff-Sawyer & Company Woodruff-Sawyer is based in San Francisco, CA. Company has 236 reps, $544 million premiums, and $48 million revenues. History The first section of Woodruff-Sawyer s profile will explain the key historical events in the firm s development. 238

Woodruff-Sawyer has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Woodruff- Sawyer s early phase. Woodruff-Sawyer & Company Comments Based in San Francisco, CA 236 reps $544 million premiums $48 million revenues Web site: www.woodruff-sawyer.com Middle Phase This section includes Woodruff- Sawyer s middle phase. Recent Phase This section includes Woodruff- Sawyer s recent phase. Source: 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis Statistics The second section of Woodruff-Sawyer s profile will review some key statistics regarding the firm. Woodruff-Sawyer has over 230 reps. Woodruff-Sawyer generates over $540 million premiums. Woodruff-Sawyer generates over $48 million revenues. Businesses The third section of Woodruff-Sawyer s profile will outline its core businesses. Woodruff-Sawyer has a number of businesses. Woodruff-Sawyer represents over 96 life & health and over 188 property & casualty carriers. Organization & Ownership The final section of Woodruff-Sawyer s profile will address its organizational structure of ownership. Woodruff-Sawyer has a web site. Woodruff-Sawyer is led by its CEO. Woodruff-Sawyer is privately owned. Profiles of Independent Agencies, Brokers, & Producer Groups This section outlines profiles of independent agencies, brokers, & producer groups. American Brokerage Consultants American brokerage consultants was founded in 1987 and is based in Saint Petersburg, FL. The company is run by its CEO, Dick Ayotte. 239

History The first section of American Brokerage Consultants profile will explain the key historical events in the firm s development. American brokerage consultants was founded in 1987 and has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes American Brokerage Consultants early phase. American brokerage consultants was founded in 1987. The firm is based in Saint Petersburg, FL. Middle Phase This section includes American Brokerage Consultants middle phase. Recent Phase This section includes American Brokerage Consultants recent phase. Statistics The second section of American Brokerage Consultants profile will review some key statistics regarding the firm. Businesses The third section of American Brokerage Consultants profile will outline its core businesses. American Brokerage Consultants has two business, including consulting and research. Consulting American Brokerage Consultants first business is consulting services. American Brokerage Consultants consulting services include banking institutions, third party marketers, product vendors; and mergers & acquisitions of third-party marketing companies. Research American Brokerage Consultants second business is research services. American Brokerage Consultants research services include market surveys and competitive intelligence. Organization & Ownership The final section of American Brokerage Consultants profile will address its organizational structure of ownership. American Brokerage Consultants web site has five sections, including about, services, publications, clients, and contacts. 240

American brokerage consultants corporation is led by Richard Ayotte. Richard Ayotte founded American Brokerage Consultants in 1987 and manages the company s management and consulting activities. American brokerage consultants is owned by Richard Ayotte. Annuitynet.Com Annuitynet.com was founded 1997 and is based in Leesburg, VA. Group is run by its president, Shane Chalke. History The first section of Annuitynet.Com s profile will explain the key historical events in the firm s development. AnnuityNet.com Comments Founded 1997 Based in Leesburg, VA President: Shane Chalke Web sites: www.annuitynetadvisor.com and www.annuitynet.com Annuitynet.Com was founded in 1997 and has evolved through three phases, including early, middle, and recent phases. Source: 7/17/07 AnuityNet.com Web Site; 12/26/00 AnnuityNet.com Brochure; 6/99 Business Week; Tiburon Research & Analysis Early Phase This section includes Annuitynet.Com s early phase. Middle Phase This section includes Annuitynet.Com s middle phase. Recent Phase This section includes Annuitynet.Com s recent phase. Annuitynet.Com operates internet site that sells variable annuities online. Annuitynet.Com is attempting to make annuities easier and cheaper. Statistics The second section of Annuitynet.Com s profile will review some key statistics regarding the firm. Businesses The third section of Annuitynet.Com s profile will outline its core businesses. Annuitynet.Com has a number of businesses. Organization & Ownership The final section of Annuitynet.Com s profile will address its organizational structure of ownership. Annuitynet.Com has five sections on its web site, including annuity distributors, annuity manufacturers, media, advisors, and individual investors. 241

Annuitynet.Com is led by Shane Chalke. Annuitynet.Com is owned by Shane Chalke. Banksurance.com Banksurance.com is based in Providence, RI. History The first section of Banksurance.com s profile will explain the key historical events in the firm s development. Banksurance.Com has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Banksurance.com s early phase. Middle Phase This section includes Banksurance.com s middle phase. Recent Phase This section includes Banksurance.com s recent phase. Banksurance.Com provides resources for insurance products, back-office software, and marketing services & support. Banksurance.Com provides banks of all sizes with the products and support necessary for selling insurance through new or enhanced sales programs. Statistics The second section of Banksurance.com s profile will review some key statistics regarding the firm. Businesses The third section of Banksurance.com s profile will outline its core businesses. Banksurance.Com has a number of businesses. Organization & Ownership The final section of Banksurance.com s profile will address its organizational structure of ownership. Banksurance.Com web site has nine sections, including what is banksurance, bank management, bank reps & agents, compliance officers, products & services, banksurance university, online survey, free updates, and about the company. Banksurance.Com is led by its CEO. Banksurance.Com is privately owned. 242

Capitas Financial Capitas Financial was founded in 2001 and is based in Minneapolis, MN. History The first section of Capitas Financial s profile will explain the key historical events in the firm s development. Capitas Financial Comments Founded in 2001 Based in Minneapolis, MN Web Site: www.capitasfinancial.com Capitas Financial was founded in 2001 and has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Capitas Financial s early phase. Capitas Financial was founded in 2001. Middle Phase This section includes Capitas Financial s middle phase. Recent Phase This section includes Capitas Financial s recent phase. Statistics The second section of Capitas Financial s profile will review some key statistics regarding the firm. Businesses The third section of Capitas Financial s profile will outline its core businesses. Capitas Financial has a number of businesses, including its annuities and long-term care businesses. Annuities Capitas Financial s first business is annuities. Long-Term Care Capitas Financial s second business is long-term care. Source: 9/18/07 Capitas Financial Web Site; 12/22/05 Capitas Financial Web Site; 12/21/05 Conversation (Beck); Tiburon Research & Analysis Organization & Ownership The final section of Capitas Financial s profile will address its organizational structure of ownership. Capitas Financial web site has nine sections, including about Capitas, history, mission, management, partners, careers, producer center, annuities, and long-term care. 243

Capitas financial is led by its executive director Blake Mohr. Capitas financial is privately owned. CentreLink CentreLink was founded and offers a wide variety of products. History The first section of CentreLink s profile will explain the key historical events in the firm s development. Centrelink has evolved through three phases, including its early, middle, and recent phases. Early Phase This section includes CentreLink s early phase. Middle Phase This section includes CentreLink s middle phase. Recent Phase This section includes CentreLink s recent phase. Statistics The second section of CentreLink s profile will review some key statistics regarding the firm. Businesses The third section of CentreLink s profile will outline its core businesses. Centrelink has a number of businesses. Organization & Ownership The final section of CentreLink s profile will address its organizational structure of ownership. Centrelink has a web site. Centrelink is led by its CEO. Centrelink is privately owned. Citigroup Citigroup was formed in 1988 merger of Citicorp and Travelers. Its underlying company, City Bank of New York was founded in 1812 and is based in New York, NY. The company has 287,000 employees, 200 million accounts, $2.02 trillion assets, $794 billion deposits, $86.2 billion revenues, and $17 billion net income. Citigroup is led by its CEO Vikram Pandit and publicly traded on the New York Stock Exchange under the ticker symbol: C. 244

History The first section of Citigroup s profile will explain the key historical events in the firm s development. Businesses The second section of Citigroup s profile will outline its core businesses. Ascensus Citigroup s Bisys subsidiary Ascensus Insurance Services was acquired in 2000. The business is utilized as GA for fixed business by the Planners Network. Ascensus has nine offices including one in San Francisco and two in Los Angeles. Company provides one stop shopping: licensing, hypotheticals, and underwriting. Ascensus is responsible for contracting with all of the insurance products and also in presenting the materials and assisting in case placement to give all agents access to a large number of insurance companies. Citigroup s Bisys Subsidiary Ascensus Insurance Services was Acquired in 2000 Comments Acquired by Bisys in 2000 Utilized as GA for fixed business by The Planners Network Nine offices including one in San Francisco and two in Los Angeles Provides one stop shopping: licensing, hypotheticals, and underwriting Responsible for contracting with all of the insurance products and also in presenting the materials and assisting in case placement to give all agents access to a large number of insurance companies Source: 11/22/04 Bisys Web Site; 3/29/00 The Planners Network Web Site; Tiburon Research & Analysis 1 Organization & Ownership The final section of Citigroup s profile will address its organizational structure of ownership. Citigroup is led by Vikram Pandit and includes a deep management team. The management team includes Steven Frieberg, co-ceo of the global consumer group, Ajay Banga, co-ceo of the global consumer group, Bob Willumstad, The president and chief operating officer, Thomas Maheras, CEO of global markets and investment banking, Todd Thomson, CEO of global wealth management, Michael Carpenter, CEO of global investments, Sallie Krawcheck, chief financial officer and head of strategy, Debby Hopkins, chief technology officer, Frank Bisignano, CEO of global transaction services and investment banking, and Lewis Kaden, chief accounting officer. Chuck Prince became CEO in 2003; he was formerly head of Smith Barney s Banking & Securities operation; prior to that, he served as Citigroup s chief legal counsel & COO; Michael Carpenter had become a hero for melding Citigroup s corporate and investment banking, left in 2002 after the stock analysts scandal, and was formerly CEO of Citigroup s Global Corporate & Investment Bank; Marge Magner joined CitiFinancial and has been CEO of the Global Consumer Group since 2003; Bob Willumstad joined CitiFinancial in 1987, was formerly CEO of Travelers Group Consumer Finance, and CEO of Citigroup s Global Consumer Group; Thomas Maheras was formerly head of Citigroup s Global Fixed Income Group; Todd Thomson joined Citigroup in 1998 and formerly was CFO and Head of Operations, Technology, & Strategy for Citigroup and was CEO of Citigroup s Global Private Bank prior to that; Sallie Krawcheck joined Citigroup in 2002 as CEO of Smith Barney and was formerly at Sanford Bernstein; Deborah Hopkins was previously senior partner at Marakon Associates; Frank Bisignano 245

joined Smith Barney in 1994 and was formerly at First Fidelity Bancorporation; Lewis Kaden comes from Davis Polk & Wardwell. Recently departed executives include CEO Sandy Weill, Sandy Weill protégé Jamie Dimon in 1998, Co-CEO John Reed in 2000, and former Chief Marketing Officer Steve Cone; Victor Menezes lost his job as head of emerging markets in 2002 after the Argentina crisis. Clark & Bardes Holdings Clark & Bardes was founded in 1974 and is based in Dallas, TX. Company has 3,400 clients, 37 employees, and generates $9 million revenues. Clark & Bardes is led by its CEO, Tom Wamberg. Clark & Bardes completed $26 million IPO in 1998. History The first section of Clark & Bardes Holdings profile will explain the key historical events in the firm s development. Clark & Bardes has evolved through three phases, including its early, middle, and recent phases. Early Phase This section includes Clark & Bardes Holdings early phase. Middle Phase This section includes Clark & Bardes Holdings middle phase. Recent Phase This section includes Clark & Bardes Holdings recent phase. Statistics The second section of Clark & Bardes Holdings profile will review some key statistics regarding the firm. Businesses The third section of Clark & Bardes Holdings profile will outline its core businesses. Clark & Bardes has a number of businesses. Organization & Ownership The final section of Clark & Bardes Holdings profile will address its organizational structure of ownership. Clark & Bardes has a web site. Clark & Bardes is led by its CEO. Clark & Bardes is a publicly traded company. Conseco Conseco was founded in 1979 and is based in Carmel, IN. Company has 2,200 employees, 5 million customers, and generates $4 billion revenues. Conseco is led by its CEO Bill Kirsch. Company went public in 1985. 246

History The first section of Conseco s profile will explain the key historical events in the firm s development. Conseco was founded in 1979 and has evolved through three phases, including its early, middle, and recent phase. Businesses The second section of Conseco s profile will outline its core businesses. Townsend & Schupp Townsend & Schupp is based in Hartford, CT and is a life insurance industry consultant. Company is run by its CEO, Fred Towsend. Organization & Ownership The final section of Conseco s profile will address its organizational structure of ownership. Conseco is led by William Kirsch, along with Eugene Bullis, John Kline, Russell Bostick, James Hohmann, and Ronald Ruhl. Conseco is a public company. Conseco s share price began falling in the second half of 2004, due to ongoing management problems. CPS Insurance Services CPS Insurance Services is based in Irvine, CA. History The first section of CPS Insurance Services profile will explain the key historical events in the firm s development. CPS insurance services has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes CPS Insurance Services early phase. Middle Phase This section includes CPS Insurance Services middle phase. Recent Phase This section includes CPS Insurance Services recent phase. Statistics The second section of CPS Insurance Services profile will review some key statistics regarding the firm. CPS Insurance has 30 independent brokers. 247

Businesses The third section of CPS Insurance Services profile will outline its core businesses. CPS insurance services has six businesses, including annuities, disability income, life, life settlement, long-term care, and underwriting. CPS Insurance Services first business is annuities. CPS Insurance Services Has Six Businesses, Including Annuities, Disability Income, Life, Life Settlement, Long-Term Care, and Underwriting CPS Insurance Services Businesses CPS Insurance Services Business CPS Insurance Services second business is disability income. Disability Annuities Life Life Settlement Income Long-Term Care Underwriting CPS Insurance Services third business is life insurance. Source: 9/18/07 CPS Insurance Web Site; Tiburon Research & Analysis CPS Insurance Services fourth business is life settlement. CPS Insurance Services fifth business is long-term care. CPS Insurance Services sixth business is underwriting. Organization & Ownership The final section of CPS Insurance Services profile will address its organizational structure of ownership. CPS Insurance Services has five sections on its web site, including about CPS, applications & forms, businesses, online resources, and career opportunities. CPS Insurance Services insurance is led by its CEO. CPS Insurance Services is a privately owned company. Diversified Brokerage Services Diversified Brokerage Services is based in Minneapolis, MN. Company is used by AEFA and provides agents and brokers turnkey service from development of needs into product concepts. Diversified Brokerage Services is led by its CEO George Van Dusen. History The first section of Diversified Diversified Brokerage Services Comments Based in Minneapolis, MN Used by AEFA Provides agents and brokers turnkey service from development of needs into product concepts CEO: George Van Dusen Web site: www.dbs-lifemark.com Source: 4/22/05 Diversified Brokerage Services Web Site; 11/6/00 HD Vest Project Meeting (Klein); Tiburon Research & Analysis 248

Brokerage Services profile will explain the key historical events in the firm s development. Diversified Brokerage Services has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Diversified Brokerage Services early phase. Middle Phase This section includes Diversified Brokerage Services middle phase. Recent Phase This section includes Diversified Brokerage Services recent phase. Statistics The second section of Diversified Brokerage Services profile will review some key statistics regarding the firm. Businesses The third section of Diversified Brokerage Services profile will outline its core businesses. Diversified Brokerage Services has a number of businesses. Organization & Ownership The final section of Diversified Brokerage Services profile will address its organizational structure of ownership. Diversified Brokerage Services has a web site. Diversified Brokerage Services is led by George van Dusen, along with Nancy Dunivin, Tori van Dusen, and Chip van Dusen. Diversified Brokerage Services is privately owned. Elar Partners Elar Partners is based in Woodland Hills, CA. The company is an independent broker group and has a joint venture with Hartford Life Insurance. History The first section of Elar Partners profile will explain the key historical events in the firm s development. Elar Partners was founded has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Elar Partners early phase. Middle Phase 249

This section includes Elar Partners middle phase. Recent Phase This section includes Elar Partners recent phase. Statistics The second section of Elar Partners profile will review some key statistics regarding the firm. Businesses The third section of Elar Partners profile will outline its core businesses. Elar Partners has a number of businesses. Organization & Ownership The final section of Elar Partners profile will address its organizational structure of ownership. Elar Partners has a web site. Elar Partners is led by its CEO. Elar Partners is privately owned. Insure.Com Insure.com was founded in 1984 as Quotesmith. The company is based in Darien, IL and has 110 employees with $16 million in sales. Insure.com sells term insurance from 200 companies. Company operates online service which is an online consumer insurance information service that caters to the needs of self-directed insurance shoppers. Insure.com provides an array of comparative auto, life and health quotes. Company is led by its CEO, Robert Bland. Stock listing moved form the NASDAQ National Markets to the NASDAQ Small Cap Market because it did not maintain $5 million of public float. History The first section of Insure.Com s profile will explain the key historical events in the firm s development. Insure.Com was founded in 1984 and has evolved through three phases, including its early, middle, and recent phase. Early Phase Insure.com Comments Founded in 1984 Founded as Quotesmith Based in Darien, IL 110 employees $16 million in sales Sells term insurance from 200 companies Operates online service An online consumer insurance information service that caters to the needs of self-directed insurance shoppers Insure.com provides an array of comparative auto, life and health quotes Stock listing moved form the NASDAQ National Markets to the NASDAQ Small Cap Market because it did not maintain $5 million of public float CEO: Rebert Bland Web sites: www.quotesmith.com and www.insure.com S ource: 4/25/05 Quotesmith Web Site; 11/29/04 Insure.com Web Site; 7/23/01 Insurance Letter; 6/22/01 Quotesmith Mailing; 4/17/98 Quotesm ith M aili ng; Tiburon Research & Analysis 250

This section includes Insure.Com s early phase. Middle Phase This section includes Insure.Com s middle phase. Recent Phase This section includes Insure.Com s recent phase. Statistics The second section of Insure.Com s profile will review some key statistics regarding the firm. Insure.Com has $16 million in sales. Businesses The third section of Insure.Com s profile will outline its core businesses. Insure.Com has multiple businesses. Organization & Ownership The final section of Insure.Com s profile will address its organizational structure of ownership. Insure.Com has a web site. Insure.com is led by its CEO Robert Bland. Insure.com is public company. INSWEB INSWEB is based in Gold River, CA. History The first section of INSWEB s profile will explain the key historical events in the firm s development. INSWEB has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Insure INSWEB s early phase. Middle Phase This section includes Insure INSWEB s middle phase. Recent Phase This section includes Insure INSWEB s recent phase. INSWEB and software companies see the insurance industry scandal as an opportunity. Several software companies already produce products that could automate the insurance bidding process where insurance buyers could bypass brokers altogether. In 251

this system insurance providers would bid in a reverse auction process. The system also forces insurance providers to all bid on the same insurance package. Bids can be compared on an apples-to-apples basis. Statistics The second section of Insure INSWEB s profile will review some key statistics regarding the firm. Businesses The third section of Insure INSWEB s profile will outline its core businesses. INSWEB Has Nine Business, Including Auto, Life, Homeowners, Health, Renters, Motorcycle, RV, Travel, and Business Insurance INSWEB Businesses INSWEB has nine business, including auto, life, homeowners, health, renters, motorcycle, RV, travel, and business insurance. Auto Insurance Life Insuran ce Homeowners Insurance Health Insurance INSWEB Businesses Renters Insu rance M otor cycle Insurance RV Insuran ce T ravel Insurance Busin ess Insurance INSWEB s first business is auto insurance. INSWEB s second business is life insurance. Source: 9/18/07 INSWEB Web Site; Tiburon Research & Analysis INSWEB s third business is homeowners. INSWEB s fourth business is health insurance. INSWEB s fifth business is renters insurance. INSWEB s sixth business is motorcycle insurance. INSWEB s seventh business is RV insurance. INSWEB s eighths business is travels insurance. INSWEB s ninths business is business insurance Organization & Ownership The final section of Insure INSWEB s profile will address its organizational structure of ownership. INSWEB has six sections on its web site, including insurance quotes, my INSWEB account, learning center, insurance tools, other products & services, and learn more. INSWEB is led by its CEO. INSWEB is owned by its shareholders. 252

M Financial M Financial was founded in 1978 and is based in Portland, OR. The company generates $957 million revenues and is led by CEO Fred Jonske. History The first section of M Financial s profile will explain the key historical events in the firm s development. M Financial Group Comments Founded in 1978 Based in Portland, OR $957 million revenues CEO: Fred Jonske Web site: www.mfin.com M Financial Group was founded in 1978 and has evolved through three phases, including the early, middle and recent phase. Source: 4/28/08 Investment News; 5/23/05 M F inancial Group Web Site; 4/25/05 Investment News; 8/14/02 CMS Companies E mail (Landm an); 6/19/00 Investment News; 2/22/00 M Financial Group Conversation (Spitzer); 12/1/99 MDE Group Meeting (Eichen); Tiburon Research & Analysis M Financial Group was founded in 1978 in an effort to provide superior insurance products for the ultra-affluent and corporate markets. Early Phase This section includes M Financial Group s early phase. Middle Phase This section includes M Financial Group s middle phase. Recent phase This section includes M Financial Group s recent phase. M Financial Group began building proprietary insurance products for the ultra affluent market in 1995. M Financial Group recapitalized and converted from a general partnership to a holding company in 1997, paying $25 million in dividends to the original stockholders. M Financial Group has lost several member firms who sold out to NFP, Highland Capital, Wachovia, and other firms. M Financial Group acquired its second largest agency, management compensation group Northwest. M Financial Group was able to raise debt and private equity from its insurance carriers. M Financial Group will survive, but whether it will remain an independent firm is still to be determined. M Financial Group hired Goldman Sachs and Price Waterhouse Coopers to help advice it on a IPO or other strategic alternative. 253

M Financial Group is experiencing some maturity issues as the business expands. M Financial Group has some concerns that some of the members are owned by third parties, which decreases the exclusiveness of the group. M Financial Group may now be a take-over candidate itself. M Financial Group considered a roll-up strategy but passed. M Financial Group s Mullin Consulting Group could also become an acquirer. M Financial Group wants to add family office members. Statistics This section of M Financial s profile will outline its statistics. M Financial Group has a large number of corporate office employees. M Financial Group generated $957 million revenues, up about 10% since 2004. Businesses This section of M Financial s profile will outline its core businesses. M Financial Group Has Three Businesses Including its Insurance Producers Group, Insurance Manufacturing Group, and Independent Broker/Dealer M Holdings Securities M Financial Groups Businesses M Financial Group has three businesses including its insurance producers group, insurance manufacturer, and independent broker/dealer M Holdings Securities. Insurance Producers Group M Financial Group Insurance Manufacturering M Holdings Securities Insurance Producers Group M Financial Group s first business is its Insurance Producers Group. Source: 5/23/05 M Financial Group Web Site; 4/25/05 Investment News; Tiburon Research & Analysis M Financial Group has 100 independent life insurance producing firms. M Financial Group has many insurance producer group member firms, including CMS Companies. M Financial Group is currently trying to grow still. M Financial Group has an absorption rate, which really only allows a maximum of 10 groups to join per year. M Financial Group key driver for most groups to join is the growth rate they will experience after becoming a member. 254

M Financial Group s key for creating exclusiveness is the ability to not depend on getting other procuers; the managing partners all came on as producers there is no pressure to sign up other groups. M Financial Group was successful because they were able to get exclusive deals with carriers and built unique products that the rest of the industry had no access to. M Financial Group s managing partners were well respected in the industry, and having them create their independent company gave a lot of other producers courage to leave. M Financial Group has 400 individual producers. M Financial Group has $550 million revenues. Insurance Manufacturer M Financial Group s second business is its insurance manufacturer. M Financial Group s insurance manufacturing business has $45 billion life insurance inforce. M Financial Group s insurance manufacturing business has $530 million premiums. M Holdings Securities M Financial Group s third business is M Holdings Securities. M holding Securities is based in Portland, OR; has 36 employees, 120 rep offices, 547 reps; 59,600 client accounts, and $36 billion assets under administration. Company generates $149.8 million revenues and is led by its CEO Randy O'Connor. M Financial Group's M Holdings Securities has 36 corporate employees, up 70% since 2001-2005. M Financial Group's M Holdings Securities Has 36 Corporate Employees, Up 70% Since 2001-2005 M Holdings Securities Corporate Office Employees M Financial Group's M Holdings Securities has 128 rep offices. 28 36 M Financial Group's M Holdings Securities has 547 reps, up over 100% since 2001 but relatively flat since 2004. M Financial Group's M Holdings Securities has nearly two reps per office, which has been consistent since 2001. 21 21 21 21 21 2001 2002 2003 2004 2005 2006 2007 Source: 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; Tiburon Research & Analysis M Financial Group's M Holdings Securities has one-quarter of reps that are OSJ managers, consistent since 2001. 255

