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Tim

Closing Plans and the Loring Ward 401(k) Experience

Tim Wochok, CFP® — Retirement Plan Consultant

For Advisor Use Only — Not For DistributionLWI Financial Inc. ("Loring Ward") is considered to be an investment manager under Section 3(38) of the Employee Retirement Income Security Act of 1974 (ERISA) only for those portfolios and funds approved and administered by Loring Ward. Plan advisors and trustees may have other fiduciary obligations independent of those which are assumed by an ERISA Sec. 3(38) investment manager. This presentation is intended as a general discussion on the subject matter and is not intended to be a complete discussion of ERISA or fiduciary duties under ERISA. Do not rely on this section for legal advice. Each ERISA fiduciary issue has its own unique set of facts and circumstances demanding specific attention. Seek the advice of competent ERISA legal counsel on any questions concerning ERISA duties. LWI Financial Inc. (“Loring Ward”) is an investment adviser registered with the Securities and Exchange Commission. Securities transactions are offered through its affiliate, Loring ward Securities Inc., member FINRA/SIPC. IRN R 13-328 (Exp 9/15)

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Keys to a more successful sales cycle:

1. Understand and Articulate Roles & Responsibilities of each service provider

2. Sell your value as an advisor/consultant and not a product

3. Setting a decision making timeline

4. Embrace a repeatable and scalable process

5. Leverage your strategic partners and resources

6. Summary

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ARTICULATING ROLES & RESPONSIBILITIES

Preferred RK/TPA Partners:• Sunwest Pensions• Verisight• Professional Capital Services (PCS)

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Behavioral

• Satisfy Needs

• Normal Investor

• Loss Aversion (failure to meet goal)

• Psychological

Quantitative

• Optimize Portfolio

• Rational Model

• Volatility (standard deviation)

• Mathematical

Harry Markowitz, PhD

Modern Portfolio Theory — 1952

1990 Nobel Prize in Economics

Meir Statman, PhD

Behavioral Portfolio Theory — 2000

Santa Clara University

Complementary Portfolio Construction Perspectives

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Average Investor vs. Major Indices 1992 – 2012

Average stock investor and average bond investor performances were used from a DALBAR study, Quantitative Analysis of Investor Behavior (QAIB), 03/2013. QAIB calculates investor returns as the change in assets after excluding sales, redemptions, and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs. After calculating investor returns in dollar terms (above), two percentages are calculated: Total investor return rate for the period and annualized investor return rate. Total return rate is determined by calculating the investor return dollars as a percentage of the net of the sales, redemptions, and exchanges for the period. The fact that buy-and-hold has been a successful strategy in the past does not guarantee that it will continue to be successful in the future. S&P 500 and Fixed Income index returns do not include expenses and fees

Equities Behavior Gap = 3.96% Fixed Income Behavior Gap = 5.36%

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Simple, Prudent Choices for Participants

• Plan Level Investment Policy Statement• Participant Risk Tolerance Questionnaire• SmartPlan interactive video enrollment available

International markets involve additional risks, including, but not limited to, currency fluctuation, political instability, foreign taxes, and different methods of accounting and financial reporting. As a result, they may not be suitable investment options for everyone. Diversification neither assures a profit nor guarantees against loss in a declining market.

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The Benefits of an ERISA 3(38) Fiduciary

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The Process

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?Needs Assessment Solution presentation

Commitment

Set up, Asset Transition, Enrollment

Service, Education, Advice

1. Discovery 2. Proposal

3. Contracts

4.

Implementation

5. MaintenanceWHAT IS THE PROCESS

(ADVISOR PERSPECTIVE)

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DISCOVERYAdvisor Goal: To connect, assess the opportunity and needs, provide insights and educate on industry benchmarks.

Loring Ward Resources:• Sample Discovery Questions• Helping You Manage Your Retirement Plan• Fiduciary Benchmark’s Plan Profile Report

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PROPOSALAdvisor Goal: To present a plan that meets the goals outlined in Discovery, confirm commitment of specific advisory services/service model and to discuss next steps to a final decision and implementation.

Loring Ward Resources:• Retirement Plan Proposal• Marketing Brochures, Whitepapers• Plan Level GAP Analysis• Comprehensive Plan Benchmarking (additional charge based on plan size)

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PORTFOLIO GAP ANALYSIS TOOL

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CONTRACT EXECUTIONAdvisor Goal: To obtain signatures on all contracts, outline next steps, collect recordkeeper payment for implementation (as applicable) and gather existing plan information required for the transition.

Loring Ward Resources:• Loring Ward Investment Management Agreement• Investment Policy Statement• Paperwork preparation and coordination with Recordkeeper / TPA

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IMPLEMENTATIONAdvisor Goal: To work with the employer to ensure a smooth transition, including clear communication on the process, that the employer’s responsibilities are executed and they get the support and guidance they need. Conduct an enrollment/engagement meeting for the employees aiming for high participation and high deferral rates.

Loring Ward Resources:• Collaboration with Recorkeeper’s conversion team• Participant presentations and brochures• Loring Ward multimedia/videos • SmartPlan video technology

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MAINTENANCEAdvisor Goal: To fulfill expectations by meeting with the employer on a scheduled basis to advise on the plan and monitor the performance, goals and services.

Loring Ward Resources:• Service Schedule• Portfolio Perspectives, Asset Class iQ• Quarter-in-Review• Investment and Behavioral Finance Materials

MAINTENANCE

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In Closing…

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The Benefits

• A prudent investment philosophy

• Vetted service providers

• Negotiated pricing

• Platform flexibility

• Fiduciary coverage

• Potential Growth

• Meaningful business to embrace

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Summary

Process creates structure.

Structure allows you to focus on efficient growth.

Committing to a proven process creates more time with your existing

and prospective clients.

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