2-14-10 Version

INTRODUCING

THE M FINANCIAL GROUP

“The Power of M”

Leading the Way in the Ultra-Affluent and Corporate Markets Since 1978

CONFIDENTIALITY

This report contains proprietary material provided by Advisors Trust Planning and Investment Company, Inc. We ask you to respect our interests and to maintain its confidentiality. Please direct any questions regarding this report or its return to our office at 866.434.7500 (toll free).

LEGAL, ACCOUNTING AND INFORMATION

This report is intended to support discussions between clients and their professional advisors. The information is provided as a example only - using hypothetical investment and insurance company products and assumptions The facts, projections and assumptions do not apply to all circumstances. The estimated quantitative tax information should not be relied upon for making investment

decisions. We do not engage in the practice of law or accounting. Accordingly, the information presented is not offered as legal or tax advice. Tax laws are complex and change frequently. Your personal advisors should be contacted if you have any questions regarding the application of such information for your particular circumstances.

INVESTMENTS

All references to current or projected investment results are hypothetical and are neither guarantees nor estimates of future results. Actual values may be higher or lower. If applicable, prospective clients must carefully review of our Form ADV Part II and product Prospectus’.

INSURANCE

References to insurance may include dividends, current interest crediting rates, or variable investment returns - each of which are illustrative and are neither guarantees nor estimates of future results. See footnotes on company provided illustrations for details and further explanation prior to the purchase of insurance. A new insurance policy is contestable for two years from the date of issue. This means the insurer may deny a claim because of a material misrepresentation by the insured or owner. A claim may also be denied due to the suicide of the insured during the first two policy years.

****************************************************************************************************************** Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker Dealer and Investment Advisor, Member FINRA/SIPC.

Advisors Trust is independently owned and operated.

2-14-10 Version

The M Financial Group is one of the nation’s premier financial services

design and distribution companies, serving ultra-affluent individuals and

Fortune 1000 companies through a network of more than 125 independent Firms.

Advisors Trust

- M Financial Group member firm -

TODAY’S SAMPLE DISCUSSION:

THE “SUPER ROTH” DEFERRED COMPENSATION STRATEGY

2-14-10 Version: This is a strategy we refer to as “The Super-Roth” Deferred Compensation Strategy. It is NOT a Roth IRA.

THE DEFERRED COMPENSATION STRATEGY

• Designing a strategy to help create the most spendable retirement income with the least risks.

• Potential risks affecting asset accumulation:– Taxes– Volatility– Litigation

TAX RISK

• To maximize future spendable income, taxes may be your biggest challenge.

• Smart tax planning may have a more likely impact on future spendable income than chasing higher investment returns.

• Uncle Sam will always be our partner. Unless we plan properly, he may take an increasing share of future income.

HISTORY OF INCOME TAX RATES

Source: Congressional Joint Committee on Taxation

1913 1918 1929 1941 1952 1963 1982 1988 1993 2006 2010 beyond

100

80

60

40

20

0

??

INCOME DIVERSIFICATION

• While no one can predict future tax rates, any tax increase would leave less spendable income.

• Creating future tax free income helps hedge against higher tax rates.

• Diversification should include different asset classes and provide both taxable and non-taxable retirement income.

RETIREMENT FUNDING STRATEGIES

Personal Investments.

Employer sponsored “Qualified Pension, Profit Sharing and 401(k) Plans”.

Employer sponsored “Non-Qualified” Deferred Compensation.