M Financial Group's M Holdings Securities has three-quarters of its reps with Series 7 licenses, consistent since 2001. M Financial Group's M Holdings securities has 35 reps with the CFP designation, up from 10 in 2006. M Financial Group's M Holdings Securities has 2% of its reps with CFPs. M Financial Group's M Holdings Securities has 185 reps producing more than $100,000 per year, up 30% since 2001-2004. M Financial Group's M Holdings Securities top ten reps median production is $2.5 million. M Financial Group's M Holdings Securities has one-third of its reps producing more than $100,000 per year, off from its peak of 51% in 2002. M Financial Group's M Holdings Securities Has 185 Reps Producing More than $100,000 Per Year, Up 30% Since 2001-2004 M Holdings Securities Reps Producing More than $100,000 142 142 142 142 155 183 185 2001 2002 2003 2004 2005 2006 2007 Source: 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; Tiburon Research & Analysis M Financial Group's M Holdings Securities has 59,600 client accounts, up over 100% since 2001-2002. M Financial Group's M Holdings Securities has 85 accounts per rep, down more than 25% since a peak in 2003. M Financial Group's M Holdings Securities has $37 billion assets under administration, up 50% since 2001. M Financial Group's M Holdings Securities has more than $60 million assets under administration per rep, which is down slightly since 2001. M Financial Group's M Holdings Securities Generates $150 Million Revenues, Up Over 80% Since 2001-2002 M Holdings Securities Revenues ($ Millions) $150 M Financial Group's M Holdings Securities generates $150 million revenues, up over 80% since 2001-2002. $81 $81 $84 $93 $107 $117 M Financial Group's M Holdings Securities generates $274,000 revenues per rep, consistent since 2001 but up 60% since lows in 2004-2005. 2001 2002 2003 2004 2005 2006 2007 Source: 4/28/08 Investment News; 12/31/06 Financial Planning; 12/18/06 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial P lanning; 6/04 Investment A dvisor; 6/04 F inancial Advisor; 4/5/04 Investment News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 FinancialPlanning; 6/03 On Wall Street; Tiburon Research & Analysis 256

M Financial Group's M Holdings Securities generates nearly all of its revenues from commissions, although fee-accounts have been increasing as a share of revenues since 2001. M Financial Group's M Holdings Securities has $7.0 million expenses, consistent since 2006. M Financial Group's M Holdings Securities average rep payout is $357,000, up 30% since 2006. M Financial Group's M Holdings Securities generates 0.28% return on assets, which is down from 0.43% in 2001. M Financial Group's M Holdings Securities Average Rep Payout is $357,000, Up 30% Since 2006 $277 M Holdings Securities Average Rep Payout ($ Thousands) $357 M Financial Group's M Holdings Securities has increased its net income since 2001. M Financial Group's M Holdings Securities reps invest client 2006 Source: 4/28/08 Investment News; Tiburon Research & Analysis 2007 assets in a wide variety of 54 products, including 40% in mutual funds, 30% in annuities, 20% in fee-accounts, and 10% in individual securities & other products. M Financial Group's M Holdings Securities mutual funds and fee-accounts account for half of revenues, which has been consistent since 2001. M Financial Group's M Holdings Securities offers mutual funds from mutual fund families. M Financial Group's M Holdings Securities offers mutual funds. M Financial Group also manages a proprietary family of mutual funds called M funds available only to M Financial Group clients and with assets exceeding $500 million. M Financial Group has over $500 million in assets in its proprietary mutual funds. M Financial Group's M Holdings Securities generates $27 million mutual fund revenues, up 10% since 2001. M Financial Group's M Holdings Securities has relationships with variable & fixed annuity providers. M Financial Group's M Holdings Securities offers variable & fixed annuities. M Financial Group's M Holdings Securities has variable & fixed annuity assets. M Financial Group's M Holdings Securities offers proprietary variable & fixed annuities. 257

M Financial Group's M Holdings Securities generates $24 million in variable & fixed annuity revenues, up 20% since 2001. M Financial Group's M Holdings Securities has a fee-accounts business. M Financial Group's M Holdings Securities has 128 reps who utilize its fee-account programs, up 10% since 2006. M Financial Group's M Holdings Securities Has 128 Reps Who Utilize its Fee-Account Programs, Up 10% Since 2006 M Holdings Securities Reps Utilizing Fee-Account Programs M Financial Group's M Holdings Securities has one-fifth of its reps utilizing its fee-account program, consistent since 2005. 116 128 M Financial Group's M Holdings Securities has $500 million in fee-account assets under management, consistent since 2006. Source: 4/28/08 Investment News; Tiburon Research & Analysis M Financial Group's M Holdings Securities generates $6.0 million in fee-accounts revenues, up 25% since 2006. M Financial Group's M Holdings Securities fee-account programs are average. M Financial Group's M Holdings Securities offers separately managed account program. M Financial Group's M Holdings Securities offers multiple style portfolio program. M Financial Group's M Holdings Securities offers unified managed account program. M Financial Group's M Holdings Securities offers mutual fund wrap account program. M Financial Group's M Holdings Securities offers broker wrap account program. M Financial Group's M Holdings Securities offers fee-based brokerage account program. M Financial Group's M Holdings Securities provides guidelines for discounting on its program. M Financial Group's M Holdings Securities has RIA policy. M Financial Group's M Holdings Securities has more than 10% of reps that provide services through their own RIA, which has remained consistent since 2001. M Financial Group's M Holdings Securities offers a selection of individual securities. M Financial Group's M Holdings Securities clears through Pershing. M Financial Group's M Holdings Securities has IPO access. 2006 2007 71 258

M Financial Group's M Holdings Securities offers individual securities research. M Financial Group's M Holdings Securities offers mutual funds research. M Financial Group's M Holdings Securities individual securities commission schedule varies. M Financial Group's M Holdings Securities offers five life Insurance offerings, including term life; fixed, whole, or traditional Life; fixed universal life, variable life, and variable universal life. M Financial Group has also partnered with a series of premier insurance companies to create exclusive products for M Financial Group clients. Partners include: John Hancock Financial Services, Lincoln Financial Group, Pacific Life Insurance, Prudential Financial, UnumProvident, Genworth Financial, ING Life Companies, Lincoln Benefit Life, and Standard Insurance Company. M Financial Group s M Holding Securities offers proprietary life insurance offerings. M Financial Group s M Holding Securities has policies regarding outside direct insurance sales. M Financial Group s M Holding Securities offers long-term care & disability insurance. M Financial Group s M Holding Securities has expanded its alternative investments offerings. M Financial Group s M Holding Securities also offers other products & services. M Financial Group's M Holdings Securities pays out 95% on mutual funds & limited partnerships across all production levels. M Financial Group's M Holdings securities pays out between 94% and 98% on variable annuities & insurance across all rep production levels. M Financial Group's M Holdings Securities Pays Out 95% on Mutual Funds & Limited Partnerships Across All Production Levels M Holdings Securities Mutual Fund & Limited Partnership Payouts 95% 95% 95% 95% 95% M Financial Group's M Holdings Securities pays out between 95% and 100% on securities depending on rep production level. $0-$249,999 $250,000- $499,999 Source: 4/28/08 Investment News; Tiburon Research & Analysis $500,000- $749,999 $750,000- $999,999 $1,000,000+ 100 M Financial Group's M Holdings Securities fee-account administration fees are standard. 259

M Financial Group's M Holdings Securities transaction fees and/or ticket charges are average. M Financial Group's M Holdings Securities rep fees are average. M Financial Group's M Holdings Securities customer service is average. M Financial Group's M Holdings Securities operations departments include licensing, new accounts, account transfers, and legal & compliance. M Financial Group's M Holdings Securities product support includes mutual funds, annuities, fee-accounts, and life & other insurance products. M Financial Group's M Holdings Securities sales & marketing support includes ads, newsletter, brochures, and direct mailings. M Financial Group's M Holdings Securities business has building support includes startup, marketing, staffing & compensation, benchmarking, and succession planning. M Financial Group's M Holdings Securities technology offerings include new client sales, calculators, financial planning, asset allocation, and stock quotes. M Financial Group's M Holdings Securities has top producers trips, annual conferences, & regional meetings. M Financial Group's M Holdings Securities has online training & other self-study offerings. Organization & Ownership The final section of M Financial s profile will address its organizational structure of ownership. M Financial Group web site has many sections, including about us, products & services, current events, home, & careers. M Financial Group is led by Fred Jonske. Management team also includes: Daniel Byrne, Chief Product & Technology Officer; Donald Friedman, CEO of M Benefit Solutions; Gerald Graves, Senior Vice President of M Wealth; Connie Morrison, Senior Vice President of Marketing, and Randall O Connor, Chief Financial Officer. M Financial Group is owned by its members. M Financial Group's M Holdings Securities Has $1.6 Million Net Excess Capital, Up Over 200% Since 2001 But Down 20% Since 2006 M Holdings Securities Net Excess Capital ($ Millions) $0.5 $0.5 $0.5 $0.2 $0.2 $2.0 $1.6 2001 2002 2003 2004 2005 2006 2007 Source: 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; Tiburon Research & Analysis 260

M Financial Group's M Holdings Securities has $1.6 million net excess capital, up over 200% since 2001 but down 20% since 2006. Marsh & McLennan Marsh & McLennan was founded in 1871 and is based in New York, NY. Company has presence in 100 countries with 55,000 employees and 30,000 clients. Marsh & McLennan generates $11.9 billion revenues and $990 million in net income. Company is a large property and casualty insurance company. Marsh & McLennan is nation s biggest risk and insurance broker for corporate clients (46% of total revenues); insures property of the wealthy. Marsh s Private Client Services Marsh & McLennan Companies division provides insurance for affluent individuals and families. Marsh & McLennan s subsidiary Marsh, Inc. brings together the services of Marsh & McLennan, Johnson & Higgins, and Sedgwick. Company is traded on the New York Stock Exchange under the symbol MMC. Marsh & McLennan is led by its Chairman, Robert F. Erburu and CEO, Michael Cherkasky. History The first section of Marsh & McLennan s profile will explain the key historical events in the firm s development. Marsh & McLennan was founded in 1871 and has evolved through three phases, including its early, acquisitions, and recent phase. Early Phase This section includes Marsh & McLennan s early phase. Marsh & McLennan was founded in 1871 to provide global risk management, risk consulting, insurance broking, financial solutions, and insurance program management services for businesses, public entities, associations, professional services organizations, and private clients. Marsh & McLennan subsidiary Mercer was founded in 1937. Company was founded in 1937 and is based in Los Angeles, CA. Mercer is a compensation consulting firm, specializing in technology employee compensation. Ads position firm as guiding the retention efforts of leading companies. Mercer changed named to Mercer Human Resources Consulting in 2002. Mercer HR Consulting is a part of Mercer Investment Consulting, a subsidiary of Marsh & McLennan Companies. Mercer Investment Consulting is one of the leading consultant firms for money managers. Marsh & McLennan's Temple Barker & Sloane was founded. Comments Founded in 1871 Based in New York, NY 100 countries 55,000 employees 30,000 clients $34 billion premiums $11.9 billion in revenues $990 million in net income Large P&C insurance company Nation s biggest risk and insurance broker for corporate clients (46% of total revenues) Insures property of the wealthy Marsh s Private Client Services division provides insurance for affluent individuals and families Subsidiary Marsh, Inc. brings together the services of Marsh & McLennan, Johnson & Higgins, and Sedgwick NYSE: MMC Chairman: Robert F. Erburu CEO: Michael Cherkasky Web site: www.mmc.com Source: 3/31/07 Marsh & McLennan A nnual Report; 4/25/05 Marsh & McLennan Web Site; 11/26/04 Marsh & McLennan Web S ite; 7/9/01 Wall S treet Journal; 1/8/01 Forbes; 11/10/00 March Mac Press Release; 4/14/00 Marsh Website; 11/29/99 Barron s; Tiburon Research & Analysis 261

Marsh & McLennan's Strategic Planning Associates was founded. Marsh & McLennan's Mercer Management Consulting s Corporate Decisions was founded in 1983. Marsh & McLennan acquire Temple Barker & Sloane in 1987. Marsh & McLennan Purchased Strategic Planning Associates in 1990. Middle Phase This section includes Marsh & McLennan s middle phase. Marsh & McLennan acquired Johnson & Higgins in 1997. Marsh & McLennan acquired Sedgwick Group in 1998. Sedgwick Group is based in London England. Recent Phase This section includes Marsh & McLennan s recent phase. Marsh & McLennan s Mercer acquired Oliver Wyman and renamed it Mercer Oliver Wyman. The North America Retail Banking is led by its Director, David Osborn. Statistics The second section of Marsh & McLennan s profile will review some key statistics regarding the firm. Marsh & McLennan operates in over 100 countries. Marsh & McLennan has over 55,000 employees, a 10% decrease since 2004. Marsh & McLennan generates $34 billion premiums. Marsh & McLennan generates almost $12 billion revenues, constant for the past three years. Marsh & McLennan earns almost $1 billion net income, more than double from previous year. Marsh & McLennan recognizes that barriers such as voluminous and sensitive information make it difficult for clients to switch insurance brokers after renewal. Marsh & McLennan Generates Almost $12 Billion Revenues, Constant for the Past Three Years $7.0 Marsh & McLennan Revenues ($ Billions) $11.7 $11.6 $11.9 2000 2004 2005 2006 Source: 3/31/07 Marsh & McLennan Annual Report; 10/13/06 San Francisco Business Times (Thomas Pisarek); Tiburon Research & Analysis 262

Marsh & McLennan has been accused of rigging bids and accepting kickbacks from insurance providers. New York Attorney General Eliot Spitzer filed a civil suit that accused Marsh & McLennan of rigging bids, and directing clients business to selected insurers paying them special contingent commissions. Marsh & McLennan s CEO Jeffrey Greenberg was replaced by Michael Cherkasky, a former legal colleague of Spitzer s and donor to his reelection campaign. In 2005 Marsh settled with Spitzer for $850 million, roughly matching the amount they took in contingent commissions in 2003. Spitzer has begun pursuing criminal charges against key players in the scandal, both at Marsh and affiliated insurers. The SEC began investigating Marsh s private equity Trident funds. Marsh & McLennan was forced to stop accepting contingency fees in 2004; it is unclear how it will make-up for lost revenue. Marsh & McLennan may offset lost contingency commission revenues by charging clients higher fees or negotiating higher regular commissions from insurance companies. Commercial buyers should expect to see greater pricing transparency from brokers including which insurers the broker solicited, how the proposals differed, and why a particular insurer was recommended. Marsh & McLennan was forced to lay off 3,000 employees in 2004 in order to reduce expenses. Marsh & McLennan lost nearly $9 billion, or 40% of its market cap, in the days following the announcement of the civil suit. Marsh & McLennan exec Robert Steams was brought on criminal charges in a bid rigging lawsuit. He was Managing Director in Marsh s excess casualty broking unit and was with the company for 20 years as a director and broker. He plead guilty to criminal charges for involvement in bid rigging, and soliciting fake quotes from insurers between 2002 and 2004; first of many anticipated Marsh employees to plead guilty to criminal charges. Marsh & McLennan and the insurance industry has many people who played a large roles in the past for Eliot Spitzer s prosecution. Marsh & McLennan is by far the highest revenue generator amongst the top ten insurance brokers, with almost $4 billion. Marsh is fortunate that nearly half of its clients had already renewed their annual agreements prior to the civil suit announcement. Marsh & McLennan settled with Eliot Spitzer in 2005 for $850 million, well above the $232 million reserve it had set aside for the purpose in 2004. Marsh & McLennan will not pay any fines; rather, the $850 million is all required client retributions. 100,000 corporations and small businesses that bought new policies between 2001 and 2004 will be compensated. Marsh was accused of misinforming inquisitive clients that contingency commissions were 1-2%, whereas in actuality they were as high as 15%. Businesses paid must have bought policies offered by Marsh 263

because of contingent commissions. Companies will not need to prove harm done in order to get compensated. Marsh & McLennan s new CEO Michael Cherkasky went to great lengths to win back sentiment in the court of public opinion. In a full page advertisement printed in the New York Times Michael Cherkasky promised: On behalf of the 40,000 employees of Marsh, we pledge to lead the way in establishing and maintaining the highest standards of business conduct and client service. And to restore your trust. Marsh & McLennan next great expense will potential class action lawsuits in the resolution of the bid rigging scandal. Attorneys have begun to gather Marsh shareholders, who lost an aggregate of $9 billion dollars with the stock s decline, primarily after the announcement of Eliot Spitzer s suit against the company. They will argue that the extreme drop would have been avoided if it weren t for improper practices by Marsh. Marsh & McLennan s Board of Directors received below-average scores by the Corporate Library and Institutional Shareholder Services Group. Businesses The third section of Marsh & McLennan s profile will outline its core businesses. Marsh & McLennan has three business divisions, including risk & insurance, investment management, and consulting. Marsh & McLennan s two-thirds of revenues come from its risk & insurance businesses. Specifically, 61% of revenues are generated through risk & insurance business. Marsh & McLennan represents over 400 property & casualty carriers. Risk & Insurance Marsh & McLennan s risk & insurance s first subsidiary is Marsh. Marsh & McLennan s Marsh s first business is Kroll. Marsh & McLennan s Marsh s second business is Guy Carpenter. Investment Management Marsh and McLennan s second line of business is investment management and Putnam is Marsh & McLennan s sole investment management company. Putnam is based in Boston, MA and was founded in 1937. Company has 78 mutual funds, $196 billion assets under management. Company plays limited role in separately managed accounts (currently reviewing several of its asset classes for possible entry into the managed accounts market). Also considering offering separately managed accounts in insurance wrappers. Putnam generates $1.7 billion revenues. Company is currently working on a complete set of marketing and communication literature for advisors within Putnam s PAM Group, including research papers and brochures, which will include specific models and literature related to managed accounts. Company is led by its head of Putnam Private Asset Management, Jeffrey Miller. Marsh & McLennan s Putnam Investments was founded in 1937 and has evolved through three phases, including establishment, acquisition, and scandals. 264

Marsh & McLennan s Putnam settled SEC and state regulator s fraud charges and paid $110 million. Six fund managers made market timing trades and four managers made trades within the funds they managed. Putnam knew about the trades but did nothing initially. Eventually Putnam fired the six managers only after the scandal broke and the CEO was also fired as a result. Some major corporations removed Putnam funds from retirement plans, including Wal-Mart, Clorox, and Merck. Marsh & McLennan insurance scandal involving Putnam s parent company has produced additional challenges. Client redemptions continue as clients pulled $10 billion following Eliot Spitzer s civil suit announcement. Marsh & McLennan s Putnam funds lost $30 billion in assets in a three week period following the announcement of the civil suit. Marsh & McLennan s Putnam Investments overall lost $63 billion, or nearly one-quarter of its assets under management. Marsh & McLennan s Putnam Investments has nearly $200 billion in assets under management, steadily dropping since the mutual fund scandals. Marsh & McLennan s Putnam Investments earns nearly $2 billion in revenues, steadily dropping since the mutual fund scandals. Marsh & McLennan s Putnam Investments Overall Lost $63 Billion, or Nearly One-Quarter of its Assets Under Management Marsh & McLennan Putnam Investments Assets Under Management ($ Billions) Remaining Assets 77% Lost Assets 23% Source: 1/24/05 Wall Street Journal; 1/2/05 San Francisco Chronicle; 11/04 Investment News; Tiburon Research & Analysis Marsh & McLennan s Putnam Investments has nearly 80 mutual funds, down 20%. Marsh & McLennan s Putnam has the most mutual fund wrap account assets amongst fund companies with $133. Marsh & McLennan s Putnam Investments has two business divisions, individual investors & institutional investors. Marsh & McLennan s Putnam Investments assets under management, over two-thirds belong to individual investors. Marsh & McLennan s Putnam Investment s first line of business is individual investor mutual funds and services. Mutual funds and services has 10 million shareholders, 66 mutual funds, and $133 billion assets under management. Marsh & McLennan s Putnam Individual Investments has 10 million individual shareholder accounts. Marsh & McLennan s Putnam Individual Investments has nearly 70 mutual funds. 265

Marsh & McLennan s Putnam Individual Investments has nearly $140 billion assets under management. Marsh & McLennan s Putnam Individual Investments offers a variety of products, including mutual funds, college savings & retirement accounts, annuities, and managed accounts. Marsh & McLennan s Putnam Individual Investment s mutual funds are nearly half equity funds. Marsh & McLennan s Putnam Individual Investments Mutual Funds Are Nearly Half Equity Funds Marsh & McLennan Putnam Individual Investments Mutual Funds by Investment Style Marsh & McLennan s Putnam is seeking to gain more separately managed account assets via its MSP offering. Engaged in discussions with three firms to distribute its MSP product. Incom e Funds Marsh & McLennan s Putnam Asset Allocat io n investment s second line of Funds 20% business is institutional Source: 8/29/05 Putnam Web Site; Tiburon Research & Analysis investing. Institutional investing has 12 mutual funds, 264 institutional clients, and $63 billion assets under management. Marsh & McLennan s Putnam Institutional Investments has 12 mutual funds. Marsh & McLennan s Putnam Institutional Investments has over 250 institutional clients. Marsh & McLennan s Putnam Institutional Investments has over $60 billion assets under management. Marsh & McLennan s Putnam Investments offers a variety of products for institutional investors, including mutual funds, college savings and retirement accounts, annuities and managed accounts. Marsh & McLennan s third business line is consulting. Marsh & McLennan s first business is Oliver Wyman, which is its management consulting branch. Marsh & McLennan s second business is its Mercer, which includes its human resource consulting & investment consulting. Marsh & McLennan's mercer employs around 9,000 professionals. Marsh & McLennan's mercer generates revenues of over $2 billion. Marsh & McLennan's Mercer generates over $120,000 in revenues per professional. 35% Grow th Equit y Fu nds 14% Blend Equity Funds V alue Equity Funds 14% 17% 266

Marsh Mclennan s Mercer management consulting. Investment Consulting Marsh McLennan s Mercer Human Resources Consulting. Marsh & McLennan s Mercer s second division is its investment consulting. Marsh & McLennan's Mercer Investment Consulting is a pension consulting firm with 196 pension clients and $417 billion in pension assets. Marsh & McLennan subsidiary CentreLink Insurance and Financial Services was founded in 1980 and is based in Woodland Hills, CA. Organization & Ownership The final section of Marsh & McLennan s profile will address its organizational structure of ownership. Marsh & McLennan companies has five sections on its web site, including about MMC, investors, news, MMC knowledge center, and careers. Marsh & McLennan s Putnam Investments is led by Charles Haldeman, along with Gordon Forrester, and Susan Martin. Marsh & McLennan is led by Michael Cherkasky, including Sandra Wijnberg and Michael Pertullo. Marsh & McLennan's Mercer is led by CEO Michele Burns. Marsh & McLennan s Mercer s Oliver Wyman is led by its president John Drzik. Marsh & McLennan companies is owned by its shareholders. National Financial Partners (NFP) NFP was founded in 1998 and is based in New York, NY. The firm has 400 employees, $1.1 billion revenues, $58 million net income, and is led by its CEO Jessica Bibliowicz. National Financial Partners (NFP) Comments Founded in 1998 Based in New York, NY 400 employees $1.1 billion revenues $58 million net income Public company (NYSE: NFP) CEO: Jessica Bibliowicz Web sites: www.nfp.com and www.nfpsecurities.com History The first section of NFP s profile will explain the key historical events in the firm s development. National Financial Partners (NFP) was founded in 1998 and has evolved through three phases, including its early growth, IPO years, and recent years phase. Early Phase Source: 3/31/07 NFP Annual Report; 7/15/05 Oppenheimer A nalyst Report; 5/23/05 NF P Web Site; 5/05 Investm ent A dvisor; 4/25/05 Investment News; 2/16/05 NFP Presentation (Doe); 2/9/05 NFP Web Site; 12/31/04 NFP Annual Report; 6/15/04 Wall S treet Journal; 3/23/04 NFP Web Site; 12/03 A merican Banker; 5/02 Registered Rep; 2/02 Registered Rep; 10/01 Financial Advisor; 9/10/01 Investment News; Tiburon Research & Analysis 267

This section includes NFP s early phase. NFP s Highland Capital s predecessor RE Lee Gorup was founded in 1991 by a group of independent brokerage general agents. NFP s Highland Partners was founded in 1997 by a group of six insurance and investment producer firms out of fear for survival in a consolidating financial marketplace. Growth Phase This section includes NFP s middle phase. Recent Phase This section includes NFP s recent phase. NFP s Highland Capital acquired 30 financial services firms between 1998 and 1999. NFP was founded in 1998. NFP was funded in 1999 with $125 million in venture capital from Apollo Partners. National Financial Partners announced itself in 1999 with 24 other firm acquisitions under its belt. National Financial Partners Announced Itself in 1999 With 24 Other Firm Acquisitions Under its Belt National Financial Partners Early Acquisitions NFP s Highland Capital had many wholesale acquisitions in 2000 to 2002. NFP completed its 100th acquisition in 2001. NFP s Highland Capital acquired RE Lee Group and renamed firms Highland Capital Brokerage in 2001. NFP went public in 2003. Barry Kaye Associates Benefit Planning Services Cash & Associates Cox Financial Advisors Dublin Insurance Services Eastman Benirschke Financial Group Eisenberg Financial Group Executive Benefit System FFR Financial & Insurance Services Financial Concepts of the Twin Cities Goodman Financial Group Hallman & Lorber Associates Harbor Group Innovative Benefits Consulting Interwest Financial Group JMC Concepts Source: 4/30/99 New York Times; 4/12/99 Wall Street Journal; Tiburon Research & Analysis Legacy Capital Group Perkins Insurance Services PRW Associated Incorporated Spalding Financial Group Total Financial & Insurance Services Udell Associates Unisyn Companies Westbury Financial NFP s Highland Capital allied with Jefferson Pilot Securities and launched an independent broker/dealer called windward securitie corporation in 2003. NFP explored a unique new strategy of producer groups by partnering with entrepreneurial business owners to build networks of financial advisors in 2003. NFP completed a secondary public offering in 2004, and another in 2005. NFP is also a substantial broker/dealer used by acquired and third-party firms. 268

NFP s four key early acquisitions, including Partners Holding and Windsor Insurance Associates. NFP paid out its first dividend in 2004. NFP acquired Highland Capital in 2005. NFP s Highland Capital was established due to fear of changes in the financial services marketplace, where fragmented individuals would not survive. NFP s Highland Capital Holding Corporation has also been successful with insurance agents. NFP s Highland Capital considers itself to be a hybrid acquirer with three key characteristics. NFP s Highland Capital went public with a three year IPO strategy. NFP s Highland Capital was created by a group of six insurance and investment producer founding firms. NFP s Highland Capital backed four companies, which were led by Principal Financial Group, with $70 million in combined capital. NFP s Highland Capital was acquired for $48 million in cash and NFP common stock. NFP s Highland Capital Backed Four Companies, Which Were Led by Principal Financial Group, With $70 Million in Combined Capital Highland Capital Capital Backing By Company Principal Financial Group $25 Million NFP has sold seven firms since 2002 due to underperformance. NFP s growth strategy has two key growth components, both acquisition of new firms and growth of its existing firms. Jefferson Pilot Corporation, Proctective Life Corporation, & Berkshire Life Insurance Company $45 Million Source: 1/9/05 Highland Capital Web Site; Tiburon Research & Analysis Statistics The second section of NFP s profile will review some key statistics regarding the firm. NFP has 400 employees. NFP has three-quarters of its employees in Austin, TX. NFP generates $1.1 billion revenues, up over 1,000% since 1999. NFP s revenues are generated over three-quarters by the life insurance & wealth transfer market and the corporate & executive benefits market. 269

NFP s revenues are generated over one-third from its firms in Florid, New York, & California. NFP generates 35% of its revenues in the fourth quarter. NFP continues to reduce its general & administration expenses as compared to revenues, even as it absorbs increased public company & regulatory costs. NFP earns $58 million, up almost 400% since 2002. NFP Earns $58 Million, Up Almost 400% Since 2002 NFP s ability to grow as a public company is a concern for some industry experts, including potential difficulty with acquisition pricing moving forward. NFP identifies six risks that may affect its ability to continue its growth, including heavy competition on the acquisitions front. NFP s acquisition model is viewed by fee-based financial advisors as successful but not focused on the fee-based financial advisor market. Businesses The third section of NFP s profile will outline its core businesses. NFP is organized into three businesses, including the acquisition company, its insurance business, and its independent broker/dealer. Acquisition Company NFP s first business is its acquisition company. S ource: 3/3/107 NFP Annual Report; 7/15/05 Oppenheimer A nalyst Report; 5/30/05 NFP Web Site; 12/03 Am erican Banker; 3/23/04 NFP Web Site; Tiburon Research & Analysis $12 $24 NFP Net Income ($ Millions) $40 $56 $58 2002 2003 2004 2005 2006 NFP s Acquisition Company Has Acquired 207 Companies, Up Almost 300% Since 2000 NFP s acquisition company has acquired 207 companies, up almost 300% since 2000. NFP has been a successful systematic acquirer of financial advisory firms.. NFP has completed nearly 20% of the prospective acquisitions it has reviewed since its inception. NFP has spent almost $420 million in cash and stock on NFP Acquisitions 207 145 153 130 111 88 74 2000 2001 2002 2003 2004 2005 2008 Source: 2/16/05 NFP Presentation (Doe); 2/9/05 NFP Web Site; 8/16/04 Investment News; 3/23/04 NFP Web Site; 3/1/04 Investment News; 2/23/01 American Banker; Tiburon Research & Analysis 270

acquisitions since 1999. NFP transactions have been fewer but larger. NFP s acquired firms operate at target earnings or above two-thirds of the time. NFP believes it has plenty of capital to sustain its acquisition model and independence. NFP was formed to provide three basic benefits not previously available to smaller advisory firms and seeks to be the preeminent provider of specialized financial services to the high net worth and corporate markets. NFP s acquisition model is to pay five times cash flows to own all of the stock and 40% of future cash flows, making it a relatively high bidder for commission-oriented business. NFP considers the balance of three components in determining the value of advisory firms, including earnings capitalization, a management agreement, and a long-term strategies. NFP s model would suggest a $2 million cash payment and $600,000 annually for a $2 million revenue firm. NFP requires the capitalized amount to be taken at least 20% in stock; financial advisors seeking to benefit most from NFP s public shares take the majority of the compensation in stock. NFP uses stock for almost half of acquisition purchase prices. NFP acquired firm owners have stock restrictions and can only sell at certain times. Owners were able to sell during the IPO and during NFP designated events. Stock restrictions are lifted after five years from the time the owner sold to NFP. NFP Uses Stock For Almost Half of Acquisition Purchase Prices Cash 53% NFP Payment Formula By Payment Instrument Stock 47% NFP takes upwards of two months to complete the acquisition; the average rep transitioning to NFP Securities otherwise will likely wait as long to complete the process. Source: 2/05 Financial Advisor; 3/1/04 Investment News; Tiburon Research & Analysis NFP, prior to its IPO, had offered a stock options program for member firms, whereby it rewarded principals with stock or cash if earnings grew greater than 10% over three years. NFP now offers an earn-out program that rewards advisors that continue to grow their businesses. 271

NFP claimed to stack up well when considering the financial and operational implications of other alternatives prior to its own IPO. NFP model works best for financial advisors with three objectives, including the desire for scale, the desire to remain independent, and the desire to capitalize part of their firm s value. NFP advertises and conducts due diligence to attract firms. NFP s due diligence team identified that the average age of the principals of the firm is 51, signaling that it is seeking principals that are not looking for exit strategies. Members commit to running firms for five years and thereafter, option to renew management contract for one-year terms. NFP may have difficulty attracting fee-based financial advisors if it continues to focus on commission-based insurance business. Advisors have concerns about being labeled as product pushers for a larger corporation. Product neutrality is the core of fee-only financial advisors value proposition. NFP offers five primary resources that assist its firms in growing their business, including available capital and brand name. NFP has two main vertical integration strategies to enhance the value of its stock, including acquisition of strategic providers and strategic alliances. NFP presents its integration plans as all in the interest of the acquirers. Robert Rosen the Chairman of NFP commented that: NFP is a producers group with the added cement of an equity stake for member firms and the ability to seek capital infusions. NFP acquired firms retain their independence. They claim, The day before the transaction is the same as the day after. NFP acquired firms and individuals with securities licenses must move to NFP Securities within one year of the transaction. NFP Acquired Firms Retain their Independence NFP Integration Motto The day before the transaction is the same as the day after The average purchase price NFP has paid for its acquisitions is $3.3 million. Source: 4/19/99 National Underwriter; Tiburon Research & Analysis NFP is trying to balance its acquisitions between life insurance & estate planners, corporate & executive benefits firms, and financial planners & investment advisors. NFP s acquisitions, thus far, are mostly life insurance & estate planners and corporate & executive benefits firms. 272

NFP has acquired 207 firms, which is far more than any other systematic acquirer. NFP s first subsidiary is Administrative Systems. NFP s second subsidiary is Alan Kaye Insurance Agency. NFP s third subsidiary is American Benefits Group. NFP s fourth subsidiary is American Financial Solutions. NFP s fifth subsidiary is American Wealth Transfer Group. NFP s sixth subsidiary is Arnone, Lowth, Fanning, Wilson, & Rubin. NFP s seventh subsidiary is Arther Shankman & Company. NFP s eighth subsidiary is Balanced Program. NFP s ninth subsidiary is Barry Kaye Associates. NFP s tenth subsidiary is Beacon Group. NFP s 11 th subsidiary is Beacon Retirement Planning Services. NFP s 12 th subsidiary is Benefit Associates. NFP s 13 th subsidiary is Benefit Planning Services. NFP s 14 th subsidiary is Benefit Solution Group. NFP s 15 th subsidiary is Bernard Wolfe & Associates. NFP s 16 th subsidiary is Bingham & Hensley Resources. NFP s 17 th subsidiary is Bishop, Ortiz, & LoCascio Associates. NFP s 18 th subsidiary is BMG of WNY. NFP s 19 th subsidiary is Brown, Bridgeman, & Company. NFP s 20 th subsidiary is Browning Group II. NFP s 21 st subsidiary is Braunstein, McGorry, & Company. NFP s 22 nd subsidiary is Burke Group The Partners Financial. NFP s 23 rd subsidiary is Capital Strategic Advisors. NFP s 24 th subsidiary is Capital Strategies Group. NFP s 25 th subsidiary is Cash & Associates. 273

NFP s Cash & Associates provides services in four areas, including retirement planning, estate planning, asset management, and qualified plans. NFP s Cash & Associates tries to differentiate itself from other firms in the marketplace by adhering to three key investment principles, including qualified advice, goal focused investing, and open & consistent communications. NFP s Cash & Associates has formed a relationship with a CPA firm to provide integrated advice to its clients. NFP s Cash & Associates asset management fees are competitive, ranging from 1.00% to 0.30%. NFP s 26 th subsidiary is Charon Planning Corporation. NFP s 27 th subsidiary is Chicago Life Partners. NFP s Cash & Associates Asset Management Fees are Competitive, Ranging From 1.00% to 0.30% 1.00% Cash & Associates Asset Management Fee Schedule 0.80% 0.60% 0.50% 0.40% 0.30% NFP s 28 th subsidiary is Christie Associates. First $1 Million Next $1 Million Next $1 Million Next $3 Million Next $3 Million Over $9 Million NFP s 29 th subsidiary is Clouse Financial. Source: 2/23/05 Cash & Associates Web Site; Tiburon Research & Analysis NFP s 30 th subsidiary is Clover Financial & Insurance Services. NFP s 31 st subsidiary is Corporate Benefits Advisors. NFP s 32 nd subsidiary is Corporate Benefits. NFP s 33 rd subsidiary is Corry Group. NFP s 34 th subsidiary is Cox Financial Advisors. NFP s 35 th subsidiary is Cross Keys Asset Management. NFP s 36 th subsidiary is Curtis & Associates. NFP s 37 th subsidiary is Dascit/White & Winston. NFP s 38 th subsidiary is Delessert Financial Services. NFP s 39 th subsidiary is Delott & Associates. NFP s 40 th subsidiary is DiMeo, Schneider, & Associates. NFP s 41 st subsidiary is Dreyfuss & Birke. 274

NFP s 42 nd subsidiary is Dublin Insurance Services. NFP s 43 rd subsidiary is Earl & Associates. NFP s 44 th subsidiary is Eastman Benirschke Financial Group. NFP s 45 th subsidiary is Educators Preferred Corporation. NFP s 46 th subsidiary is Eisenberg Financial Group. NFP s 47 th subsidiary is Employers Select Plan Agency. NFP s 48 th subsidiary is Enrollment Advisors. NFP s 49 th subsidiary is Estate Planning Advisors. NFP s 50 th subsidiary is Estate Resource Advisors. NFP s 51 st subsidiary is Excess Reisnruance Underwriters. NFP s 52 nd subsidiary is Executive Benefits Systems. NFP s 53 rd subsidiary is Executive Capital Advisors. NFP s 54 th subsidiary is FBD Consulting. NFP s 55 th subsidiary is FDR Financial Group. NFP s 56 th subsidiary is Fern, Kaye, & Tessler. NFP s 57 th subsidiary is Field Underwriters Agency. NFP s 58 th subsidiary is Financial Concepts of the Twin Cities. NFP s 59 th subsidiary is Financial Indpendence Company. NFP s 60 th subsidiary is First Financial Partners. NFP s 61 st subsidiary is Financial Resources (FFR Financial & Insurance Services). NFP s First Financial Resources has access to separate accounts through Oglivey Securities and Walnut Securities. NFP s 62 nd subsidiary is Fleischer-Jacobs & Associates. NFP s 63 rd subsidiary is Garrett, Prather, & Company. NFP s 64 th subsidiary is Great Midwest Brokerage. NFP s 65 th subsidiary is Glory Insurance Agency. 275

NFP s 66 th subsidiary is Goodman Financial Group. NFP s 67 th subsidiary is Goodwin, Goodwin, & Associates. NFP s 68 th subsidiary is Group Benefit Solutions. NFP s 69 th subsidiary is Hallman & Lorber Associates. NFP s 79 th subsidiary is Harbor Group. NFP s 71 st subsidiary is Hartfield Company. NFP s 72 nd subsidiary is Harvest Financial Group. NFP s 73 rd subsidiary is Healey & Associates. NFP s 74 th subsidiary is Hemisphere Group. NFP s 75 th subsidiary is Herrig & Herrig Financial Services of Florida. NFP s 76 th subsidiary is Highcap Benefit Services of Maine. NFP s 77 th subsidiary is Hostetler, Church, & Associates. NFP s 78 th subsidiary is Howard Hartman Services. NFP s 79 th subsidiary is Howard Kaye Insurance Agency. NFP s 80 th subsidiary is Howward Winitsky & Associates. NFP s 81 st subsidiary is HAS Corporation. NFP s 82 nd subsidiary is IBS Business Services. NFP s 83 rd subsidiary is IKON Benefits Group. NFP s 84 th subsidiary is Innovative Benefits Consulting. NFP s 85 th subsidiary is Innovest Advisors. NFP s 86 th subsidiary is Insreview. NFP s 87 th subsidiary is Insurance & Financial Services. NFP s 88 th subsidiary is Insurance Partners Southwest. NFP s 89 th subsidiary is Integrated Planning Associates. NFP s 90 th subsidiary is Interwest Financial Group. 276

NFP s 91 st subsidiary is IPS Advisors. NFP s 92 nd subsidiary is IRC-OHU. NFP s 93 rd subsidiary is Joseph Himmelsten Insurance Agency. NFP s 94 th subsidiary is JMC Concepts. NFP s 95 th subsidiary is JR Katz. NFP s 96 th subsidiary is JT Butwin Corporation. NFP s 97 th subsidiary is Kirsh Financial Services. NFP s 98 th subsidiary is Kolinsky Hill Financial Group. NFP s 99 th subsidiary is Kring Financial Management. NFP s 100 th subsidiary is Lanning & Associates. NFP s 101 st subsidiary is Legacy Capital Group. NFP s 102 nd subsidiary is Lenox Advisors. NFP s 103 rd subsidiary is Leon Hochheiser Company. NFP s 104 th subsidiary is Levine Financial Group. NFP s 105 th subsidiary is Liberty Financial Services. NFP s 106 th subsidiary is Lincoln Benefits Group. NFP s 107 th subsidiary is Linn & Associates. NFP s 108 th subsidiary is Lloyd Wilson Associates. NFP s 109 th subsidiary is M&M Brokerage Services. NFP s 110 th subsidiary is Management Brokers. NFP s 111 th subsidiary is Marc Jones Advisors. NFP s 112 th subsidiary is Maschino, Hudelson, & Associates. NFP s 113 th subsidiary is Massachusetts Business Association. NFP s 114 th subsidiary is Matthews Financial Services. NFP s 115 th subsidiary is McKenzie, abella, Matol, & Company. NFP s 116 th subsidiary is Meltzer Group Benefits. 277

NFP s 117 th subsidiary is Meltzer, Schiner, & Carroll. NFP s 118 th subsidiary is Michael Rudelson & Company. NFP s 199 th subsidiary is Mitchell & Moronesco Insurance Services & Investments. NFP s 120 th subsidiary is Monaghan, Tilghman, & Hoyle. NFP s 121 st subsidiary is Modern Portfolio Management. NFP s 122 nd subsidiary is Mosse & Mosse Insurance Associates. NFP s 123 rd subsidiary is MTD Associates. NFP s 124 th subsidiary is Nakamoto Financial & Insurance. NFP s 125 th subsidiary is National Enrollment Services. NFP s 126 th subsidiary is National Financial Services. NFP s 127 th subsidiary is National Investment Advisors. NFP s 128 th subsidiary is National Madison Group. NFP s 129 th subsidiary is Nemco Brokerage. NFP s 130 th subsidiary is New Market Financial Group. NFP s 131 st subsidiary is Nye Financial Group. NFP s 132 nd subsidiary is Nu Vision Financial Corporation. NFP s 133 rd subsidiary is Oklahoma Financial Center. NFP s 134 th subsidiary is O Riordan & Associates. NFP s 135 th subsidiary is P&A DMF. NFP s 136 th subsidiary is Partners Group. NFP s 137 th subsidiary is Partners Financial. NFP s 138 th subsidiary is Patricia Tanner & Associates. NFP s 139 th subsidiary is Peregrine Advisers. NFP s 140 th subsidiary is Perkins Companies. NFP s 141 st subsidiary is Personal Capital Management. 278

NFP s 142 nd subsidiary is Peyser & Alexander Management. NFP s 143 rd subsidiary is Plan Design Services. NFP s 144 th subsidiary is Private Consulting Group. NFP s 145 th subsidiary is Professional Benefits Solution. NFP s 146 th subsidiary is Professional Partners Group. NFP s 147 th subsidiary is Pro Vise Management Group. NFP s Pro Vise Management Group has 34 employees. NFP s Pro Vise Management Group earns $4.0 million revenues. NFP s Pro Vise Management Group s revenues are 70% recurring. NFP s acquisition of Pro Vise Mangaement Group involved several partners including Bruce Fyfe, Lew Prewett, & Kimberly Adams. NFP has many comments on the acquisition of Pro Vise Management: Bank made offer at 6-7x pre-tax profits ($7.5 million) but earn-outs got too complicated Spoke to Centurion; demanded substantial charge-backs Spoke to NFP; better format than Centurion but not best money NFP s Pro Vise Management Group was almost two-thirds owned by Ray Ferrera. NFP s 148 th subsidiary is PRW Associates Insurance Agency. NFP s 148 th subsidiary is PRW Associates Insurance Agency. NFP s 149 th subsidiary is Quantum Care. NFP s 150 th subsidiary is RA Bench. NFP s 151 st subsidiary is Randel Perkins Insurance Services. NFP s 152 nd subsidiary is RE Lee Group. NFP s 153 rd subsidiary is Robert Schechter & Associates. NFP s Pro Vise Management Group s Revenues are 70% Recurring Non-Recurring 30% Pro Vise Revenues By Type Recurring 70% Source: 2/05 Financial Advisor; 3/25/04 Pro V ise M anagement Group Web Site; 3/25/02 Pro Vise M anagement Group Conversation (Prewett); T iburon Research & Analysis 279

NFP s 154 th subsidiary is Retirement Investment Advisors. NFP s 155 th subsidiary is Sampers Financial. NFP s 156 th subsidiary is San Diego Pension Consultants. NFP s 157 th subsidiary is San Francisco Financial Partners. NFP s 158 th subsidiary is Savino, Sturrock, & Sullivan. NFP s 159 th subsidiary is Schechter Financial Group. NFP s 160 th subsidiary is Schmidt Financial Group. NFP s 161 st subsidiary is Scott Bierdrycki & Company. NFP s 162 nd subsidiary is Security Ballew. NFP s 163 rd subsidiary is Sharon ECA. NFP s 164 th subsidiary is Shiela Hartman Insurance Services. NFP s 165 th subsidiary is Sindrich & Associates. NFP s 166 th subsidiary is Smith & Frank Group Services. NFP s 167 th subsidiary is Spalding Financial Group. NFP s 168 th subsidiary is STA Benefits. NFP s 169 th subsidiary is Stallard Financial Strategies. NFP s 170 th subsidiary is Strategic Benefit Services. NFP s 171 st subsidiary is Strategic Capital Management. NFP s 172 nd subsidiary is Stuart Cohen & Associates. NFP s 173 rd subsidiary is Support Financial Services. NFP s 174 th subsidiary is The Benefit Company. NFP s 175 th subsidiary is The Heartland Insurance Group. NFP s 176 th subsidiary is The Summit Group. NFP s 177 th subsidiary is The Warner Companies. NFP s 178 th subsidiary is TJF Planning. 280

NFP s 179 th subsidiary is Total Financial & Insurance Services. NFP s 180 th subsidiary is Udell Associates. NFP s 181 st subsidiary is Unisyn Companies. NFP s 182 nd subsidiary is Universal Insurance Services of Florida. NFP s 183 rd subsidiary is Westbury Financial. NFP s 184 th subsidiary is Wharton Advisors. NFP s 185 th subsidiary is William O Donnell Associates. NFP s 186 th subsidiary is William Robert Thomas Financial Group. NFP s 187 th subsidiary is Windsor Insurance Associates. NFP s 188 th subsidiary is Highland Capital NFP s Highland Capital s acquisition pace subsequently slowed down after having acquired 30 firms between 1997 and 1999. NFP s Highland Capital was focused on acquiring firms that are withing its six core competencies, including asset management, business, succession, & estate planning. NFP s Highland Capital acquired all or substantially all of its firms. NFP s Highland Capital sought to pay four time cash flows for commission businesses and up to six times for fee businesses. NFP s Highland Capital had two distribution channels focused on retail & wholesale. NFP s retail channel targets the corporate and affluent marketplace. NFP s wholesale channel targets insurance brokers, financial planners, attorneys, and various institutions such as banks, wirehouses, and CPA firms. NFP s Highland Capital s retail offices offer financial services to the corporate and affluent marketplace. Services include, asset management, business succession planning, estate planning, executive compensation, employee benefits, and retirement planning. NFP s Highland Capital acquired RE Lee Group to create Highland Capital Brokerage. RE Lee Group was founded in 1991 by a group of independent brokerage general agents. Company has relationships with more than 40 insurance carriers and 5,000 producing agents. NFP acquired RE Lee Group in 2001. RE Lee firms renamed Highland Capital Brokerage and formed the wholesale division of Highland Capital. 281