RETIREMENT ACCUMULATION STRATEGIES

“Qualified”Before Tax

Contributions

“Personal”After-Tax

Contributions

Taxable Accumulation

Non-Taxable Accumulation

Pay Ordinary Income Tax

Yes! May help Provide

Litigation Protection

IRA

401(k) Plan

Profit Sharing

Defined Benefit

Cash Balance

“Qualified”Non-Taxable

Accumulation

Pay Capital Gains & Ordinary Income Tax

NoLitigation Protection

Stocks

Bonds

Commodities

Annuities

Home Runs

Receive Tax-Free Income

Yes! May Help ProvideLitigation Protection

Non-Qualified

Deferred

Compensation

(think of it like a

“Super Roth”)

“Non-Qualified”After-Tax

Contributions

YOU DECIDE ALLOCATION AMONG STRATEGIES

"Personal""Pension"020406080100

• How much spendable income could each strategy produce?• What is the proper mix to hedge against future tax increases

and potential litigation?• What are the associated investment risks?

"Personal""Pension"020406080100

“SuperRoth”

“SuperRoth”

“PENSION” ACCUMULATION STRATEGY

• Before-tax contribution is generally the most appealing characteristic.

• Plans may be “Defined Contribution” or “Defined Benefit”.

• All require plan documents and administration and some require actuarial services.

• Most plans cannot discriminate.

• Penalty for distributions before age 59 ½.

• Distributions must begin by age 70 ½.

“PENSION AND PROFIT SHARING” PLAN DESIGN

Review existing plan(s).

Clarify purpose and restate objectives.

Identify cost-saving designs and administrative alternatives*.

Integrate with added employer sponsored plans.

* Specific details available for further discussion.

Q: What is the cost of Employees and Fees?

WHAT IS THE “SUPER ROTH”?

• It is not a Roth IRA, but has some of the best characteristics of a Roth - Tax free growth and Tax free withdrawals.

• It is a company sponsored plan with contributions made by the company on your behalf.

• Funding vehicle is accumulation-designed life insurance*.

• High contribution limits (e.g. $100K – 200K per year are a function of group demographics and insurance contract funding limits).

• Contributions can be limited to physicians and highly-compensated employees

• Generally less complex and burdensome annual administration.

*We think of this type of Non-Qualified Deferred Compensation as a “Super Roth” type plan.

BENEFITS OF “SUPER ROTH” PLAN

• Collective underwriting enhances flexibility. Provides most advantageous insurance underwriting classifications for all participants.

• Discounted policy charges and no surrender charges based on total plan participation (economies of scale):– Less than $250,000– $250,000 to $500,000– $500,000 to $1,000,000– Over $1,000,000

• Tax Reimbursement Loan – participants borrow funds from the insurance company to cover tax - creating potential benefit of “float and arbitrage”.

“SUPER ROTH” SUMMARY

Company sponsored plan provides lower policy costs. Entire Company Contribution available for growth. Opportunity for valuable Litigation Protection. Portability. Flexible funding options (normally 7 year schedule). Little or no administration fees. Available liquidity (e.g. college education funding). No minimum or maximum age requirements for withdrawals. Self-completion option – Disability Completion Benefit. Online Access to Account Information. Account Values based on Equity Indexing Strategy. More control over tax obligations – hedge against future rates.

HYPOTHETICAL SUMMARY – FOR ILLUSTRATION ONLY

ALLOCATED COMPENSATION

AVAILABLETO GROW

VALUE IN20 YEARS

GROSS ANNUALPAYMENTS

AFTER-TAXNET PAYMENTS

FOR FAMILY AT DEATH

TOTAL FORYOU AND FAMILY

“PENSION”$700,000

“SUPER-ROTH”$700,000

“PERSONAL”$700,000

$420,000

$1,060,000

$112,000

$99,000

None

$1.48 Million

$1,485,000TOTAL

NET PAYMENTS

$974,000TOTAL TO TAXESAND EMPLOYEES

$560,000

$2,080,000

$219,000

$132,000

None

$1.98 Million

$1,980,000

$1,455,000

$700,000

$1,233,000

$144,000

$144,000

$1,838,000

$4 Million

$2,160,000

$280,000

OUR ROLE

• Integrate the various strategies.

• Help you diversify accumulations through employer sponsored plans.

• Provide efficient solutions to enhance net benefits.

• Help you maximize spendable retirement distributions.