NFP s Highland Capital brokerage offers a number of financial services. These include access to major carriers, advanced planning support, expertise in risk underwriting, and back-office processing. NFP s Highland Capital brokerage had a rewards program for its agents. The 2006 trip was to Ritz-Carlton in Grand Cayman. Brokers must earn $225,000 rewards credits from highlighted carriers to qualify. For multiple producer firms, the first two qualifiers must earn $225,000 and any additional firm qualifiers must reach $337,500 in highlighted carrier reward credits. NFP s Highland Capital brokerage has a sales support program called High Cap Group for its top producers. Program was launched in 2003; affiliates eligible members with a national organization and access to a special sales support platform. Program offers sales technology platforms, advanced planning resources, preferred payout schedules, concierge level of service, and sales forums. NFP s Highland Capital built partnerships with ten highlighted product providers to create synergies for its member firms. NFP s Highland Capital also utilized some other companies for individual products. NFP s Highland Capital s life insurance production is nearly half from the institutional market, including banks, trust companies, and broker/dealers. NFP s Highland Capital s Life Insurance Production is Nearly Half from the Institutional Market, Including Banks, Trust Companies, & Broker/Dealers Highland Capital Life Insurance Production by Source NFP s Highland Capital s core philosophy was to provide business building assistance for its member firms. David Byers of Capital Strategies (Highland Capital Affiliate) commented: Highland s attitude is tell us what you need to take your business to the next level. Life Insurance Production From Retail Market 55% Source: 7/21/05 Highland Capital Web Site; 7/20/05 NFP Web Site; 3/10/05 Yahoo Web Site; Tiburon Research & Analysis NFP s Highland Capital provided its member firms with access to support services, including strategic planning, marketing, and technology. NFP s Highland Capital also promoted the opportunity to buy other practices. NFP s Highland Capital affiliates could find their own successor. The firm is not looking for solo practices seeking an exit strategy, but when the time comes for retirement, the firm will help facilitate a succession plan. NFP s Highland Capital planned to start a deferred compensation plan. NFP s Highland Capital consulted with Prince & Associates for assistance. Life Insurance Production From Institutional Market 45% 282

NFP Insurance Services NFP s second business line is NFP Insurance Services. The firm is based in Austin Texas and run by its CEO, Bruce Callahan. NFP member firms represent $1 trillion of life insurance in force, up 250% since 1999. NFP Securities NFP s third business is NFP Securities, the firm s broker/dealer subsidiary initially started as a processor of variable life commissions and later moved to become a full service independent broker/dealer. The firm is based in Austin, TX. Company has 180 employees, 154 rep offices, 1,480 reps, 308,000 client accounts, $40.5 billion assets under administration, and generates $1 billion revenues and is run by its CEO, Dan Young. NFP Securities is a nationwide organization, registered to do business in 47 of the 50 states. NFP Securities has 180 corporate employees, up over 100% since 2001 and 15% since 2006. NFP Securities Has 180 Corporate Employees, Up Over 100% Since 2001 and 15% Since 2006 NFP Securities Corporate Office Employees NFP defines four characterists an entrepreneurial business owner provides, including ownership, scale, value proposition, and a product, planning, & high net worth orientation. 86 86 91 100 100 155 180 NFP gives many benefits to entrepreneurial business owners, including leverage, branding, and technology. 2001 2002 2003 2004 2005 2006 2007 Source: 4/28/08 Investment News; 10/4/05 NFP Conversation (Montgomery); 6/05 Financial Advisor; 6/05 F inancial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investm ent News; 6/04 Financial P lanning; 6/04 Investment Advisor; 6/04 Financial A dvisor; 4/5/04 Investment News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; Tiburon Research & Analysis NFP s entrepreneurial business owners strategy example includes fusion financial group, giving new reps the potential to join NFP Securities through affiliation with Fusion Financial Group. Group was founded in 2003 and is based in Elmsford, NY. The firm is looking for reps with a minimum of $200,000 annual production. Reps can work from its home office which holds 18 reps, or may maintain their own offices. The group is run by its CEO, Stuart Silverman. NFP Securities has 154 rep offices, up nearly 20% since 2001. NFP s NFP Securities has 1,480 reps, up more than 90% since 2001, including a jump of more than 30% in 2004. NFP s NFP Securities has 7.8 reps per office, which is a number more typical of a captive broker/dealer than an independent broker/dealer. 283

NFP Securities has a 12:1 rep to staff ratio, three times worse than some of its leading independent broker/dealer competitors. NFP s NFP Securities reps that are OSJ managers account for less than 10%, which has been consistent since 2001. NFP s NFP Securities reps that have Series 7 licenses account for three-quarters, which has been consistent since 2001. NFP s NFP Securities has 215 reps with the CFP designation. NFP s NFP Securities has 18% of its reps with CFPs. NFP s NFP Securities targets reps producing over $250,000, which is twice the level of some other successful independent broker/dealers. Twice the level of some other successful independent broker/dealers and acquired firms generally have revenues of at least $1 million or they need at least $600,000 of earnings. NFP s NFP Securities has 553 reps producing more than $100,000, up 175% since 2001-2004. NFP s NFP Securities Has 553 Reps Producing More than $100,000, Up 175% Since 2001-2004 NFP Securities Reps Producing More than $100,000 NFP s NFP Securities has onethird of its reps producing greater than $100,000, up 20% since 2001 and 80% since a low in 2004. 202 202 240 202 307 460 553 NFP s NFP Securities top ten reps median production is $1.4 million. 2001 2002 2003 2004 2005 2006 2007 Source: 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investm ent News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; Tiburon Research & Analysis NFP s NFP Securities gross production comes almost half from its top-50 producers, suggesting a highly stratified sales force considering it has a sales force nearing 1,200 reps. NFP s NFP Securities prospective reps have three choices for affiliation with NFP Securities, including acquisition and joining partners financial or fusion financial group. NFP s NFP Securities sources more than half of its reps through Partners Financial. NFP s NFP Securities key recruiting sources include insurance broker/dealers. NFP s NFP Securities believes that it has four key selling propositions, including its boutique nature, acquisition opportunity for practices, and multiple channels. NFP s NFP Securities potential firm profile form reveals some key aspects of the caliber of reps it is looking to attract based on the questions it asks. NFP s NFP Securities has 308,000 client accounts, up over 250% since 2001. 284

NFP s NFP Securities has 208 client accounts per rep, up nearly 100% since 2001. NFP s NFP Securities has $40.5 billion assets under administration, up 325% since 2001 and 25% since 2006. NFP s NFP Securities has $27.4 million assets under administration per rep, up 125% since 2001 and 50% since 2005. NFP s NFP Securities Has $40.5 Billion Assets Under Administration, Up 325% Since 2001 and 25% Since 2006 $10.0 $9.7 $9.5 NFP Securities Assets Under Administration ($ Billions) NFP s NFP Securities generates $1.0 billion revenues, up 700% since 2001 and over 250% since 2005. $16.1 $19.9 $21.9 $32.3 $40.5 2000 2001 2002 2003 2004 2005 2006 2007 Source: 4/28/08 Investment News; 12/31/06 Financial Planning; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investm ent News; 1/17/05 Investment News; 6/04 Financial P lanning; 6/04 Investment A dvisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; Tiburon Research & Analysis NFP s NFP Securities generates $653,000 revenues per rep, up 300% since 2001 and over 175% since 2005. NFP s NFP Securities commissions generate the majority of revenues; although fee-based revenues have been increasing since 2001, they are still quite small. NFP s NFP Securities views its revenue growth originating through thirteen solutions, from alternative investments to variable life insurance. NFP s NFP Securities Generates $1.0 Billion Revenues, Up 700% Since 2001 and Over 250% Since 2005 $123 $150 NFP Securities Revenues ($ Millions) $215 $252 $270 $966 $1,000 2001 2002 2003 2004 2005 2006 2007 Source: 12/31/06 Financial Planning; 12/18/06 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News;4/18/05 Investm ent News; 1/17/05 Investment News; 6/04 Financial P lanning; 6/04 Investment A dvisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investment News; 12/15/03 Investment News; 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; Tiburon Research & Analysis NFP s NFP Securities generates 2.46% return on assets, up 100% since 2001-2005 but down almost 20% since 2006. NFP s NFP Securities has $865 million expenses, relatively flat since 2006. NFP s NFP Securities average rep payout is $249,000, consistent since 2006. NFP s NFP Securities offers hundreds of mutual funds, variable annuities, life insurance products, retirement products, and alternative investments. NFP s NFP Securities follows a five step process when doing due diligence on prospective product vendors of mutual funds, annuities, alternative investments, et al. 285

NFP s NFP Securities does not manufacture products but works closely with outside vendors to build capabilities and add value. NFP s NFP Securities first exclusive product was an estate planning insurance policy custom-developed by Phoenix Home Life. NFP s NFP Securities distributes an American General private placement variable life product, which includes a hedge fund-of-funds product managed by Peyser & Alexander Management, a NFP firm. NFP s NFP Securities insurance products account for two-thirds of revenues, down from nearly three-quarters in 2001. NFP s NFP Securities revenues by product mix reveals that the company generates two-thirds of its revenues from insurance products. NFP s NFP Securities uses Pershing, National Financial Services, and Fixed Income Clearing Corporation for its clearing and order fulfillment services. NFP s NFP Securities works with Fixed Income Securities (FIS) to provide its reps with access to a variety of services and assist them in fixed income product selection. NFP s NFP formed a team in 2003 to redesign how it packages its insurance and investment services to stay competitive with the boomer demographic shift that is taking place. NFP s NFP Securities suggests its reps mark up commission trades between 2.5% and 2.0% depending on the transaction size. NFP s NFP Securities sets a guideline for its reps to mark up bonds, although they may discount as they please. NFP s NFP Securities offers mutual funds from 100 mutual fund families. NFP s NFP Securities has a list of ten mutual fund companies in its select providers program, with American Funds and fidelity advisor being its most significant in terms of firm compensation. NFP s NFP Securities has mutual fund assets. NFP s NFP Securities generates $27 million in mutual fund revenues, up 100% since 2001. NFP s NFP Securities has a list of ten variable annuity providers in its select providers program, with Genworth Financial being its most significant relationship in terms of firm compensation. NFP s NFP Securities has variable & fixed annuity assets. NFP s NFP Securities generates $32 million in variable & fixed annuity revenues, up almost 300% since 2001. 286

NFP s NFP Securities has a fee-accounts business. NFP s NFP Securities has 908 reps who utilize its fee-account programs, up almost 10% since 2006. NFP s NFP Securities Has 908 Reps Who Utilize its Fee-Account Programs, Up Almost 10% Since 2006 NFP Securities Reps Utilizing Fee-Account Program NFP s NFP Securities one-half of reps utilize fee-account programs, consistent since 2001 but up 30% since a dip in 2004. NFP s NFP Securities feeaccounts are one-third discretionary. 844 908 NFP s NFP Securities Reps average fee-account is $218,000. Source: 4/28/08 Investment News; Tiburon Research & Analysis 2006 2007 124 NFP s NFP Securities has $8.5 billion fee-account assets under management, up 300% since 2001-2003 and 70% since 2005. NFP s NFP Securities generates $74.7 million in fee-accounts revenues, up almost 1500% since 2001 and 200% since 2005. NFP s NFP Securities Has $8.5 Billion Fee-Account Assets Under Management, Up 300% Since 2001-2003 and 70% Since 2005 NFP Securities Fee-Account Assets Under Management ($ Billions) $2.0 $2.0 $2.0 NFP Securities primary feeaccounts business focus is what 2001 2002 2003 2004 2005 2006 2007 it calls its NFP advisor program, Note: Another source said that including RIA assets and assets held in brokerage or mutual fund accounts, NFP Securities had $9 billion of assets under management in 2003 Source: 4/28/08 Investment News; 6/05 Financial Advisor; 6/05 Financial Planning; 5/30/05 Investment News; 4/18/05 Investment News; 1/17/05 Investment News; 6/04 Financial Planning; 6/04 Investment Advisor; 6/04 Financial Advisor; 4/5/04 Investment News; 1/19/04 Investm ent News; 12/15/03 Investment News; established in 2002. CFAs 6/03 Financial Planning; 6/03 On Wall Street; 6/03 Investment Advisor; 6/03 Financial Advisor; 5/03 Ticker; Tiburon Research & Analysis provided to build client portfolios with separate accounts, mutual funds, multi-manager accounts, and hedge funds. Firms can private label program. Program has $323 million assets under management. NFP s NFP Securities NFP advisor program has $323 million assets under management, up 250% since 2002. NFP s NFP Securities has a comprehensive fee-accounts program, with a set of thirdparty TAMPs, some proprietary programs, and an upcoming unified managed account. This is a traditional separately managed account program with $100,000 minimum and $500,000 suggested minimum. NFP advisors may private label service but Envestnet has discretionary control. Six custodians available with quarterly performance reports and clients may fill out account paperwork online. There is a $500 liquidation fee upon termination if client wants to receive cash. Maximum fee schedule between 1.20% and 0.70% on equity portfolios. $3.0 $5.0 $7.9 $8.5 287

NFP s NFP Securities offers a separately managed account program through Envestnet called NFP Advisor Managed Accounts. This is a traditional multiple style portfolio program with $250,000 minimum. NFP advisors may private label. Portfolio invested in a handful of managers. Program, advisory, and custody fee between 1.10% and 0.66%. NFP s NFP Securities aims to help its affiliates access leading-edge technology. NFP s NFP Securities also offers numerous other TAMPs to be utilized inside of its NFP advisor managed accounts program. NFP s NFP Securities allows maximum fees between 1.20% and 0.70% on equity portfolios in its managed account solutions program. NFP s NFP Securities offers a multiple style portfolio program through Envestnet called NFP Advisor multiple manager accounts. NFP s NFP Securities charges an advisory & program fee ranging 0.90% and 0.60% on its multi-manager account solution program, alongside a custody fee as high as 0.20%. NFP s NFP Securities offers a mutual fund wrap account program called mutual fund solution through its Envestnet partnership. This is a traditional actively managed mutual fund wrap account with $50,000 minimum. Group has a fifteen year track record; 1,300 fund watch list, updated quarterly; and no proprietary funds. Program fee ranges from 0.38% to 0.23%. NFP s NFP Securities Envestnet charges a fee of 0.38% to 0.23% to administer NFP s mutual fund solution program. NFP s NFP offers a broker wrap program it calls Horizon. This is a traditional hybrid feebased brokerage account / broker wrap account program, with discretionary & nondiscretionary options with $50,000 minimum. Client pays ticket charges and advisor may pay with override function. Horizon offers mutual funds, stocks, bonds, CDs, and UITs. Prohibits limited partnerships, fixed annuities, short sales, options and clears through National Financial Services, which charges 6 bps per year for enhance billing & check writing capabilities. Check writing available for no additional charge but has a $3.85 fee for confirmations. Margin not allowed and account bundling allowed across Horizon accounts, with all accounts charged fees based on largest account s balance. Horizon improved First Rate quarterly performance report available for additional charge. $125 per year for standard report, $175 for premium, $30 additionally for bound copy. Rep or client may pay fee with maximum fee between 2.50% and 1.50%. NFP s NFP Securities set a tiered maximum fee schedule on its horizon program, but keeps its minimum fee at less than 0.25%. NFP s NFP Securities Horizon program charges clients standard transaction fees. NFP s Securities offers a fee-based brokerage account/broker wrap hybrid account it calls Ascend. This is the traditional fee-based brokerage account / broker wrap hybrid, with non-discretionary and discretionary options available. There are $50,000 minimum with smaller accounts get booted if client refuses to move to a standard brokerage 288

account or bring it back. Client pays ticket charges and advisor may pay with override function. Ascend clears through Pershing and offers stocks, bonds, mutual funds, CDs, UITs. Company prohibits limited partnerships, fixed annuities, short sales, options, and margin not allowed. Ascend provides reps with research team, experienced brokerage operations team, and net Exchange Pro software platform with quarterly performance reports. Account bundling allowed across Ascend accounts, with all accounts charged fees based on largest account s balance. There is a maximum fee of 1.95% - 0.75% with discounting at rep discretion, not below 0.25%. NFP s NFP Securities set maximum fees on its Ascend fee-based brokerage account between 1.95% and 0.75%, with Pershing taking a cut. NFP s NFP Securities Ascend fee-based brokerage account charges clients standard transaction fees. NFP s NFP Securities offers reps a fee-accounts tool called the advisory search engine through its web site, which filters each of the firm s fee-accounts products by a handful of variables. Reps check boxes on such things as discretion, investments offered, account minimums, fees, management style, custodian, and bells & whistles. NFP s NFP Securities charges a tiered maximum fee schedule on its advisory services, but keeps its minimum fee at less than 0.25%. NFP s NFP Securities was planning to launch a holistic fee-accounts technology tool for reps it calls advisor enterprise in late 2005. Unified solution for reps providing them strategies, investment products, powerful analytical tools, insightful research, and dynamic reporting utilities in a single platform. Aimed at reps that manage their own portfolios by enabling reps to build and manage asset allocation models. NFP s NFP Securities advisor enterprise tool will not come cheap to reps, charging between 23 and 10 basis points on assets. NFP s NFP Securities point by point comparison of fee-account programs reveals an extensive offering of product and pricing options. NFP s NFP Securities reps that provide services through their own RIA account for only 10%, which has been consistent since 2001. NFP s NFP Securities offers a handful of private placement products, including those from MD Sass. NFP s NFP Securities other real estate programs include 1031 exchange programs, allowing property owners to diversify other investments on a tax-preferred basis. NFP s NFP Securities offers the Peyser & Alexander select strategy fund-of-funds to round out its alternative investments offer. Gives client interest in a handful of successful hedge fund & private asset managers. NFP s NFP Securities has policies regarding outside direct insurance sales. NFP s NFP Securities offers long-term care & disability insurance. 289

NFP is able to demand better products from life insurance carriers and other product companies. NFP s NFP Securities has a handful of five featured variable life insurance producers within its select providers program. NFP s NFP Securities services from Everbank provides mortgage & banking, including mortgages, money market funds, CDs, check writing, debit & ATM cards, and consolidated statements. NFP s NFP Securities developed a relationship with independent trust company Santa Fe Trust to offer personal trust services. Provides trust account administration, record keeping, and personal trust services. Does not provide investment management, tax prep, or document drafting services. NFP s NFP Securities offers Santa Fe Trust services to clients with personal or charitable trusts for between 55 and 20 basis points, depending on assets. NFP s NFP Securities offers Santa Fe Trust services to clients desiring to create life insurance trusts for a handful of fees, along with a five basis point distribution charge. NFP s NFP Securities financial planning resource center web site offers member firms four distinct tools, including relevant industry insights & peer benchmarking. NFP s NFP Securities also offers benefit products. NFP s NFP Securities promotes a financial planning magazine study that declared the firm to have the top payouts of any broker/dealer in its recruiting efforts. Study published in 2004. NFP s NFP Securities organizes its payouts structure into three schedules including variable insurance, RIA, and all other securities payouts. NFP s NFP Securities Pays Out 96% on Insurance for All Rep Production Levels NFP s NFP Securities pays out between 70% and 95% on mutual funds, variable annuities, limited partnerships, & securities based on rep production level. 96% 96% NFP Securities Insurance Payouts 96% 96% 96% NFP s NFP Securities pays out RIA fees based on a three-tier structure; payouts on fees up to $75,000 are paid out on the standard grid. $0-$249,999 $250,000- $499,999 $500,000- $749,999 $750,000- $999,999 $1,000,000+ NFP s NFP Securities pays out Source: 4/28/08 Investment News; Tiburon Research & Analysis fee-accounts business on the standard grid until a rep reaches $100,000, after which it pays out 95%. 172 290

NFP s NFP Securities pays out 96% on insurance for all rep production levels. NFP s NFP Securities pays out 80% to 97% on variable life, depending on the insurance carrier used. NFP s NFP Securities calculates payout by first multiplying the rep s gross commissions and payout rate, and then subtracting ticket charges. No compensation advance allowed outside of emergency situations. In emergency cases, reps may be advanced fees already paid to the firm, minus some service fees. NFP s NFP Securities has a two-tiered payout reset policy, with differences for standard & RIA rep payouts. NFP s NFP Securities has a charge back policy for underperforming rep in which it calculates a charge back to be assessed to reps that do not meet the minimum production amount for the payout level. This is applies to standard payout schedule and RIA payout schedule. NFP s NFP Securities requires all reps to purchase E&O insurance through the firm. NFP s NFP Securities offers its reps two options in terms of errors & omissions insurance, depending on the amount of coverage desired. NFP s NFP Securities may also charge numerous smaller fees for various items from continuing education modules to monthly technology fees. NFP s NFP Securities reps terminating a relationship with NFP Securities are charged a $100 termination fee. NFP s NFP Securities clearing charges on Fidelity Investments National Financial Services-custodied accounts range from $17 on equity trades to $35 for many fixed income transactions. NFP s NFP Securities clearing charges on Pershing-custodied accounts range from $17 on equity trades to $35 for many fixed income transactions. NFP s NFP Securities also assesses a handful of client services fees on accounts custodied at National Financial Services. NFP s NFP Securities also assesses a handful of client services fees on accounts custodied at Pershing. NFP s NFP Securities receives significant revenue sharing payments relative to the industry from its select providers, dependent on product type. NFP s NFP Securities operations departments include licensing, new accounts, account transfers, legal & compliance, trading, commissions, and statements. NFP s NFP has unbundled its broker/dealer operations to be stand alone from its revenue enhancement group which it calls revenue incorporated. 291

NFP s NFP Securities reps are allowed to share office space with reps of other broker/dealers, so long as they meet five criteria, including record distinction, evidence of NFP Securities, local business name, commission sharing, & compliance approval. NFP s NFP Securities imposes a strict record retention policy on its reps. NFP s NFP Securities offers two options for basic rep technology as part of its My Resource View program, one with a few more bells & whistles for nearly three times the price. NFP s NFP Securities strongly promotes the benefits of three pieces of innovative thirdparty technology it supplies as part of its value-add proposition to prospective reps. NFP s NFP Securities offers reps proprietary technology to assist in selecting variable and fixed annuity products. NFP s NFP Securities also offers reps a handful of premium technology modules for additional fees, often at a steep discount to retail as part of its software advantage program. NFP s NFP Securities reps give mixed scores to the firm s technology s intuitiveness, offering a 7.4 average score. NFP s NFP Securities reps comment that the firm s technology s intuitiveness is practical but can be enhanced by upgrading its search feature: Descriptive Comments There is a drop down menu on side that helps to navigate The web site has broad categories and can be drilled down by interest NFP has their web site broken down into departments Positive Comments The web site is better than it use to be A couple of clicks and you are where you want to be Some parts are easy to go through Fairly easy to get around once you get a hang of it If I can use it, anyone can There is no difficulty in finding what I need Everything is well laid out From the eight years I have been here, the web site has gotten better Negative Comments Sometimes I get frustrated searching for things There is a lot on the web site and feels convoluted Sometimes its difficult to find the end result The search feature does not work as it usually does not come up with the right results Its hard to figure out where things are The search function is the pits NFP needs to work on their search function 292

NFP s NFP Securities reps give moderately low scores to the firm s technology s integration across various applications, offering a 6.0 average score. NFP s NFP Securities reps comment that the firm s technology s integration across various applications works well with its OLAE program but could overall still be more integrated: Descriptive Comments Applications prepopulates through social security For new account forms, information populates over, while for auxiliary forms like beneficiary forms, information does not populate over When using OLAE, the information populates over Positive Comments There are some items that can be prepopulated over 80% of information populates, while the other part has to be updated Data does populate over NFP works pretty hard on integration technology Negative Comments We have to duplicate information five different times because there is no integration Its terrible I have to retype in all applications by hand Integration does not work for all forms like retirement plan specialist documents I usually have to retype in the information NFP s NFP Securities reports that half of its reps use Laser Fiche. NFP s NFP Securites reps give mixed scores to the firm s technology timeliness & accuracy, offering a 9.1 average score. NFP s NFP Securities reps comment that the firm s technology timeliness & accuracy is acceptable by most reps: Descriptive Comments Data is one day behind Data lags about 2-3 days Positive Comments We get accurate information 24 hours later Data is timely (1 day old) The data is pretty accurate I have not experienced inaccurate data If there is an error in data, NFP usually sends an email telling us that they are reconciling The data is very good as I have never had an issue with it No issues on the quality of data All applications seek to talk fine together Negative Comments There seems to be a lot of inaccuracies on pricing Sometimes data is missing 293

I do know of other reps from NFP that have experienced inaccurate data At least every other month we find that the account values are not always accurate There is no standard portfolio management system NFP s NFP Securities reps give high scores to the firm s technology s operationsl capabilities, offering a 9.1 average score, with two outliers. NFP s NFP Securities reps comment that the firm s technology s operational capabilities are increasingly getting better: Descriptive Comments -- Positive Comments Easy to fill out forms online Its as good as it gets NFP really makes it easy to execute operational tasks The forms program is very efficient Operational tasks are laid out well Fairly easy to conduct operational tasks because they are web based Execution of operational tasks are easy to get to I can run through the day without hiccups Never really had an issue running day to day operations Everything seems to tie in so well to perform operational tasks NFP is really good at making operations easily executable Negative Comments Some operational tasks can be worked properly Had difficulty managing daily reminders from the system There are bad directions on who to execute some operational tasks Could be a lot better I feel that I do a lot of form filling by hand I feel that I am not taking full advantage of the operational capabilities NFP comes out with too many new forms NFP s NFP Securities reps give moderate scores to the firm s technology s imaging capabilities, offering a 9.1 average score. NFP s NFP Securities reps comment that the firm s technology s imaging capabilities still need to be integrated between financial advisors and NFP: Descriptive Comments NFP uses Laser Fische Positive Comments Imaging is efficient & seamless NFP is trying to connect imaging systems between financial advisors and NFP NFP is proactive in making offices paperless NFP offers imaging to anyone that wants it NFP is trying to make the office paperless with new initiatives There is a push to integrate our office imaging with NFP s system NFP is doing their best to get us paperless 294

I do hear NFP talking about making the office paperless NFP provides classes on how to utilize Laser Fische and integrate it to NFP s system Negative Comments Really do not hear much about imaging Take a bit of time to get old files in place The imaging connection between NFP does not work well I feel that NFP imaging initiatives are a waste of time & money Could be improved, there still seems to be a lot of paper The Laser Fische system is not fully integrated between firms and NFP NFP s NFP Securities reps give mixed scores to the firm s technology issue tracking capabilities, offering a 9.1 average score, with one outlier. NFP s NFP Securities reps comment that the firm s technology s issue tracking capabilities are one dimensional and can still be worked on: Descriptive Comments Can review items through OLAE (Online Account Establishment) Positive Comments I can track online through the web site to see progress Open service items do not go into a black hole I can check to see the status of my item online There is an overall system that tracks items We can check online entered and completed items only I can track items but not review them Negative Comments We can not track open-service items There is no way of seeing progress online We have to manually check the progress of any item Do not know of any tracking system I wish they did have something There is a bit of black space between then we send it and when it gets executed Would be helpful if we could review pending issues NFP could be helpful in providing more information on open-service items NFP s NFP Securities reps give relatively high scores to the firm s technology s remote access capabilities, offering a 9.1 average score. NFP s NFP Securities reps comment that the firm s technology s temote access capabilities works well for most reps: Descriptive Comments -- Positive Comments Just need internet connection and your ready to go Can log in anywhere Everything can be accessed online from NFP s secure web site 295

As long as you have your user name, password, and internet access, you are in I can do just about anything from anywhere Everything is web based Never had an issue with remote access The system is the same in or away from the office I can remote anywhere, at anytime I use remote access all the time Negative Comments Accessing remotely is a bit slower NFP s NFP Securities reps give relatively high scores to the firm s technology s reliability, offering a 9.1 average score. NFP s NFP Securities reps comment that the firm s technology s reliability has been worked on to ensure very few glitches or system failures: Descriptive Comments -- Positive Comments NFP is usually good in telling you in advance if they intend for the system to be down Glitches are pretty infrequent The system is always up and running NFP spends tons of time in beta testing before sending any application out I have not experienced many glitches The system is almost always reliable with the occasional glitches I can not think of any system failures or glitches I have confidence in the NFP system NFP usually times upgrades over the weekend I feel that NFP is always upgrading to make the system better There are not many glitches since we have been here in 2000 No system failures even come to mind NFP definitely focuses on technology NFP tries to make the technology reliable by working on it constantly Never really had a problem with the system Very rarely is the system is the ever down Negative Comments There are occasional interruptions Once a quarter the system is down Every now and then the web site is down due to upgrading The only time I remember when the system was slow, was when we went to a new version of internet explorer NFP s NFP Securities reps give high scores to the firm s technology s value, offering a 9.1 average score. NFP s NFP Securities reps comment that the firm s technology s value is fairly priced and comprehensive: Descriptive Comments 296

Some parts are mandatory to buy and other parts are a la carte We pay $750 for the web site, smart office, and Albridge Solutions Morningstar station costs $200 a month Partnerview (Albridge) costs $180 a month There a a lot of components that are priced into the technology for reps Technology comes a la carte depending on what you want Positive Comments The technology we receive is very comprehensive What we have is decent What I pay is very reasonable NFP keeps up to date the needs of the financial advisor NFP is a great business to have technology through NFP offers many technology resources for a low price I get everything I need The technology NFP offers gets me through my day The technology is a great value The basic services are fairly prices Negative Comments They nickel & dime us for everything It feels like its cheaper to outsource everything The price could be less for Albridge NFP s NFP Securities reps give moderately high scores to the firm s live technology support, offing a 9.1 average score. NFP s NFP Securities reps comment that the firm s live technology support is helpful but could extend its hours of operation: Descriptive Comments -- Positive Comments They do a nice job in Austin & New York They recently helped me reprogram my blackberry The tech support people are very good at calling back quickly The tech support people are very accessible by phone & email The technical support is wonderful The tech support people are very proactive There is no real wait time as you usually get someone pretty instantly Need only one phone call to get to someone The technology support is generally available They gets thing done reasonably There are multi-lines, so we are never on hold It is very rare to wait longer than a minute Most of the time, the tech support people understand the situation There is rarely a hold time They are extremely helpful They are moving in the right direction Negative Comments 297

The technology department has such a turnover that it feels like I get someone new when I call Sometimes I do not get the right answer They do not put enough hours in the week The tech support is based on east coast time so they close at 5 pm NFP Securities promotes its electronic commissions & fees payment system with prospective reps, including its Eblotter tracking system. NFP s NFP Securities provides member firms signed up with NFP advisor eight core tools, including a collection of ideas and monthly sales ideas. NFP s NFP Securities also offers reps a complementary sub account management system for variable life insurance policies. NFP s NFP Securities rep support and resolution team serves as a single point of contact for ongoing support on a range of issues. NFP s NFP Securities has a partnership with Newkirk to help reps private label newsletters, guides, and other communications. Newkirk was founded in 1972, company is a leading provider of marketing communications to financial services & healthcare companies. Reps get a 10% discount through NFP. NFP s NFP Securities Newkirk relationship gives reps three options on newsletters, including loose change, four bits, and plan wise. NFP s NFP Securities Newkirk relationship also gives reps six options on guides to send to clients, including college & tax planning. NFP s NFP Securities relationship with Newkirk gives reps access to a private labeled newsletter on the cheap. NFP s NFP Securities relationship with Newkirk gives reps access to a private labeled financial planning guide for about $2 a piece. NFP s NFP Securities offers Jeffrey Rose & Associates to develop rep newsletters as requested. NFP s NFP hopes to create opportunities for cross-selling among its affiliates. Company helps to facilitate meetings between member firms and identifies client and product synergies. NFP s NFP Securities is adding value to members by marketing to attorneys and CPAs. Placed ad in Trusts & Estates magazines. NFP s NFP Securities mission statement to prospective reps focuses on its intention to be the premier broker/dealer serving & supporting independent advisors catering to high net worth clients. 298

NFP s NFP Securities outlines four key services it offers prospective reps in attempting to achieve its mission statement. NFP s NFP Securities claims to be guided by seven core principles, including its recent addition, continuous process improvement. NFP s NFP Securities assigns an in-house research team to summarize a barrage of investment & sales literature in what it calls the value-based solutions tool as part of its value-add proposition to prospective reps. Promotes need for independent entrepreneurs to have access to practice management and growth strategies. NFP s NFP Securities valuebased solutions web tool it promotes places reps at the center of its eight core components, including practice management tools & sales ideas. NFP s NFP Securities Value-Based Solutions Web Tool It Promotes Places Reps at the Center of Its Eight Core Components, Including Practice Management Tools & Sales Ideas NFP Securities Value-Based Solutions Tool Practice Management Upcoming Meetings & Forums Monthly Sales Ideas NFP s NFP Securities has a group called support services of twenty employees dedicated to helping reps optimize their revenues. Marketing Library Resources NFP Securities Rep Research Advisory Builder Latest Industry Trends NFP s NFP Securities provides Source: 2/25/04 NFP Rep Brochure; Tiburon Research & Analysis incoming reps with a dedicated transitions team intended to help ease their move. Transitions department in place since 2001 and helped 400+ firms & 1,100+ reps transition. NFP Securities promotes its transitions program as a core competency and claimed industry-unique transition web site and tools. Promotes customized nature of firm s transition program. NFP s NFP Securities transition team claims to provide incoming reps with four core services, including support & training. NFP s NFP Securities dedicated rep transition teams consist of a transition coordinator, licensing specialist, and transfers & appointments specialist. NFP s transitioning reps are also provided four other tools to aid in their moves to NFP Securities, including transition web page, mid-transaction training, presentation of transition guide, and assistance with other items. NFP s NFP Securities transition process involves three core steps, including registration, the transferal of business, and training. NFP s NFP Securities assesses a series of small fees to reps in the transition process. NFP s NFP Securities preliminary kit in the transition process entails four key pieces of paperwork, including a rep profile and an inquiry release form. 299

NFP s NFP Securities provides incoming (and outgoing) reps guidelines on the amount of time necessary to transfer assets into the program to allay potential timing issues. NFP s NFP Securities registration department provides prospective transitioning reps with tow kits, specifically an introduction and U4 package. NFP s NFP Securities offers reps the services of four consulting firms at additional fees to help streamline their businesses, including services from American Business Visions, Encore Partners, Legacy Planning & Family Dynamics, and SLZ Consulting. NFP s NFP s most widely used business building tool is its formal three person practice management division in Austin, TX and seven person firm relations department in New York, NY (the latter available only to acquired firms). NFP s NFP Securities practice management group works closely to support reps with initiatives for business building, providing specialized strategy sessions during intensive two-day meetings or weekly conference calls. NFP s NFP Securities practice management group delivers services through its web site, which includes a practice discount marketplace, hiring & staffing section, and a business planning module. NFP s NFP Securities also promotes the opportunity to buy other practices. Capital can be accessed at favorable rates. Kolinsky Hill Financial Group secured capital from NFP to acquire two life insurance producers and an employee benefits firm with NFP helping to facilitate the transfer. NFP s NFP Securities affiliates can also choose their own successors. Advisors can groom their own successors, sell their portion of the business to another NFP rep, or even buy another NFP rep s business. NFP s NFP Securities believes that meetings are one of its top three core value adds. Believes that it is well-known for this capability and has a very formal system but unlike that at most broker/dealers. NFP s NFP Securities holds two national conferences each year, including one just for acquired firms and the other for all affiliated firms. NFP s NFP Securities claims to hold 88 conferences annually beyond its national conferences. The types of conferences include affinity groups and study groups. NFP assists with funding and allows use of corporate staff and meeting planners. NFP also assists in content and membership. NFP s NFP Securities favors firm presentations versus external speakers at its conferences. NFP s NFP Securities organizes its continuing education requirements into regulatory and firm requirements to sit well within compliance guidelines. NFP s NFP Securities has two online education programs for its reps, including euniversity and NFP Securities University. 300

NFP s NFP Securities euniversity online education program provides reps with Webex presentations on topics ranging from operations to product training. Organization & Ownership The final section of NFP s profile will address its organizational structure of ownership. NFP s web site has five sections, including who we are, our services, investor relations, NFP news, and join NFP. NFP Securities web site is organized into two sections by visitor type: registered reps and partners. NFP Securities has a web site for its reps with many sections, including technology resources, advisory services, brokerage account services, and registration & transitions. NFP management team is led by Jessica Bibliowicz. NFP insurance services in led by Bruce Callahan. NFP Securities is Led by its CEO Daniel Young. NFP s Highland Capital acquisition was led by Richard Keidan since the death of John Robinson. Highland Capital s management team also includes: Todd Carlisle, Chief Operating Officer; Keith Duke, Chief Financial Officer; Robert Mann of Institutional Markets; Wilma Turner of Corporate Communications; Rob Shirley of Accounting; Charles Warlick of Technology: Tracy Price of Brokerage Marketing; Drew Lawrence of Brokerage Operations; and Bryan Schick of Advanced Markets. John Robinson, Highland Capital s former CEO and founder, passed away in 2004 at age 51; prior to founding Highland Capital, John Robinson founded Capital Strategies Group in 1983, where he worked as an independent producer; Richard Keidan was formerly president and COO of Phoenix Home Life s WS Griffith Securities and WS Griffith Advisors; Todd Carlisle also acts as general counsel, and was formerly at the law firm Sirote & Permutt; Keith Duke was formerly at Energy Asset Management. NFP s Pro Vise Management Group acquisition was led by Ray Ferrera and three other minority Partners. Other partners include: Bruce Fyfe, partner; Lew Prewett, partner; and Kimberly Adams, partner. NFP s Cash & Associates acquisition is led by John Cash III; the company s founder John Cash Jr. now serves as a financial & insurance advisor. Tracie Germino serves client service director and Ryan Evans as financial analyst. John Cash Jr. founded Cash & Associates in 1981; John Cash III joined the firm in 1990 after graduating from college. NFP s board of directors includes Jessica Bibliowicz and Marc Rowan. Other Board of Directors members include: Stephanie Abramson, Arthur Ainsberg, Shari Loessberg, and Marc Becker. NFP is a publicly traded company. Raised $239 million by selling over 10 million shares at $23 and closed the same day at $26. Apollo owned 40% at time of sale. IPO was primarily administered by Goldman Sachs, Merrill Lynch, and JP Morgan Chase. Smith 301

Barney declined to participate due to potential conflicts of interest. The goal was to acquire 200 firms with 1,500-2,000 reps before going public. NFP had 132 member firms at the time of the IPO. Another source said the goal was to wait until the IPO would generate $1 billion in proceeds. Some had believed that NFP would be acquired prior to its IPO; in 2001, Bob Keys of Private Consulting Group (NFP acquired firm) commented, NFP will be an attractive IPO for a number of reasons. There are potential synergies of 300-400 people. NFP will facilitate the sharing of ideas and promote joint networking among firms. And there is combined buying power when they design a product. NFP has over $1.2 billion total assets, which has more than doubled since 2002. NFP s Apollo partners has made a bundle by helping kick off NFP in the public sector; it has more than tripled its original $125 million investment. NFP now has a market capitalization of nearly $1.5 billion. NFP s NFP Securities has $15.0 million net excess capital, up 10% since 2006. NFP s one-half of shares outstanding are still owned by company insiders and Apollo Partners. Provada Provada is based in San Francisco, CA and led by its CEO, Lloyd Silver. History The first section of Provada s profile will explain the key historical events in the firm s development. Provada has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Provada s early phase. Middle Phase This section includes Provada s middle phase. Recent Phase This section includes Provada s recent phase. Statistics The second section of Provada s profile will review some key statistics regarding the firm. Businesses The third section of Provada s profile will outline its core businesses. Provada has three business, including insurance brokerage, life settlements, and agency outsourcing. 302

Insurance Brokerage Provada s first business is insurance brokerage. Life Settlements Provada s second business is life settlements. Agency Outsourcing Provada s third business is agency outsourcing. Organization & Ownership The final section of Provada s profile will address its organizational structure of ownership. Provada has five sections on its web site, including company, solutions, tools, press room, and contact us. Provada is led by its CEO Lloyd Silver. Provada is a privately owned company. Profiles of Insurance Industry Service Providers Below is a list of insurance regulators, trade groups & ratings agencies: ACINA Technologies Started off as the Insurance Distribution & Enrollment Magazine and was first published in 1997. ACINA Technologies has two conferences: Worksite Marketing Mania and Worksite Renaissance. Insurance letter began January 1999; currently has 14,884 subscribers. ACINA Technologies is led by its chairman, Walter Podgurski and CEO, James Ouimet. ACINA Technologies Comments Started off as the insurance distribution & enrollment magazine First published in 1997 Has two conferences Worksite Marketing Mania Worksite Renaissance Free services include: Insurance letter began January 1999; 14,884 subscribers no Chairman: Walter Podgurski CEO: James Ouimet Web sites: www.insurance-portal.com and www.worksite.net History Source: 7/11/01 Insurance Letter; 5/29/01 Insurance Letter; Tiburon Research & Analysis The first section of ACINA Technologies profile will explain the key historical events in the firm s development. ACINA Technologies has evolved through three phases, including its early, middle, and recent phases. Businesses The second section of ACINA Technologies profile will outline its core businesses. ACINA Technologies has a number of businesses. 303

Organization & Ownership The final section of ACINA Technologies profile will address its organizational structure of ownership. ACINA Technologies has a web site. ACINA Technologies is led by its chairman, Walter Podgurski and CEO, James Ouimet. ACINE Technologies is privately owned. Alabama State Commissioner Alabama State Commissioner is based in Montgomery, AL and is led by Walter Bell. Its web site is www.aldoi.org. History The first section of Alabama State Commissioner s profile will explain the key historical events in the firm s development. Alabama State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Alabama State Commissioner. This section will review the middle phase of the Alabama State Commissioner. This section will evaluate the recent phases of the Alabama State Commissioner. Businesses The third section of Alabama State Commissioner s profile will outline its core businesses. Alabama State Commissioner has different businesses. Organization & Ownership The final section of Alabama State Commissioner s profile will address is organizational structure & ownership. Alabama State Commissioner has a web site. Alabama State Commissioner is led by its state commissioner. Alabama State Commissioner is owned by the State. Alaska State Commissioner Alaska State Commissioner is based in Juneau, AK and is led by Linda Hall. Its web site is www.dced.state.ak.us/insurance. History The first section of Alaska State Commissioner s profile will explain the key historical events in the firm s development. 304

Alaska State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Alaska State Commissioner. This section will review the middle phase of the Alaska State Commissioner. This section will evaluate the recent phases of the Alaska State Commissioner. Businesses The third section of Alaska State Commissioner s profile will outline its core businesses. Alaska State Commissioner has different businesses. Organization & Ownership The final section of Alaska State Commissioner s profile will address is organizational structure & ownership. Alaska State Commissioner has a web site. Alaska State Commissioner is led by its state commissioner. Alaska State Commissioner is owned by the State. Alliance of American Insurers Alliance of American Insurers is a big trade group representing mostly small and midsized property and casualty insurance companies. Its web site is www.allianceai.org. History The first section of Alliance of American Insurers profile will explain the key historical events in the firm s development. Alliance of American Insurers was founded and has evolved through three phases, including its early, middle, and recent phases. Businesses The third section of Alliance of American Insurers profile will outline its core businesses. Alliance of American Insurers has a number of businesses. Organization & Ownership The final section of Alliance of American Insurers profile will address is organizational structure & ownership. Alliance of American Insurers has a web site. Alliance of American Insurers is led by its CEO. Alliance of American Insurers is owned by its investors. 305

AM Best Company AM Best was founded. History The first section of AM Best Company s profile will explain the key historical events in the firm s development. AM Best Company was has evolved through three phases, including its early, middle, and recent phase. Businesses The second section of AM Best Company s profile will outline its core businesses. AM Best Company has a number of businesses. Organization & Ownership The final section of AM Best Company s profile will address its organizational structure of ownership. AM Best Company has a web site. AM Best Company is led by its CEO. AM Best Company is privately owned. American Academy of Actuaries American Academy of Actuaries is based in Washington DC and is led by its president Neal Parmenter. It is a public policy and communications organization representing actuaries in all practice specialties. It serves as a liaison between federal and state governments, relations with other professions, dissemination of public information, and development of standards of professional conduct. American Academy of Actuaries Source: 12/04 Deloitte Insurance Industry Report; Tiburon Research & Analysis Comments Public policy and communications organization representing actuaries in all practice specialties Provides liaison with federal and state governments, relations with other professions, dissemination of public information, and development of standards of professional conduct Based in Washington DC President: Neal Parmenter Web Site: www.actuary.org History The first section of American Academy of Actuaries profile will explain the key historical events in the firm s development. American Academy of Actuaries was founded and has evolved through three phases, including its early, middle, and recent phases. 306

Businesses The third section of American Academy of Actuaries profile will outline its core businesses. American Academy of Actuaries has various businesses. Organization & Ownership The final section of American Academy of Actuaries profile will address is organizational structure & ownership. American Academy of Actuaries has a web site. American Academy of Actuaries is led by its president Neal Parmenter. American Academy of Actuaries is owned by its investors. American Council of Life Insurers (ACLI) American Council of Life Insurers is based in Washington, DC. Its 377 members represent 95% of US life insurance company assets. ACLI is a large organization that focuses on life insurance companies. Key personnel include chairman Thomas Sorrell, general counsel Gary Hushes or Carol Wilkerson, senior counsel Victoria Fimea, and lobbyist Phil Anderson. American Council of Life Insurers web site is www.acli.org. History The first section of American Council of Life Insurers profile will explain the key historical events in the firm s development. American Council of Life Insurers was founded and has evolved through three phases, including its early, middle, and recent phases. Businesses The third section of American Council of Life Insurers profile will outline its core businesses. American Council of Life Insurers has many businesses, including Access ACLI. American Council Life Insurers (ACLI) American Council of Life Insurers first business is American Council of Life Insurers (ACLI). American Council of Life Insurers ACLI has 377 members. Organization & Ownership The final section of American Council of Life Insurers profile will address is organizational structure & ownership. American Council of Life Insurers Access ACLI has a web site. American Council of Life Insurers Access ACLI is led by its CEO Frank Keating. 307

American Council of Life Insurers Access ACLI is owned by American Council of Life Insurers. American Insurance Association American Insurance Association was founded in 1866 and is based in Washington, DC. It is a trade organization for the property and casualty insurance providers. It is also the third trade group to create an optional charter. Key personnel include lobbyist Leigh Ann Pusey. American Insurance Association s web site is www.aiadc.org. American Insurance Association Comments Founded in 1866 Based in Washington, DC Trade organization for the property & casualty insurance providers Third trade group to create an optional charter Lobbyist: Leigh Ann Pusey Web site: www.aiadc.org History Source: 12/01/04 American Insurance Association Web Site; 7/25/01 American Banker; Tiburon Research & Analysis The first section of American Insurance Association s profile outlines the key historical events in the firm s development. American Insurance Association was founded in 1866 and has evolved through three phases, including its early, middle, & recent phases. Services The third section of American Insurance Association s profile will outline its core services. American Insurance Association has various businesses. Organization & Ownership The final section of American Insurance Association s profile outlines is organizational structure & ownership. American Insurance Association has a web site. American Insurance Association is led by its president. American Insurance Association is owned by its investors. American Risk & Insurance Association American Risk & Insurance Association is a professional association of insurance and risk management scholars and professionals, who publishes the Journal of Risk & Insurance. Its president is James Carson and the web site for the American Risk & Insurance Association is www.aria.org. History The first section of American Risk & Insurance Association s profile will explain the key historical events in the firm s development. 308

American Risk & Insurance Association was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the American Risk & Insurance Association. This section will review the middle phase of the American Risk & Insurance Association. This section will evaluate the recent phases of the American Risk & Insurance Association. Services The third section of American Risk & Insurance Association s profile will outline its core services. American Risk & Insurance Association has various businesses. Organization & Ownership The final section of American Risk & Insurance Association s profile will address is organizational structure & ownership. American Risk & Insurance Association has a web site American Risk & Insurance Association is led by its president James Carson. American Risk & Insurance Association is owned by its investors. American Society of Pension Professionals & Actuaries (ASPPA) American Society of Pension Professionals & Actuaries is based in Arlington, VA and has over 6,000 members. It is led by its CEO Brian Graff and President is Bruce Ashton. It educates pension actuaries, consultants, administrators, and other benefits professionals. American Society of Pension Actuaries web site is www.aspa.org. History The first section of American Society of Pension Professionals & Actuaries profile will explain the key historical events in the firm s development. American Society of Pension Professionals & Actuaries was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of American Society of Pension Professionals & Actuaries profile will outline its core services. American Society of Pension Professionals & Actuaries has various services. Organization & Ownership The final section of American Society of Pension Professionals & Actuaries profile will address is organizational structure & ownership. American Society of Pension Professionals & Actuaries has a web site. 309

American Society of Pension Professionals & Actuaries is led by its president Bruce Ashton. American Society of Pension Professionals & Actuaries is owned by its investors. America s Health Insurance Plans America s Health Insurance Plans is based in Washington, DC. The association is led by its president Karen Ignagni and its web site is www.ahip.org. History The first section of America s Health Insurance Plans profile will explain the key historical events in the firm s development. America s Health Insurance Plans was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of America s Health Insurance Plans profile will outline its core services. America s Health Insurance Plans has various services. Organization & Ownership The final section of America s Health Insurance Plans profile will address is organizational structure & ownership. America s Health Insurance Plans has a web site. America s Health Insurance Plans is led by its president. America s Health Insurance Plans is owned by its investors. Arizona State Commissioner Arizona State Commissioner is based in Phoenix, AZ and is led by Christina Urias. Its web site is www.id.state.az.us. History The first section of Arizona State Commissioner s profile will explain the key historical events in the firm s development. Arizona State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Arizona State Commissioner. This section will review the middle phase of the Arizona State Commissioner. This section will evaluate the recent phases of the Arizona State Commissioner. Businesses The third section of Arizona State Commissioner s profile will outline its core businesses. 310

Arizona State Commissioner has various businesses. Organization & Ownership The final section of Arizona State Commissioner s profile will address is organizational structure & ownership. Arizona State Commissioner has a web site. Arizona State Commissioner is led by Christina Urias. Arizona State Commissioner is owned by the state. Arkansas State Commissioner Arkansas State Commissioner is based in Little Rock, AR and is led Mike Pickens. Its web site is www.state.ar.us/insurance. History The first section of Arkansas State Commissioner s profile will explain the key historical events in the firm s development. Arkansas State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Arkansas State Commissioner. This section will review the middle phase of the Arkansas State Commissioner. This section will evaluate the recent phases of the Arkansas State Commissioner. Businesses The third section of Arkansas State Commissioner s profile will outline its core businesses. Arkansas State Commissioner has various businesses. Organization & Ownership The final section of Arkansas State Commissioner s profile will address is organizational structure & ownership. Arkansas State Commissioner has a web site. Arkansas State Commissioner is led by Mike Pickens. Arkansas State Commissioner is owned by the state. Association of Health Insurance Advisors Association of Health Insurance Advisors was founded in 1990 and is based in Falls Church, VA. The Association is led by its President, Lawrence Lounds. 311

History The first section of Association of Health Insurance Advisor s profile will explain the key historical events in the firm s development. Association of Health Insurance Advisors was founded in 1990 and has evolved through three phases, including its early, middle, and recent phases. Early Phase This section includes Association of Health Insurance Advisor s early phase. Association of Health Insurance Advisors Comments Founded in 1990 Based in Falls Church, VA President: Lawrence Lounds Web site: www.ahia.net Association of Health Insurance Advisors was founded in 1990. The firm is based in Falls Source: 9/19/07 AHIA Web Site; 11/99 M Group Conference Notes; Tiburon Research & Analysis Church, VA. In 1990, the National Association of Insurance and Financial Advisors (NAIFA) created AHIA to provide an organizational and professional focus within the NAIFA Federation. Middle Phase This section includes Association of Health Insurance Advisor s middle phase. Recent Phase This section includes Association of Health Insurance Advisor s recent phase. Association of Health Insurance Advisors continues to have strong ties with the National Association of Insurance and Financial Advisors. Health Insurance Advisors Works with more than 750 local & state associations and provides services to its members in the areas of legislation, professional development and educational programming. Businesses The second section of Association of Health Insurance Advisor s profile will outline its core businesses. Association of Health Insurance Advisors has a number of businesses. Organization & Ownership The final section of Association of Health Insurance Advisor s profile will address its organizational structure of ownership. Association of Health Insurance Advisors web site is designed for informational purposes and has six sections, including advocacy, membership benefits, why join, news & events, customer information, and about. Association of Health Insurance Advisors is led by its President, Lawrence Lounds. Association of Health Insurance Advisors is privately owned. 312

Association of Home Office Underwriters Association of Home Office Underwriters is an organization of home-office underwriters of life insurance companies, based in Atlanta, GA. Its president is Elizabeth Reinhart, and the web site is www.alu-web.org/ahou. History The first section of Association of Home Office Underwriters profile will explain the key historical events in the firm s development. Association of Home Office Underwriters was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Association of Home Office Underwriters profile will outline its core businesses. Association of Home Office Underwriters has various services. Organization & Ownership The final section of Association of Home Office Underwriters profile will address is organizational structure & ownership. Association of Home Office Underwriters has a web site. Association of Home Office Underwriters is led by its president Elizabeth Reinhart. Association of Home Office Underwriters is owned by its investors. Banc Insurance Services Banc Insurance Services is based in Springfield, MA. They are experts at the sale of insurance products through banks by providing community banks and credit unions with an ability to offer a full range of insurance products through a wholly owned insurance agency, all without the risks associated with operating a local insurance agency. Banc Insurance Services is led by its CEO Jeffrey Cheskey. Its web site is www.bancinsurance.net. Banc Insurance Services Source: 12/01/04 Banc Insurance Web Site; 8/14/01 Insurance Letter; Tiburon Research & Analysis Comments Based in Springfield, MA Experts at the sale of insurance products through banks Provide community banks and credit unions with an ability to offer a full range of insurance products through a wholly owned insurance agency, all without the risks associated with operating a local insurance agency CEO: Jeffrey Chesky Web site: www.bancinsurance.net History The first section of Banc Insurance Services profile will explain the key historical events in the firm s development. Banc Insurance Services was founded and has evolved through three phases, including its early, middle, & recent phases. 313

Services The second section of Banc Insurance Services profile will outline its core services. Banc Insurance Service has a number of services. Organization & Ownership The final section of Banc Insurance Services profile will address its organizational structure of ownership. Banc Insurance Services has a web site. Banc Insurance Services is led by its CEO Jeffrey Chesky. Banc Insurance Services is owned by its investors. California State Commissioner California State Commissioner is based in Los Angeles, CA and is led by John Garamendi. Its web site is www.insurance.ca.gov. History The first section of California State Commissioner s profile will explain the key historical events in the firm s development. California State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the California State Commissioner. This section will review the middle phase of the California State Commissioner. This section will evaluate the recent phases of the California State Commissioner. Businesses The third section of California State Commissioner s profile will outline its core businesses. California State Commissioner has various businesses. Organization & Ownership The final section of California State Commissioner s profile will address is organizational structure & ownership. California State Commissioner has a web site. California State Commissioner is led by John Garamendi. California State Commissioner is owned by the state. 314

Center for Economic Justice Center for Economic Justice is a non-profit that advocates for low-income consumers on insurance matters. History The first section of Center for Economic Justice s profile will explain the key historical events in the firm s development. Center for Economic Justice has evoloved through three phases, including its early, middle, & recent phases. Early Phase This section includes Center for Economic Justice s early phase. Middle Phase This section includes Center for Economic Justice s middle phase. Recent Phase This section includes Center for Economic Justice s recent phase. Businesses The second section of Center for Economic Justice s profile will outline its core businesses. Center for Economic Justice has a number of businesses. Organization & Ownership The final section of Center for Economic Justice s profile will address its organizational structure of ownership. Center for Economic Justice has a web site. Center for Economic Justice is led by its CEO. Center for Economic Justice is privately owned. Center for Insurance Research Center for Insurance Research is a consumer advocacy group based in Cambridge, MA. Its president is Brendan Bridgeland and the web site is http://world.std.com/~cir/. Center for Insurance Research Comments Based in Cambridge, MA Consumer advocacy group President: Brendan Bridgeland Web site: http://world.std.com/~cir/ History The first section of Center for Source: Tiburon Research & Analysis Insurance Research s profile will explain the key historical events in the firm s development. 315

Center for Insurance Research was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Center for Insurance Research s profile will outline its core services. Center for Insurance Research has numerous services. Organization & Ownership The final section of Center for Insurance Research s profile will address is organizational structure & ownership. Center for Insurance Research has a web site. Center for Insurance Research is led by its President Brendan Bridgeland. Center for Insurance Research is owned by its investors. Colorado State Commissioner Colorado State Commissioner is based in Denver, CO and is led by David Rivera. Its web site is www.dora.state.co.us/insurance. History The first section of Colorado State Commissioner s profile will explain the key historical events in the firm s development. Colorado State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Colorado State Commissioner. This section will review the middle phase of the Colorado State Commissioner. This section will evaluate the recent phases of the Colorado State Commissioner. Businesses The third section of Colorado State Commissioner s profile will outline its core businesses. Colorado State Commissioner has various businesses. Organization & Ownership The final section of Colorado State Commissioner s profile will address is organizational structure & ownership. Colorado State Commissioner has a web site. Colorado State Commissioner is led by David Rivera. Colorado State Commissioner is owned by the state. 316

Conference of Consulting Actuaries Conference of Consulting Actuaries is based in Buffalo Grove, IL and is led by its president Margaret Tiller Sherwood. Its web site is www.ccactuaries.org. Conference of Consulting Actuaries Comments Based in Buffalo Grove, IL Consulting actuaries President: Margaret Tiller Sherwood Web site: www.ccactuaries.org History The first section of Conference of Consulting Actuaries profile will explain the key historical events in the firm s development. Conference of Consulting Source: 12/05 Conference of Consulting Actuaries Web Site; Tiburon Research & Analysis Actuaries was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Conference of Consulting Actuaries profile will outline its core services. Conference of Consulting Actuaries has various services. Organization & Ownership The final section of Conference of Consulting Actuaries profile will address is organizational structure & ownership. Conference of Consulting Actuaries has a web site. Conference of Consulting Actuaries is led by its president Margaret Tiller Sherwood. Conference of Consulting Actuaries is owned by its investors. Connecticut State Commissioner Connecticut State Commissioner is based in Hartford, CT and is led by Susan Cogswell. Its web site is www.ct.gov/cid. History The first section of Connecticut State Commissioner s profile will explain the key historical events in the firm s development. Connecticut State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Connecticut State Commissioner. This section will review the middle phase of the Connecticut State Commissioner. This section will evaluate the recent phases of the Connecticut State Commissioner. 317

Businesses The third section of Connecticut State Commissioner s profile will outline its core businesses. Connecticut State Commissioner has various businesses. Organization & Ownership The final section of Connecticut State Commissioner s profile will address is organizational structure & ownership. Connecticut State Commissioner has a web site. Connecticut State Commissioner is led by Susan Cogswell. Connecticut State Commissioner is owned by the state. Consumer Credit Insurance Association Consumer Credit Insurance Association is based in Chicago, IL and is led by chairman Claudia Ormrod. It is a trade organization for insurers that underwrites credit insurance. They cover life, accident and health, property, and involuntary unemployment insurance. They can be found online at www.cciaonline.com. History The first section of Consumer Credit Insurance Association s profile will explain the key historical events in the firm s development. Consumer Credit Insurance Association was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Consumer Credit Insurance Association s profile will outline its core services. Consumer Credit Insurance Association has various services. Organization & Ownership The final section of Consumer Credit Insurance Association s profile will address is organizational structure & ownership. Consumer Credit Insurance Association has a web site. Consumer Credit Insurance Association is led by its chairman Claudia Ormrod. Consumer Credit Insurance Association is owned by its investors. Consumer Federation of America Consumer Federation of America was founded in 1968 and is based in Washington, DC. Federation is an advocacy, research, education, and service organization that includes the National Insurance Consumer Organization. Consumer Federation of America is led by its Director of Insurance, Robert Hunter. 318

History The first section of Consumer Federation of America s profile will explain the key historical events in the firm s development. Consumer Federation of America was founded in 1968 and has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Consumer Federation of America s early phase. Consumer Federation of America Comments Founded in 1968 Based in Washington, DC An advocacy, research, education, and service organization Includes the National Insurance Consumer Organization Director of Insurance: Robert Hunter Web site: www.consumerfed.org Middle Phase This section includes Consumer Federation of America s middle phase. Source: 12/01/04 Consumer Federation Web Site; 7/9/01 Wall Street Journal; Tiburon Research & Analysis Recent Phase This section includes Consumer Federation of America s recent phase. Statistics The second section of Consumer Federation of America s profile will review some key statistics regarding the firm. Businesses The third section of Consumer Federation of America s profile will outline its core businesses. Consumer Federation of America has a number of businesses. Organization & Ownership The final section of Consumer Federation of America s profile will address its organizational structure of ownership. Consumer Federation of America has a web site. Consumer Federation of America is led by its Director of Insurance, Robert Hunter. Consumer Federation of America is privately owned. Delaware State Commissioner Delaware State Commissioner is based in Dover, DE and is led by Matthew Den. Its web site is www.state.de.us/inscom. History The first section of Delaware State Commissioner s profile will explain the key historical events in the firm s development. 319

Delaware State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Delaware State Commissioner. This section will review the middle phase of the Delaware State Commissioner. This section will evaluate the recent phases of the Delaware State Commissioner. Businesses The third section of Delaware State Commissioner s profile will outline its core businesses. Delaware State Commissioner has various businesses. Organization & Ownership The final section of Delaware State Commissioner s profile will address is organizational structure & ownership. Delaware State Commissioner has a web site. Delaware State Commissioner is led by Matthew Denn. Delaware State Commissioner is owned by the state. District of Columbia State Commissioner District of Columbia State Commissioner is based in Washington, DC and is led by Lawrence Mirel. Its web site is www.disr.washingtondc.gov. History The first section of District of Columbia State Commissioner s profile will explain the key historical events in the firm s development. District of Columbia State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the District of Columbia State Commissioner. This section will review the middle phase of the District of Columbia State Commissioner. This section will evaluate the recent phases of the District of Columbia State Commissioner. Businesses The third section of District of Columbia State Commissioner s profile will outline its core businesses. District of Columbia State Commissioner has various businesses. 320

Organization & Ownership The final section of District of Columbia State Commissioner s profile will address is organizational structure & ownership. District of Columbia State Commissioner has a web site. District of Columbia State Commissioner is led by Lawrence Mirel. District of Columbia State Commissioner is owned by the state. Florida State Commissioner Florida State Commissioner is based in Tallahassee, FL and is led by Tom Gallagher. Its web site is www.fldfs.com. History The first section of Florida State Commissioner s profile will explain the key historical events in the firm s development. Florida State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Florida State Commissioner. This section will review the middle phase of the Florida State Commissioner. This section will evaluate the recent phases of the Florida State Commissioner. Businesses The third section of Florida State Commissioner s profile will outline its core businesses. Florida State Commissioner has various businesses. Organization & Ownership The final section of Florida State Commissioner s profile will address is organizational structure & ownership. Florida State Commissioner has a web site. Florida State Commissioner is led by Tom Gallagher. Florida State Commissioner is owned by the state. GAMA International Gama International was founded and has a web stie at www.gamaweb.com. History The first section of GAMA International s profile will explain the key historical events in the firm s development. Gama International has evolved through three phases, including its early, middle, and recent phases. 321

Early Phase This section includes GAMA International s early phase. Middle Phase This section includes GAMA International s middle phase. Recent Phase This section includes GAMA International s recent phase. Statistics The second section of GAMA International s profile will review some key statistics regarding the firm. Businesses The third section of GAMA International s profile will outline its core businesses. Gama International has a number of businesses. Organization & Ownership The final section of GAMA International s profile will address its organizational structure of ownership. Gama International has a web site. Gama International is led by its CEO. Gama International is privately owned. Georgia State Commissioner Georgia State Commissioner is based in Atlanta, GA and is led by John Oxendine. Its web site is www.gainsurance.org. History The first section of Georgia State Commissioner s profile will explain the key historical events in the firm s development. Georgia State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Georgia State Commissioner. This section will review the middle phase of the Georgia State Commissioner. This section will evaluate the recent phases of the Georgia State Commissioner. Businesses The third section of Georgia State Commissioner s profile will outline its core businesses. Georgia State Commissioner has various businesses. 322

Organization & Ownership The final section of Georgia State Commissioner s profile will address is organizational structure & ownership. Georgia State Commissioner has a web site. Georgia State Commissioner is led by John Oxendine. Georgia State Commissioner is owned by the state. Griffith Foundation for Insurance Education Griffith Foundation for Insurance Education is based in Columbus, OH and is led by its chairman David Washburn. The foundation promotes education of risk management and insurance. Its web site is www.griffithfoundation.org. Griffith Foundation for Insurance Education Comments Based in Columbus, OH Promotes education of risk management and insurance Chairman: David Washburn Web site: www.griffithfoundation.org History The first section of Griffith Foundation for Insurance Education s profile will explain the key historical events in the firm s development. Source: 12/05 Griffith Foundation for Insurance Education Web Site; Tiburon Research & Analysis Griffith Foundation for Insurance Education was founded and has evolved through three phases, including its early, middle, and recent phases. Services The third section of Griffith Foundation for Insurance Education s profile will outline its core services. Griffith Foundation for Insurance Education has various services. Organization & Ownership The final section of Griffith Foundation for Insurance Education s profile will address is organizational structure & ownership. Griffith Foundation for Insurance Education has a web site. Griffith Foundation for Insurance Education is led by its chairman David Washburn. Griffith Foundation for Insurance Education is owned by its investors. Hawaii State Commissioner Hawaii State Commissioner is based in Honolulu, HI and is led by JP Schmidt. Its web site is www.state.hi.us/dcca/ins. 323

History The first section of Hawaii State Commissioner s profile will explain the key historical events in the firm s development. Hawaii State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Hawaii State Commissioner. This section will review the middle phase of the Hawaii State Commissioner. This section will evaluate the recent phases of the Hawaii State Commissioner. Businesses The third section of Hawaii State Commissioner s profile will outline its core businesses. Hawaii State Commissioner has various businesses. Organization & Ownership The final section of Hawaii State Commissioner s profile will address is organizational structure & ownership. Hawaii State Commissioner has a web site. Hawaii State Commissioner is led by JP Schmidt. Hawaii State Commissioner is owned by the state. Idaho State Commissioner Idaho State Commissioner is based in Boise, ID and is led by Mary Hartung. Its web site is www.doi.state.id.us. History The first section of Idaho State Commissioner s profile will explain the key historical events in the firm s development. Idaho State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Idaho State Commissioner. This section will review the middle phase of the Idaho State Commissioner This section will evaluate the recent phases of the Idaho State Commissioner. Businesses The third section of Idaho State Commissioner s profile will outline its core businesses. Idaho State Commissioner has various businesses. 324

Organization & Ownership The final section of Idaho State Commissioner s profile will address is organizational structure & ownership. Idaho State Commissioner has a web site. Idaho State Commissioner is led by Mary Hartung. Idaho State Commissioner is owned by the state. Illinois State Commissioner Illinois State Commissioner is based in Springfield, IL and is led by Deirdre Manna. Its web site is www.ins.state.il.us. History The first section of Illinois State Commissioner s profile will explain the key historical events in the firm s development. Illinois State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Illinois State Commissioner. This section will review the middle phase of the Illinois State Commissioner. This section will evaluate the recent phases of the Illinois State Commissioner. Businesses The third section of Illinois State Commissioner s profile will outline its core businesses. Illinois State Commissioner has various businesses. Organization & Ownership The final section of Illinois State Commissioner s profile will address is organizational structure & ownership. Illinois State Commissioner has a web site. Illinois State Commissioner is led by Deirdre Manna. Illinois State Commissioner is owned by the state. Independent Insurance Agents of America Independent Insurance Agents of America was founded in 1896 and is based in Washington, DC. Independent Insurance Agents of America acts as an association of independent insurance agents & brokers. History The first section of Independent Insurance Agents of America s profile will explain the key historical events in the firm s development. 325

Independent Insurance Agents of America was founded in 1896 and has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes Independent Insurance Agents of America s early phase. Middle Phase This section includes Independent Insurance Agents of America s middle phase. Independent Insurance Agents of America Comments Founded in 1896 Based in Washington, DC Association of independent insurance agents & brokers Web site: www.iiaa.org Recent Phase This section includes Independent Insurance Agents of America s recent phase. Source: 12/01/04 Independent Insurance Agents of America Web Site; Tiburon Research & Analysis Statistics The second section of Independent Insurance Agents of America s profile will review some key statistics regarding the firm. Businesses The third section of Independent Insurance Agents of America s profile will outline its core businesses. Independent Insurance Agents of America has a number of businesses. Organization & Ownership The final section of Independent Insurance Agents of America s profile will address its organizational structure of ownership. Independent Insurance Agents of America has a web site. Independent Insurance Agents of America is led by its CEO. Independent Insurance Agents of America is privately owned. Indiana State Commissioner Indiana State Commissioner is based in Indianapolis, IN and is led by Amy Strati. Its web site is www.in.gov.idoi. History The first section of Indiana State Commissioner s profile will explain the key historical events in the firm s development. Indiana State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. Businesses The third section of Indiana State Commissioner s profile will outline its core businesses. 326

Indiana State Commissioner has various businesses. Organization & Ownership The final section of Indiana State Commissioner s profile will address is organizational structure & ownership. Indiana State Commissioner has a web site. Indiana State Commissioner is led by Amy Strati. Indiana State Commissioner is owned by the state. Insurance Accounting & Systems Association Insurance Accounting & Systems Accounting is based in Durham, NC and is led by its president Douglas Yenzer. The company transfers ideas and information among insurancerelated professionals. Its web site is www.iasa.org. Insurance Accounting & Systems Association Comments Based in Durham, NC Transfers ideas and information among insurancerelated professionals President: Douglas Yenzer Web site: www.iasa.org History The first section of Insurance Accounting & Systems Association s profile will explain the key historical events in the firm s development. Source: 12/05 Insurance & Financial Communicators Association Web Site; Tiburon Research & Analysis Insurance Accounting & Systems Accounting was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Insurance Accounting & Systems Association s profile will outline its core services. Insurance Accounting & Systems Association has various services. Organization & Ownership The final section of Insurance Accounting & Systems Association s profile will address is organizational structure & ownership. Insurance Accounting & Systems Accounting has a web site. Insurance Accounting & Systems Accounting is led by its president Douglas Yenzer. Insurance Accounting & Systems Accounting is owned by its investors. 327

Insurance & Financial Communicators Association Insurance & Financial Communicators Association is based in East Rutherford, New Jersey and is led by Gregg Cromeans. Its web site is www.ifconline.org. History The first section of Insurance & Financial Communicators Association s profile will explain the key historical events in the firm s development. Insurance & Financial Communicators Association was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Insurance & Financial Communicators Association s profile will outline its core services. Insurance & Financial Communicators Association has various services. Organization & Ownership The final section of Insurance & Financial Communicators Association s profile will address is organizational structure & ownership. Insurance & Financial Communicators Association has a web site. Insurance & Financial Communicators Association is led by its president Gregg Cromeans. Insurance & Financial Communicators Association is owned by its investors. Insurance Information Institute Insurance Information Institute is based in New York, NY and is led by its chief economist Robert Hartwig. Its web site is www.iii.org. History The first section of Insurance Information Institute s profile will explain the key historical events in the firm s development. Insurance Information Institute was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Insurance Information Institute s profile will outline its core services. Insurance Information Institute has various services. Organization & Ownership The final section of Insurance Information Institute s profile will address is organizational structure & ownership. Insurance Information Institute has a web site. Insurance Information Institute is led by its chief economist Robert Hartwig. 328

Insurance Information Institute is owned by its investors. Insurance Marketplace Standards Association Insurance Marketplace Standards Association was founded in 1998 and is based in Washington, DC. The company is dedicated to improving insurers images and promoting ethical sales standards among agents and brokers who sell life insurance and annuities. IMSA is a coalition of leading insurance companies, with top executives from 16 major insurers having formed the group to head off potential federal or state legislation, and to curb sales violations. 227 insurers representing 82% of annual life insurance premiums have joined the organization. To secure membership, insurers must hire independent assessors trained by the organization to certify that the companies have procedures in place to safeguard against abuses. IMSA is to issue its seal as a Good Housekeeping Seal of Approval, despite LIMRA having questioned its effectiveness. History The first section of Insurance Marketplace Standards Association s profile will explain the key historical events in the firm s development. Insurance Marketplace Standards Association was founded in 1998 and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Insurance Marketplace Standards Association s profile will outline its core services. Insurance Marketplace Standards Association has various services. Organization & Ownership The final section of Insurance Marketplace Standards Association s profile will address is organizational structure & ownership. Insurance Marketplace Standards Association has a web site. Insurance Marketplace Standards Association is led by its president. Insurance Marketplace Standards Association is owned by its investors. Insurance Services Office Comments Based in Jersey City, NJ Provide data, analytics, and decision-support services for professionals in many fields, including insurance, finance, real estate, health services, government, and human resources Web site: www.iso.com Insurance Services Office Insurance Services Office is based in Jersey City, NJ. It provides data, analytics, and decision-support services for professionals in many fields, Source: 12/04/01 Insurance Services Office Web Site; 7/11/01 Wall Street Journal; Tiburon Research & Analysis including insurance, finance, 329

real estate, health services, government, and human resources. The company web site is www.iso.com. History The first section of Insurance Services Office s profile will explain the key historical events in the firm s development. Insurance Services Office was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Insurance Services Office s profile will outline its core services. Insurance Services Office has various services. Organization & Ownership The final section of Insurance Services Office s profile will address is organizational structure & ownership. Insurance Services Office has a web site. Insurance Services Office is led by its president. Insurance Services Office is owned by its investors. International Claim Association International Claim Association is based in Washington, DC and is led by its president William Wade. The company is comprised of insurance officers handling company claims services. The company web site is www.claim.org. History The first section of International Claim Association s profile will explain the key historical events in the firm s development. International Claim Association was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of International Claim Association s profile will outline its core services. International Claim Association has various services. Organization & Ownership The final section of International Claim Association s profile will address is organizational structure & ownership. International Claim Association has a web site. International Claim Association is led by its president William Wade. International Claim Association is owned by its investors. 330

International Insurance Society International Insurance Society was founded in 1954. It has 1,000 members comprised of a multinational group of financial services executives and academics. International Insurance Society is led by its CEO Patrick Kenny. The company web site is www.iiagroup.com. History The first section of International Insurance Society s profile will explain the key historical events in the firm s development. International Insurance Society was founded in 1954 and has evolved through three phases, including its early, middle, & recent phases. Services The third section of International Insurance Society s profile will outline its core services. International Insurance Society has various services. Organization & Ownership The final section of International Insurance Society s profile will address is organizational structure & ownership. International Insurance Society has a web site. International Insurance Society is led by its CEO Patrick Kenny. International Insurance Society is owned by its investors. Iowa State Commissioner Iowa State Commissioner is based in Des Moines, IA and is led by Therese Vaughan. Its web site is www.iid.state.ia.us. History The first section of Iowa State Commissioner s profile will explain the key historical events in the firm s development. Iowa State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Iowa State Commissioner. This section will review the middle phase of the Iowa State Commissioner. This section will evaluate the recent phases of the Iowa State Commissioner. Businesses The third section of Iowa State Commissioner s profile will outline its core businesses. Iowa State Commissioner has various businesses. 331

Organization & Ownership The final section of Iowa State Commissioner s profile will address is organizational structure & ownership. Iowa State Commissioner has a web site. Iowa State Commissioner is led by Therese Vaughan. Iowa State Commissioner is owned by the state. Journal of Risk & Insurance Journal of Risk & Insurance was founded. History The first section of Journal of Risk & Insurance s profile will explain the key historical events in the firm s development. Journal of Risk & Insurance has evolved through three phases, including its early, middle, and recent phases. Early Phase This section includes Journal of Risk & Insurance s early phase. Middle Phase This section includes Journal of Risk & Insurance s middle phase. Recent Phase This section includes Journal of Risk & Insurance s recent phase. Statistics The second section of Journal of Risk & Insurance s profile will review some key statistics regarding the firm. Businesses The third section of Journal of Risk & Insurance s profile will outline its core businesses. Journal of Risk & Insurance has a number of businesses. Organization & Ownership The final section of Journal of Risk & Insurance s profile will address its organizational structure of ownership. Journal of Risk & Insurance has a web site. Journal of Risk & Insurance is led by its CEO. Journal of Risk & Insurance is privately owned. Kansas State Commissioner Kansas State Commissioner is based in Topeka, KS and is led by Sandy Praeger. Its web site is www.ksinsurance.org. 332

History The first section of Kansas State Commissioner s profile will explain the key historical events in the firm s development. Kansas State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Kansas State Commissioner. This section will review the middle phase of the Kansas State Commissioner. This section will evaluate the recent phases of the Kansas State Commissioner. Businesses The third section of Kansas State Commissioner s profile will outline its core businesses. Kansas State Commissioner has various businesses. Organization & Ownership The final section of Kansas State Commissioner s profile will address is organizational structure & ownership. Kansas State Commissioner has a web site. Kansas State Commissioner is led by Sandy Praeger. Kansas State Commissioner is owned by the state. Kentucky State Commissioner Kentucky State Commissioner is based in Frankfurt, KY and is led by Martin Koetters. Its web site is doi.ppr.ky.gov/kentucky. History The first section of Kentucky State Commissioner s profile will explain the key historical events in the firm s development. Kentucky State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Kentucky State Commissioner. This section will review the middle phase of the Kentucky State Commissioner. This section will evaluate the recent phases of the Kentucky State Commissioner. Businesses The third section of Kentucky State Commissioner s profile will outline its core businesses. Kentucky State Commissioner has various businesses. 333

Organization & Ownership The final section of Kentucky State Commissioner s profile will address is organizational structure & ownership. Kentucky State Commissioner has a web site. Kentucky State Commissioner is led by Martin Koetters. Kentucky State Commissioner is owned by the state. Life Insurance Marketing & Research Association (LIMRA) Life Insurance Marketing & Research Association is based in Windsor, CT and represents 750 insurance and financial services companies worldwide. Life Insurance Marketing & Research Association (LIMRA) Comments Based in Windsor, CT Represents 750 insurance and financial services companies worldwide History The first section of Life Insurance Marketing & Research Association s profile will explain the key historical events in the firm s development. Source: 11/1/99 Investment News; Tiburon Research & Analysis Life Insurance Marketing & Research Association was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Life Insurance Marketing & Research Association s profile will outline its core services. Life Insurance Marketing & Research Association has various services. Organization & Ownership The final section of Life Insurance Marketing & Research Association s profile will address is organizational structure & ownership. Life Insurance Marketing & Research Association has a web site. Life Insurance Marketing & Research Association is led by its president. Life Insurance Marketing & Research Association is owned by its investors. Life Office Management Association (LOMA) Life Office Management Association is based in Atlanta, GA and is led by its chairman John Gilbert. LOMA s goal is to improve management and operations through employee development, research, information sharing, and product and services. The company web site is www.loma.org. 334

History The first section of Life Office Management Association s profile will explain the key historical events in the firm s development. Life Office Management Association was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Life Office Management Association s profile will outline its core services. Life Office Management Association has various services. Organization & Ownership The final section of Life Office Management Association s profile will address is organizational structure & ownership. Life Office Management Association has a web site. Life Office Management Association is led by its chairman John Gilbert. Life Office Management Association is owned by its investors. Life Plans Life Plans was founded in 1987 and is based in Waltham, MA. It is a long-term care market research firm with expertise in underwriting, and claim and capital management. Life Plans president is Don Charsky. The company web site is www.lifeplansinc.com. History The first section of Life Plans profile will explain the key historical events in the firm s development. Life Plans was founded in 1987 and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Life Plans profile will outline its core services. Life Plans has various services. Organization & Ownership The final section of Life Plans profile will address is organizational structure & ownership. Life Plans has a web site. Life Plans is led by its president Don Charsky. Life Plans is owned by its investors. 335

Long Term Care Long Term Care is led by Martin Bayne and can be found online at www.mrltc.com. History The first section of Long Term Care s profile will explain the key historical events in the firm s development. Long Term Care was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Long Term Care s profile will outline its core services. Long Term Care has various services. Organization & Ownership The final section of Long Term Care s profile will address is organizational structure & ownership. Long Term Care has a web site. Long Term Care is led by Martin Bayne. Long Term Care is owned by its investors. Louisiana State Commissioner Louisiana State Commissioner is based in Baton Rouge, LA and is led by Robert Wooley. Its web site is www.ldi.state.la.us. History The first section of Louisiana State Commissioner s profile will explain the key historical events in the firm s development. Louisiana State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Louisiana State Commissioner. This section will review the middle phase of the Louisiana State Commissioner. This section will evaluate the recent phases of the Louisiana State Commissioner. Businesses The third section of Louisiana State Commissioner s profile will outline its core businesses. Louisiana State Commissioner has various businesses. Organization & Ownership The final section of Louisiana State Commissioner s profile will address is organizational structure & ownership. 336

Louisiana State Commissioner has a web site. Louisiana State Commissioner is led by Robert Wooley. Louisiana State Commissioner is owned by the state. Maine State Commissioner Maine State Commissioner is based in Augusta, ME and is led by Alessandro Iuppa. Its web site is www.state.me.us/pfr/ins/ins_index.htm. History The first section of Maine State Commissioner s profile will explain the key historical events in the firm s development. Maine State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Maine State Commissioner. This section will review the middle phase of the Maine State Commissioner. This section will evaluate the recent phases of the Maine State Commissioner. Businesses The third section of Maine State Commissioner s profile will outline its core businesses. Maine State Commissioner has various businesses. Organization & Ownership The final section of Maine State Commissioner s profile will address is organizational structure & ownership. Maine State Commissioner has a web site. Maine State Commissioner is led by Alessandro Iuppa. Maine State Commissioner is owned by the state. Maryland State Commissioner Maryland State Commissioner is based in Baltimore, MD and is led by Alfred Redmer. Its web site is www.mdinsurance.state.md.us. History The first section of Maryland State Commissioner s profile will explain the key historical events in the firm s development. Maryland State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Maryland State Commissioner. 337

This section will review the middle phase of the Maryland State Commissioner. This section will evaluate the recent phases of the Maryland State Commissioner. Businesses The third section of Maryland State Commissioner s profile will outline its core businesses. Maryland State Commissioner has various businesses. Organization & Ownership The final section of Maryland State Commissioner s profile will address is organizational structure & ownership. Maryland State Commissioner has a web site. Maryland State Commissioner is led by Alfred Redmer. Maryland State Commissioner is owned by the state. Massachusetts State Commissioner Massachusetts State Commissioner is based in Boston, MA and is led by Julianne Bowler. Its web site is www.state.ma.us/doi. History The first section of Massachusetts State Commissioner s profile will explain the key historical events in the firm s development. Massachusetts State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Massachusetts State Commissioner. This section will review the middle phase of the Massachusetts State Commissioner. This section will evaluate the recent phases of the Massachusetts State Commissioner. Businesses The third section of Massachusetts State Commissioner s profile will outline its core businesses. Massachusetts State Commissioner has various businesses. Organization & Ownership The final section of Massachusetts State Commissioner s profile will address is organizational structure & ownership. Massachusetts State Commissioner has a web site. Massachusetts State Commissioner is led by Julianne Bowler. 338

Massachusetts State Commissioner is owned by the state. Medical Information Bureau Group (MIB) Medical Information Bureau Group is based in Westwood, MA and is led by its chairman James Zilinski. It is a non-profit company that provides a central information exchange for over 600 member life insurance companies. MIB also provides information on health or risk activities to alert insurers on inaccuracies, omissions, and fraud with applicant consent. The company web site is www.mib.com. Medical Information Bureau Group (MIB) Comments Based in Westwood, MA Nonprofit providing a central information exchange for over 600 member life insurance companies Provides information on health or risk activities to alert insurers on inaccuracies, omissions, and fraud with applicant consent Chairman: James Zilinski Web site: www.mib.com Source: 12/05 Medical Information Bureau Group Web Site; 12/04 Deloitte Insurance Industry Report; Tiburon Research & Analysis History The first section of Medical Information Bureau Group s profile will explain the key historical events in the firm s development. Medical Information Bureau Group was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Medical Information Bureau Group s profile will outline its core services. Medical Information Bureau Group has various services. Organization & Ownership The final section of Medical Information Bureau Group s profile will address is organizational structure & ownership. Medical Information Bureau Group has a web site. Medical Information Bureau Group is led by its chairman James Zilinski. Medical Information Bureau Group is owned by its investors. Michigan State Commissioner Michigan State Commissioner is based in Lansing, MI and is led by Linda Watters. Its web site is www.michigan.gov/cis. History The first section of Michigan State Commissioner s profile will explain the key historical events in the firm s development. 339

Michigan State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Michigan State Commissioner. This section will review the middle phase of the Michigan State Commissioner. This section will evaluate the recent phases of the Michigan State Commissioner. Businesses The third section of Michigan State Commissioner s profile will outline its core businesses. Michigan State Commissioner has various businesses. Organization & Ownership The final section of Michigan State Commissioner s profile will address is organizational structure & ownership. Michigan State Commissioner has a web site. Michigan State Commissioner is led by Linda Watters. Michigan State Commissioner is owned by the state. Minnesota State Commissioner Minnesota State Commissioner is based in Saint Paul, MN and is led by Glenn Wilson. Its web site is www.state.mn.us/cgi-bin/portal/mn/jsp/home.do?agency=commerce. History The first section of Minnesota State Commissioner s profile will explain the key historical events in the firm s development. Minnesota State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Minnesota State Commissioner. This section will review the middle phase of the Minnesota State Commissioner. This section will evaluate the recent phases of the Minnesota State Commissioner. Businesses The third section of Minnesota State Commissioner s profile will outline its core businesses. Minnesota State Commissioner has various businesses. Organization & Ownership The final section of Minnesota State Commissioner s profile will address is organizational structure & ownership. 340

Minnesota State Commissioner has a web site. Minnesota State Commissioner is led by Glenn Wilson. Minnesota State Commissioner is owned by the state. Mississippi State Commissioner Mississippi State Commissioner is based in Jackson, MS and is led by George Dale. Its web site is www.doi.state.ms.us. History The first section of Mississippi State Commissioner s profile will explain the key historical events in the firm s development. Mississippi State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Mississippi State Commissioner. This section will review the middle phase of the Mississippi State Commissioner. This section will evaluate the recent phases of the Mississippi State Commissioner. Businesses The third section of Mississippi State Commissioner s profile will outline its core businesses. Mississippi State Commissioner has various businesses. Organization & Ownership The final section of Mississippi State Commissioner s profile will address is organizational structure & ownership. Mississippi State Commissioner has a web site. Mississippi State Commissioner is led by George Dale. Mississippi State Commissioner is owned by the state. Missouri State Commissioner Missouri State Commissioner is based in Jefferson City, MO and is led by Scott Lakin. Its web site is www.insurance.mo.gov. History The first section of Missouri State Commissioner s profile will explain the key historical events in the firm s development. Missouri State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. 341

This section will discuss the early phase of the Missouri State Commissioner. This section will review the middle phase of the Missouri State Commissioner. This section will evaluate the recent phases of the Missouri State Commissioner. Businesses The third section of Missouri State Commissioner s profile will outline its core businesses. Missouri State Commissioner has various businesses. Organization & Ownership The final section of Missouri State Commissioner s profile will address is organizational structure & ownership. Missouri State Commissioner has a web site. Missouri State Commissioner is led by Scott Lakin. Missouri State Commissioner is owned by the state. Montana State Commissioner Montana State Commissioner is based in Helena, MT and is led by John Morrison. Its web site is www.sao.state.mt.us. History The first section of Montana State Commissioner s profile will explain the key historical events in the firm s development. Montana State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Montana State Commissioner. This section will review the middle phase of the Montana State Commissioner. This section will evaluate the recent phases of the Montana State Commissioner. Businesses The third section of Montana State Commissioner s profile will outline its core businesses. Montana State Commissioner has various businesses. Organization & Ownership The final section of Montana State Commissioner s profile will address is organizational structure & ownership. Montana State Commissioner has a web site. 342

Montana State Commissioner is led by John Morrison. Montana State Commissioner is owned by the state. Moody s Moody s is based in New York, NY. The firm has 2,500 employees, $1.4 billion in revenues, $425 million net income, and is led by its CEO Ray McDaniel. History The first section of Moody s profile will explain the key historical events in the firm s development. Moody s has evolved through three phases, including its early, middle, & recent phases. Businesses The second section of Moody s profile will outline its core businesses. Organization & Ownership The final section of Moody s profile will address its organizational structure of ownership. Moody s has a web site. Moody s is led by its CEO Ray McDaniel. National Association of Independent Life Brokerage Agencies National Association of Independent Life Brokerage Agencies coordinates National Brokerage general agencies (BGAs) serving insurance and advisors. National Association of Independent Life Brokerage Agencies Comments Brokerage general agencies (BGAs) serving insurance and advisors Web site: www.nailba.org History The first section of National Association of Independent Life Brokerage Agencies profile will explain the key historical events in the firm s development. Source: 6/22/01 RunMoney Quarterly Report; Tiburon Research & Analysis National Association of Independent Life Brokerage Agencies has evolved through three phases, including its early, middle, and recent phase. Early Phase This section includes National Association of Independent Life Brokerage Agencies early phase. Middle Phase This section includes National Association of Independent Life Brokerage Agencies middle phase. 343

Recent Phase This section includes National Association of Independent Life Brokerage Agencies recent phase. Businesses The second section of National Association of Independent Life Brokerage Agencies profile will outline its core businesses. National Association of Independent Life Brokerage Agencies has a number of businesses. Organization & Ownership The final section of National Association of Independent Life Brokerage Agencies profile will address its organizational structure of ownership. National Association of Independent Life Brokerage Agencies has a web site. National Association of Independent Life Brokerage Agencies is led by its CEO. National Association of Independent Life Brokerage Agencies is privately owned. National Association of Insurance Commissioners (NAIC) National Association of Insurance Commissioners is based in Kansas City, MO and is led by its CEO Catherine Weatherford and president Kathleen Sebelirs, who is also the Kansas insurance commissioner. The NAIC attempts to make state regulation less burdensome, and to develop uniform licensing requirements for agents across states, while maintaining a database of complaints against companies and agents. History The first section of National Association of Insurance Commissioners profile will explain the key historical events in the firm s development. National Association of Insurance Commissioners was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of National Association of Insurance Commissioners profile will outline its core businesses. National Association of Insurance Commissioners has various services. National Association of Insurance Commissioners has issued model legislation; the bid rigging insurance scandal is likely to result in more disclosure requirements for insurance agents and brokers. This would require insurance agents and brokers to tell customers how they are paid by insurers, including any contingent commissions. It would also require written consent from customers to collect contingent commission payments. Organization & Ownership The final section of National Association of Insurance Commissioners profile will address is organizational structure & ownership. 344

National Association of Insurance Commissioners has a web site. National Association of Insurance Commissioners is led by its president Kathleen Sebelirs. National Association of Insurance Commissioners is owned by its investors. National Association of Mutual Insurance Companies National Association of Mutual Insurance Companies represents P&C insurance companies and Continues to support state regulations. Association s management team include Vice President of Federal Affairs, Pamela Allen. National Association of Mutual Insurance Companies Comments Represents P&C insurance companies Vice President of Federal Affairs: Pamela Allen Continues to support state regulation Web site: www.namic.org History The first section of National Association of Mutual Insurance Companies profile will explain the key historical events in the firm s development. Source: 8/21/01 Insurance Letter; 7/23/01 Insurance Letter; 6/22/01 American Banker; 5/21/01 Insurance Letter; Tiburon Research & Analysis National Association of Mutual Insurance Companies has evolved through three phases, including its early, middle, & recent phases. Early Phase This section includes National Association of Mutual Insurance Companies early phase. Middle Phase This section includes National Association of Mutual Insurance Companies middle phase. Recent Phase This section includes National Association of Mutual Insurance Companies recent phase. Statistics The second section of National Association of Mutual Insurance Companies profile will review some key statistics regarding the firm. Businesses The third section of National Association of Mutual Insurance Companies profile will outline its core businesses. National Association of Mutual Insurance Companies has a number of businesses. 345

Organization & Ownership The final section of National Association of Mutual Insurance Companies profile will address its organizational structure of ownership. National Association of Mutual Insurance Companies has a web site. National Association of Mutual Insurance Companies is led by its CEO. National Association of Mutual Insurance Companies is privately owned. National Association of Professional Insurance Agents National Association of Professional Insurance Agents was founded in 1931 and is based in Alexandria, VA. The association represents independent agents in all 50 states, Puerto Rico and the District of Columbia. National Association of Professional Insurance Agents executive team includes Executive Vice President, Gary Eberhart. National Association of Professional Insurance Agents History The first section of National Analysis Association of Professional Insurance Agents profile will explain the key historical events in the firm s development. Comments Founded in 1931 Based in Alexandria, VA Represents independent agents in all 50 states, Puerto Rico and the District of Columbia EVP: Gary Eberhart Web site: www.pianet.com Source: 12/01/04 National Association of Professional Insurance Agents Web Site; 8/10/01 Insurance Letter; 5/28/01 Investment News; T iburon Research & National Association of Professional Insurance Agents has evolved through three phases, including its early, middle, & recent phases. Early Phase This section includes National Association of Professional Insurance Agents early phase. Middle Phase This section includes National Association of Professional Insurance Agents middle phase. Recent Phase This section includes National Association of Professional Insurance Agents recent phase. Statistics The second section of National Association of Professional Insurance Agents profile will review some key statistics regarding the firm. 346

Businesses The third section of National Association of Professional Insurance Agents profile will outline its core businesses. National Association of Professional Insurance Agents has a number of businesses. Organization & Ownership The final section of National Association of Professional Insurance Agents profile will address its organizational structure of ownership. National Association of Professional Insurance Agents has a web site. National Association of Professional Insurance Agents is led by its CEO. National Association of Professional Insurance Agents is privately owned. National Association of Registered Agents & Brokers National Association of Registered Agents & Brokers is a semi-autonomous agent licensing clearing house and would be created as stipulated by the Gramm-Leach-Bliley Act should fewer than 29 states establish a uniform or reciprocal licensing system; would be a federal option for the licensing of insurance agents and brokers. The NARAB provision has led to the creation of the state-based Producer Licensing Model Act (PLMA); developed in large part by NAIFA and adopted by the National Association of Insurance Commissioners in 2000, PLMA is an attempt to streamline agent licensing from state to state. History The first section of National Association of Registered Agents & Brokers profile will explain the key historical events in the firm s development. National Association of Registered Agents & Brokers has evolved through three phases, including its early, middle, & recent phases. Early Phase This section includes National Association of Registered Agents & Brokers early phase. Middle Phase This section includes National Association of Registered Agents & Brokers middle phase. Recent Phase National Association of Registered Agents & Brokers Source: 8/21/01 Insurance Letter; Tiburon Research & Analysis Comments Semi-autonomous agent licensing clearing house Would be created as stipulated by the Gramm-Leach- Bliley Act should fewer than 29 states establish a uniform or reciprocal licensing system Would be a federal option for the licensing of insurance agents and brokers The NARAB provision has led to the creation of the state-based Producer Licensing Model Act (PLMA) - Developed in large part by NAIFA and adopted by the National Association of Insurance Commissioners in 2000, PLMA is an attempt to streamline agent licensing from state to state 347

This section includes National Association of Registered Agents & Brokers recent phase. Statistics The second section of National Association of Registered Agents & Brokers profile will review some key statistics regarding the firm. Businesses The third section of National Association of Registered Agents & Brokers profile will outline its core businesses. National Association of Registered Agents & Brokers has a number of businesses. Organization & Ownership The final section of National Association of Registered Agents & Brokers profile will address its organizational structure of ownership. National Association of Registered Agents & Brokers has a web site. National Association of Registered Agents & Brokers is led by its CEO. National Association of Registered Agents & Brokers is privately owned. National Association of Variable Annuities (NAVA) National Association of Variable Annuities is based in Washington, DC and has 350 members. It is led by its CEO Mike Mackey. NAVA is a trade association for variable annuity providers and distributors. It launched a public awareness campaign call Retire on Your Terms, with the goal being to explain the benefits of variable annuities. Mutual funds have outpaced variable annuities partly due to the superior service they offer aided by computers. Daily pricing and frequently updated, easy to read account statement helped to make mutual funds a big hit with the investing public. The variable annuity business, with its more complex products and pricing, took longer to automate. The investment in technology, however, will be well worth it. Tax deferral is a powerful advantage, particularly with sales of limited partnerships waning and very little competition from other tax-deferred products. 65 companies sell more than 500 variable annuity products. The web site for this campaign is www.retireonyourterms.com. History The first section of National Association of Variable Annuities profile will explain the key historical events in the firm s development. National Association of Variable Annuities was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of National Association of Variable Annuities profile will outline its core businesses. National Association of Variable Annuities has various services. 348

Organization & Ownership The final section of National Association of Variable Annuities profile will address is organizational structure & ownership. National Association of Variable Annuities has a web site. National Association of Variable Annuities is led by its president Mike Mackey. National Association of Variable Annuities is owned by its investors. National Organization of Life & Health Insurance Guaranty Associations National Organization of Life & Health Insurance Guaranty Associations is based in Herndon, VA and is led by its chairman James Mumford and president Peter Gallanis. It assists members in resolving issues and problems related to the operation of state life and health insurance guaranty associations. The company web site is www.nolhga.com. History The first section of National Organization of Life & Health Insurance Guaranty Associations profile will explain the key historical events in the firm s development. National Organization of Life & Health Insurance Guaranty Associations was founded and has evolved through three phases, including its early, middle, & recent phases. Services The third section of Organization of Life & Health Insurance Guaranty Associations profile will outline its core services. National Organization of Life & Health Insurance Guaranty Associations has various services. Organization & Ownership The final section of Organization of Life & Health Insurance Guaranty Associations profile will address is organizational structure & ownership. National Organization of Life & Health Insurance Guaranty Associations has a web site. National Organization of Life & Health Insurance Guaranty Associations is led by its chairman James Mumford and president Peter Gallanis. National Organization of Life & Health Insurance Guaranty Associations is owned by its investors. Nebraska State Commissioner Nebraska State Commissioner is based in Lincoln, NE and is led by Tim Wagner. Its web site is www.nol.org/home/ndoi. History The first section of Nebraska State Commissioner s profile will explain the key historical events in the firm s development. 349

Nebraska State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Nebraska State Commissioner. This section will review the middle phase of the Nebraska State Commissioner. This section will evaluate the recent phases of the Nebraska State Commissioner. Businesses The third section of Nebraska State Commissioner s profile will outline its core businesses. Nebraska State Commissioner has various businesses. Organization & Ownership The final section of Nebraska State Commissioner s profile will address is organizational structure & ownership. Nebraska State Commissioner has a web site. Nebraska State Commissioner is led by Tim Wagner. Nebraska State Commissioner is owned by the state. Nevada State Commissioner Nevada State Commissioner is based in Carson City, NV and is led by Alice Molasky Arman. Its web site is www.doi.state.nv.us. History The first section of Nevada State Commissioner s profile will explain the key historical events in the firm s development. Nevada State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Nevada State Commissioner. This section will review the middle phase of the Nevada State Commissioner. This section will evaluate the recent phases of the Nevada State Commissioner. Businesses The third section of Nevada State Commissioner s profile will outline its core businesses. Nevada State Commissioner has various businesses. Organization & Ownership The final section of Nevada State Commissioner s profile will address is organizational structure & ownership. 350

Nevada State Commissioner has a web site. Nevada State Commissioner is led by Alice Molasky Arman. Nevada State Commissioner is owned by the state. New Hampshire State Commissioner New Hampshire State Commissioner is based in Concord, NH and is led by Roger Sevigny. Its web site is www.state.nh.us/insurance. History The first section of New Hampshire State Commissioner s profile will explain the key historical events in the firm s development. New Hampshire State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the New Hampshire State Commissioner. This section will review the middle phase of the New Hampshire State Commissioner. This section will evaluate the recent phases of the New Hampshire State Commissioner. Businesses The third section of New Hampshire State Commissioner s profile will outline its core businesses. New Hampshire State Commissioner has various businesses. Organization & Ownership The final section of New Hampshire State Commissioner s profile will address is organizational structure & ownership. New Hampshire State Commissioner has a web site. New Hampshire State Commissioner is led by Roger Sevigny. New Hampshire State Commissioner is owned by the state. New Jersey State Commissioner New Jersey State Commissioner is based in Trenton, NJ and is led by Holly Bakke. Its web site is www.state.nj.us/dobi. History The first section of New Jersey State Commissioner s profile will explain the key historical events in the firm s development. New Jersey State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the New Jersey State Commissioner. 351

This section will review the middle phase of the New Jersey State Commissioner. This section will evaluate the recent phases of the New Jersey State Commissioner. regarding the firm. Businesses The third section of New Jersey State Commissioner s profile will outline its core businesses. New Jersey State Commissioner has various businesses. Organization & Ownership The final section of New Jersey State Commissioner s profile will address is organizational structure & ownership. New Jersey State Commissioner has a web site. New Jersey State Commissioner is led by Holly Bakke. New Jersey State Commissioner is owned by the state. New Mexico State Commissioner New Mexico State Commissioner is based in Santa Fe, NM and is led by Eric Sema. Its web site is www.nmprc.state.nm.us/insurance/inshm.htm. History The first section of New Mexico State Commissioner s profile will explain the key historical events in the firm s development. New Mexico State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the New Mexico State Commissioner. This section will review the middle phase of the New Mexico State Commissioner. This section will evaluate the recent phases of the New Mexico State Commissioner. Businesses The third section of New Mexico State Commissioner s profile will outline its core businesses. New Mexico State Commissioner has various businesses. Organization & Ownership The final section of New Mexico State Commissioner s profile will address is organizational structure & ownership. New Mexico State Commissioner has a web site. 352

New Mexico State Commissioner is led by Eric Sema. New Mexico State Commissioner is owned by the state. New York State Commissioner New York State Commissioner is based in New York, NY and is led by Gregory Serio. Its web site is www.ins.state.ny.us. History The first section of New York State Commissioner s profile will explain the key historical events in the firm s development. New York State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the New York State Commissioner. This section will review the middle phase of the New York State Commissioner. This section will evaluate the recent phases of the New York State Commissioner. Businesses The third section of New York State Commissioner s profile will outline its core businesses. New York State Commissioner has various businesses. Organization & Ownership The final section of New York State Commissioner s profile will address is organizational structure & ownership. New York State Commissioner has a web site. New York State Commissioner is led by Gregory Serio. New York State Commissioner is owned by the state. North Carolina State Commissioner North Carolina State Commissioner is based in Raleigh, NC and is led by James Long. Its web site is www.ncdoi.com. History The first section of North Carolina State Commissioner s profile will explain the key historical events in the firm s development. North Carolina State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the North Carolina State Commissioner. 353

This section will review the middle phase of the North Carolina State Commissioner. This section will evaluate the recent phases of the North Carolina State Commissioner. Businesses The third section of North Carolina State Commissioner s profile will outline its core businesses. North Carolina State Commissioner has various businesses. Organization & Ownership The final section of North Carolina State Commissioner s profile will address is organizational structure & ownership. North Carolina State Commissioner has a web site. North Carolina State Commissioner is led by James Long. North Carolina State Commissioner is owned by the state. North Dakota State Commissioner North Dakota State Commissioner is based in Bismark, ND and is led by Jim Poolman. Its web site is www.state.nd.us/ndins. History The first section of North Dakota State Commissioner s profile will explain the key historical events in the firm s development. North Dakota State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the North Dakota State Commissioner. This section will review the middle phase of the North Dakota State Commissioner. This section will evaluate the recent phases of the North Dakota State Commissioner. Businesses The third section of North Dakota State Commissioner s profile will outline its core businesses. North Dakota State Commissioner has various businesses. Organization & Ownership The final section of North Dakota State Commissioner s profile will address is organizational structure & ownership. North Dakota State Commissioner has a web site. North Dakota State Commissioner is led by Jim Poolman. 354

North Dakota State Commissioner is owned by the state. Ohio State Commissioner Ohio State Commissioner is based in Columbus, OH and is led by Ann Womer Benjamin. Its web site is www.ohioinsurance.gov. History The first section of Ohio State Commissioner s profile will explain the key historical events in the firm s development. Ohio State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Ohio State Commissioner. This section will review the middle phase of the Ohio State Commissioner. This section will evaluate the recent phases of the Ohio State Commissioner. Businesses The third section of Ohio State Commissioner s profile will outline its core businesses. Ohio State Commissioner has various businesses. Organization & Ownership The final section of Ohio State Commissioner s profile will address is organizational structure & ownership. Ohio State Commissioner has a web site. Ohio State Commissioner is led by Ann Womer Benjamin. Ohio State Commissioner is owned by the state. Oklahoma State Commissioner Oklahoma State Commissioner is based in Oklahoma City, OK and is led by Carroll Fisher. Its web site is www.oid.state.ok.us. History The first section of Oklahoma State Commissioner s profile will explain the key historical events in the firm s development. Oklahoma State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Oklahoma State Commissioner This section will review the middle phase of the Oklahoma State Commissioner This section will evaluate the recent phases of the Oklahoma State Commissioner 355

Businesses The third section of Oklahoma State Commissioner s profile will outline its core businesses. Oklahoma State Commissioner has various businesses. Organization & Ownership The final section of Oklahoma State Commissioner s profile will address is organizational structure & ownership. Oklahoma State Commissioner has a web site. Oklahoma State Commissioner is led by Carroll Fisher. Oklahoma State Commissioner is owned by the state. Oregon State Commissioner Oregon State Commissioner is based in Salem, OR and is led by Joel Ario. Its web site is www.cbs.state.or.us/ins. History The first section of Oregon State Commissioner s profile will explain the key historical events in the firm s development. Oregon State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Oregon State Commissioner. This section will review the middle phase of the Oregon State Commissioner. This section will evaluate the recent phases of the Oregon State Commissioner. Businesses The third section of Oregon State Commissioner s profile will outline its core businesses. Oregon State Commissioner has various businesses. Organization & Ownership The final section of Oregon State Commissioner s profile will address is organizational structure & ownership. Oregon State Commissioner has a web site. Oregon State Commissioner is led by Joel Ario. Oregon State Commissioner is owned by the state. Pennsylvania State Commissioner Pennsylvania State Commissioner is based in Harrisburg, PA and is led by Diane Koken. Its web site is www.ins.state.pa.us. 356

History The first section of Pennsylvania State Commissioner s profile will explain the key historical events in the firm s development. Pennsylvania State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Pennsylvania State Commissioner. This section will review the middle phase of the Pennsylvania State Commissioner. This section will evaluate the recent phases of the Pennsylvania State Commissioner. Businesses The third section of Pennsylvania State Commissioner s profile will outline its core businesses. Pennsylvania State Commissioner has various businesses. Organization & Ownership The final section of Pennsylvania State Commissioner s profile will address is organizational structure & ownership. Pennsylvania State Commissioner has a web site. Pennsylvania State Commissioner is led by Diane Koken. Pennsylvania State Commissioner is owned by the state. Rhode Island State Commissioner Rhode Island State Commissioner is based in Providence, RI and is led by Marilyn Shannon McConaghy. Its web site is www.dbr.state.ri.us. History The first section of Rhode Island State Commissioner s profile will explain the key historical events in the firm s development. Rhode Island State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Rhode Island State Commissioner. This section will review the middle phase of the Rhode Island State Commissioner. This section will evaluate the recent phases of the Rhode Island State Commissioner. Businesses The third section of Rhode Island State Commissioner s profile will outline its core businesses. 357

Rhode Island State Commissioner has various businesses. Organization & Ownership The final section of Rhode Island State Commissioner s profile will address is organizational structure & ownership. Rhode Island State Commissioner has a web site. Rhode Island State Commissioner is led by Marilyn Shannon McConaghy. Rhode Island State Commissioner is owned by the state. Schiff s Insurance Observer Schiff s Insurance Observer is a publication for people interested in the property/casualty and life insurance industry. The editor is David Schiff, and the website can be found at www.insuranceobserver.com. Schiff s Insurance Observer Schiff s Comments Publication for people interested in the propertycasualty and life-insurance industry Editor: David Schiff Web site: www.insuranceobserver.com History The first section of Schiff s Insurance Observer s profile will explain the key historical events in the firm s development. Schiff s Insurance Observer was founded and has evolved through three phases, including its early, middle, & recent phases. Businesses The second section of Schiff s Insurance Observer s profile will outline its core businesses. Schiff s Insurance Observer has a number of businesses. Organization & Ownership The final section of Schiff s Insurance Observer s profile will address its organizational structure of ownership. Schiff s Insurance Observer has a web site. Source: 4/10/01 Wall Street Journal; 11/29/99 Business Week; Tiburon Research & Analysis Schiff s Insurance Observer is led by its editor, David Schiff. Schiff s Insurance Observer is own by David Schiff. Sheshunoff Information Services Sheshunoff Information Systems has been acquired by Alex esolutions. It is has been a publisher of how to literature for financial institution professionals for over 30 years. It 358

also tracks insurance industry statistics. Sheshunoff Information Systems can be found online at www.sheshunoff.com. History The first section of Sheshunoff Information Services profile will explain the key historical events in the firm s development. Sheshunoff Information Systems was founded and has evolved through three phases, including its early, middle, and recent phases. Businesses The second section of Sheshunoff Information Services profile will outline its core businesses. Sheshunoff Information Services has various businesses. Sheshunoff Information Services has a web site. Organization & Ownership The final section of Sheshunoff Information Services profile will address its organizational structure of ownership. Sheshunoff Information Services has a web site. Sheshunoff Information Services is led by its managing editor. Sheshunoff Information Services is owned by its investors. Society of Actuaries Society of Actuaries is Based in Schaumburg, IL and is led by its president Neil Parmenter. Society of Actuaries applies mathematical and economic probabilities to financial security programs. The company web site is www.soa.org. History The first section of Society of Actuaries profile will explain the key historical events in the firm s development. Society of Actuaries was founded and has evolved through three phases, including its early, middle, & recent phases. Businesses The third section of Society of Actuaries profile will outline its core businesses. Society of Actuaries has various businesses. Organization & Ownership The final section of Society of Actuaries profile will address is organizational structure & ownership. Society of Actuaries has a web site. 359

Society of Actuaries is led by its president Neil Parmenter. Society of Actuaries is owned by its investors. South Carolina State Commissioner South Carolina State Commissioner is based in Columbia, SC and is led by Ernst Csiszar. Its web site is www.doi.state.sc.us. History The first section of South Carolina State Commissioner s profile will explain the key historical events in the firm s development. South Carolina State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the South Carolina State Commissioner. This section will review the middle phase of the South Carolina State Commissioner. This section will evaluate the recent phases of the South Carolina State Commissioner. Businesses The third section of South Carolina State Commissioner s profile will outline its core businesses. South Carolina State Commissioner has various businesses. Organization & Ownership The final section of South Carolina State Commissioner s profile will address is organizational structure & ownership. South Carolina State Commissioner has a web site. South Carolina State Commissioner is led by Ernst Csiszar. South Carolina State Commissioner is owned by the state. South Dakota State Commissioner South Dakota State Commissioner is based in Pierre, SD and is led by Gary Steuck. Its web site is www.state.sd.us/drr2/reg/insurance. History The first section of South Dakota State Commissioner s profile will explain the key historical events in the firm s development. South Dakota State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the South Dakota State Commissioner. This section will review the middle phase of the South Dakota State Commissioner. 360

This section will evaluate the recent phases of the South Dakota State Commissioner. Businesses The third section of South Dakota State Commissioner s profile will outline its core businesses. South Dakota State Commissioner has various businesses. Organization & Ownership The final section of South Dakota State Commissioner s profile will address is organizational structure & ownership. South Dakota State Commissioner has a web site. South Dakota State Commissioner is led by Gary Steuck. South Dakota State Commissioner is owned by the state. SS Huebner Foundation for Insurance Education SS Huebner Foundation for Insurance Education is based in Philadelphia, PA and is led by its chairman Neil Doherty. The company makes fellowship grants for doctoral studies and publishes research studies on insurance. The company web site is www.huebnergeneva.org. SS Huebner Foundation for Insurance Education Comments Based in Philadelphia, PA Make fellowship grants for doctoral study and publish research studies on insurance Chairman: Neil Doherty Web Site: www.huebnergeneva.org History The first section of SS Huebner Foundation for Insurance Education s profile will explain the key historical events in the firm s development. Source: 12/05 SS Huebner Foundation for Insurance Education Web Site; Tiburon Research & Analysis SS Huebner Foundation for Insurance Education was founded and has evolved through three phases, including its early, middle, & recent phases Services The third section of SS Huebner Foundation for Insurance Education s profile will outline its core services. SS Huebner Foundation for Insurance Education has various services. Organization & Ownership The final section of SS Huebner Foundation for Insurance Education s profile will address is organizational structure & ownership. SS Huebner Foundation for Insurance Education has a web site. 361

SS Huebner Foundation for Insurance Education is led by its chairman Neil Doherty. SS Huebner Foundation for Insurance Education is owned by its investors. Tennessee State Commissioner Tennessee State Commissioner is based in Nashville, TN and is led by Paula Flowers. Its web site is www.state.tn.us/commerce. History The first section of Tennessee State Commissioner s profile will explain the key historical events in the firm s development. Tennessee State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Tennessee State Commissioner This section will review the middle phase of the Tennessee State Commissioner This section will evaluate the recent phases of the Tennessee State Commissioner Businesses The third section of Tennessee State Commissioner s profile will outline its core businesses. Tennessee State Commissioner has various businesses. Organization & Ownership The final section of Tennessee State Commissioner s profile will address is organizational structure & ownership. Tennessee State Commissioner has a web site. Tennessee State Commissioner is led by Paula Flowers. Tennessee State Commissioner is owned by the state. Texas State Commissioner Texas State Commissioner is based in Austin, TX and is led by Jose Montemayor. Its web site is www.tdi.state.tx.us. History The first section of Texas State Commissioner s profile will explain the key historical events in the firm s development. Texas State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Texas State Commissioner. 362

This section will review the middle phase of the Texas State Commissioner. This section will evaluate the recent phases of the Texas State Commissioner. Businesses The third section of Texas State Commissioner s profile will outline its core businesses. Texas State Commissioner has various businesses. Organization & Ownership The final section of Texas State Commissioner s profile will address is organizational structure & ownership. Texas State Commissioner has a web site. Texas State Commissioner is led by Jose Montemayor. Texas State Commissioner is owned by the state. Utah State Commissioner Utah State Commissioner is based in Salt Lake City, UT and is led by Merwin Stewart. Its web site is www.insurance.state.ut.us. History The first section of Utah State Commissioner s profile will explain the key historical events in the firm s development. Utah State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Utah State Commissioner. This section will review the middle phase of the Utah State Commissioner. This section will evaluate the recent phases of the Utah State Commissioner. Businesses The third section of Utah State Commissioner s profile will outline its core businesses. Utah State Commissioner has various businesses. Organization & Ownership The final section of Utah State Commissioner s profile will address is organizational structure & ownership. Utah State Commissioner has a web site. Utah State Commissioner is led by Merwin Stewart. Utah State Commissioner is owned by the state. 363

Vermont State Commissioner Vermont State Commissioner is based in Montpelier, VT and is led by John Crowley. Its web site is www.bishca.state.vt.us. History The first section of Vermont State Commissioner s profile will explain the key historical events in the firm s development. Vermont State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Vermont State Commissioner. This section will review the middle phase of the Vermont State Commissioner. This section will evaluate the recent phases of the Vermont State Commissioner. Businesses The third section of Vermont State Commissioner s profile will outline its core businesses. Vermont State Commissioner has various businesses. Organization & Ownership The final section of Vermont State Commissioner s profile will address is organizational structure & ownership. Vermont State Commissioner has a web site. Vermont State Commissioner is led by John Crowley. Vermont State Commissioner is owned by the state. Virginia State Commissioner Virginia State Commissioner is based in Richmond, VA and is led by Alfred Gross. Its web site is www.state.va.us/scc/division/boi. History The first section of Virginia State Commissioner s profile will explain the key historical events in the firm s development. Virginia State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Virginia State Commissioner. This section will review the middle phase of the Virginia State Commissioner. This section will evaluate the recent phases of the Virginia State Commissioner. 364

Businesses The third section of Virginia State Commissioner s profile will outline its core businesses. Virginia State Commissioner has various businesses. Organization & Ownership The final section of Virginia State Commissioner s profile will address is organizational structure & ownership. Virginia State Commissioner has a web site. Virginia State Commissioner is led by Alfred Gross. Virginia State Commissioner is owned by the state. Washington State Commissioner Washington State Commissioner is based in Olympia, WA and is led by Mike Kreidler. Its web site is www.insurance.wa.gov. History The first section of Washington State Commissioner s profile will explain the key historical events in the firm s development. Washington State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Washington State Commissioner. This section will review the middle phase of the Washington State Commissioner. This section will evaluate the recent phases of the Washington State Commissioner. Businesses The third section of Washington State Commissioner s profile will outline its core businesses. Washington State Commissioner has various businesses. Organization & Ownership The final section of Washington State Commissioner s profile will address is organizational structure & ownership. Washington State Commissioner has a web site. Washington State Commissioner is led by Mike Kreidler. Washington State Commissioner is owned by the state. Weiss Ratings Weiss Ratings is based in Florida and acts as a ratings agency. The company is led by its chairman, Martin Weiss. 365

History The first section of Weiss Ratings profile will explain the key historical events in the firm s development. Weiss Ratings has evolved through three phases, including its early, middle, & recent phases. Early Phase This section includes Weiss Ratings early phase. Middle Phase This section includes Weiss Ratings middle phase. Weiss Ratings Comments Based in Florida Ratings agency Chairman: Martin Weiss Recent Phase This section includes Weiss Ratings recent phase. Source: 6/22/01 Wall Street Journal; Tiburon Research & Analysis Statistics The second section of Weiss Ratings profile will review some key statistics regarding the firm. Businesses The third section of Weiss Ratings profile will outline its core businesses. Weiss Ratings has a number of businesses. Organization & Ownership The final section of Weiss Ratings profile will address its organizational structure of ownership. Weiss Ratings has a web site. Weiss Ratings is led by its chairman Martin Weiss. Weiss Ratings is owned by Martin Weiss. West Virginia State Commissioner West Virginia State Commissioner is based in Charleston, WV and is led by Jane Cline. Its web site is www.wvinsurance.gov. History The first section of West Virginia State Commissioner s profile will explain the key historical events in the firm s development. West Virginia State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. 366

This section will discuss the early phase of the West Virginia State Commissioner. This section will review the middle phase of the West Virginia State Commissioner. This section will evaluate the recent phases of the West Virginia State Commissioner. Businesses The third section of West Virginia State Commissioner s profile will outline its core businesses. West Virginia State Commissioner has various businesses. Organization & Ownership The final section of West Virginia State Commissioner s profile will address is organizational structure & ownership. West Virginia State Commissioner has a web site. West Virginia State Commissioner is led by Jane Cline. West Virginia State Commissioner is owned by the state. Wisconsin State Commissioner Wisconsin State Commissioner is based in Madison, WI and is led by Jorge Gomez. Its web site is www.oci.wi.gov. History The first section of Wisconsin State Commissioner s profile will explain the key historical events in the firm s development. Wisconsin State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Wisconsin State Commissioner. This section will review the middle phase of the Wisconsin State Commissioner. This section will evaluate the recent phases of the Wisconsin State Commissioner. Businesses The third section of Wisconsin State Commissioner s profile will outline its core businesses. Wisconsin State Commissioner has various businesses. Organization & Ownership The final section of Wisconsin State Commissioner s profile will address is organizational structure & ownership. Wisconsin State Commissioner has a web site. 367

Wisconsin State Commissioner is led by Jorge Gomez. Wisconsin State Commissioner is owned by the state. Wyoming State Commissioner Wyoming State Commissioner is based in Cheyenne, WY and is led by Ken Vines. Its web site is insurance.state.wy.us. History The first section of Wyoming State Commissioner s profile will explain the key historical events in the firm s development. Wyoming State Commissioner was founded and has evolved through three phases, including its early, middle, and recent phases. This section will discuss the early phase of the Wyoming State Commissioner. This section will review the middle phase of the Wyoming State Commissioner. This section will evaluate the recent phases of the Wyoming State Commissioner. Businesses The third section of Wyoming State Commissioner s profile will outline its core businesses. Wyoming State Commissioner has various businesses. Organization & Ownership The final section of Wyoming State Commissioner s profile will address is organizational structure & ownership. Wyoming State Commissioner has a web site. Wyoming State Commissioner is led by Ken Vines. Wyoming State Commissioner is owned by the state. 368

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