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ADVANCING THE FUTURE OF PROFESSIONALLY MANAGED INVESTING

Connect | Know | Grow

2013–2014

MMI Industry Guide TO MANAGED INVESTMENT SOLUTIONS—TRENDS AND STATISTICS

–20142013

–2014

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M O N E Y M A N A G E M E N T I N S T I T U T EADVANCING THE FUTURE OF PROFESSIONALLY MANAGED INVESTING

2013–2014

MMI IndustryGuide to Managedinvestment solutions—Trends and Statistics

CONNECT

KNOW

GROW

Money Management Institute (MMI) Since 1997, MMI hasbeen the leading voice for the global financial services organiza-tions that provide advice and professionally-managed solutionsto individual and institutional investors. Through industry advo-cacy, educational initiatives, regulatory affairs, data reporting and professional networking, MMI supports and advances thegrowth of advisory solutions. MMI members’ advice-driven investment solutions serve an evolving worldwide financial land-scape and their organizations are committed to the highest stan-dards of fiduciary responsibility and ethical conduct. For moreinformation, visit www.mminst.org.

Dover Financial Research, LLC (Dover) is a boutique research and consulting firm specializing in the financial servicesindustry. The analysis, independent research and market intelli-gence that forms the foundation for this publication is suppliedby Dover. For more information about the firm, please visitwww.doverfr.com or call 781.461.0922.

© 2013 Money Management Institute – All Rights Reserved. No part of this publi-cation may be reproduced or transmitted in any form or by any means, electronic ormechanical, including photography, recording or any information storage or data retrieval system, without written permission from Money Management Institute. MMIwill regularly grant this permission to members upon request.

through EVENTS and NETWORKING

through DATA and EDUCATION

through ADVOCACY and STANDARDS

table of contents

INDEX OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

LETTER FROM THE CHAIRMAN AND PRESIDENT . . . . . . . . . . . . . . . 9

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

MISSION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

index of exhibits

2013–2014 MMI Industry Guide to Managed Investment Solutions4

section 1 – Advisory Industry Trends . . . . . . . . . . . . . . . . . . . . . . . 15

Exhibit 1.1 Data Collection History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Exhibit 1.2 Historical MS Asset Growth by Market Segment ($ billions) . . . . . . . . . . 16

Exhibit 1.3 Quarterly MS Assets by Market Segment ($ billions) . . . . . . . . . . . . . . . . 17

Exhibit 1.4 Quarterly MS Asset Growth Rates by Market Segment . . . . . . . . . . . . . . 18

Exhibit 1.5 MS Industry Historical Net Inflows by Market Segment ($ billions) . . . . . 19

Exhibit 1.6 Annual SMA Trends by Component ($ billions) . . . . . . . . . . . . . . . . . . . . 20

Exhibit 1.7 Annual SMA Asset Trends by Component – Percentage of Total SMA Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Exhibit 1.8 Multi-Discipline Portfolio Assets ($ billions) . . . . . . . . . . . . . . . . . . . . . . . 21

Exhibit 1.9 Unified Managed Account Assets ($ billions) . . . . . . . . . . . . . . . . . . . . . . 21

Exhibit 1.10 MS Assets by Program Type: Wirehouse vs. Non-Wirehouse ($ billions) . . . . . . . . . . . . . . . . . . . . . . . . 22

Exhibit 1.11 MS Assets by Market Segment: Wirehouse vs. Non-Wirehouse ($ billions) . . . . . . . . . . . . . . . . . . . . . . . . 23

Exhibit 1.12 MS Accounts and Assets by Market Segment . . . . . . . . . . . . . . . . . . . . . 24

Exhibit 1.13 MS Accounts and Assets by Discretion Type . . . . . . . . . . . . . . . . . . . . . . 25

Exhibit 1.14 MS Asset Share by Discretion Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Exhibit 1.15 MS Account Market Share by Discretion Type . . . . . . . . . . . . . . . . . . . . . 26

section 2 – Sponsor Firm Rankings . . . . . . . . . . . . . . . . . . . . . . . . 27

Exhibit 2.1 Managed Solutions Asset Trends: Top 10 Firms ($ billions) . . . . . . . . . . . 27

Exhibit 2.2 SMA Advisory Segment: Top 10 Firms ($ billions) . . . . . . . . . . . . . . . . . . 28

Exhibit 2.3 Mutual Fund Advisory Segment: Top 10 Firms ($ billions) . . . . . . . . . . . . 28

Exhibit 2.4 Rep as Portfolio Manager Segment: Top 10 Firms ($ billions) . . . . . . . . . . 29

Exhibit 2.5 Rep as Advisor Segment: Top 10 Firms ($ billions) . . . . . . . . . . . . . . . . . 29

Exhibit 2.6 Unified Managed Account Program Segment: Top 10 Firms ($ billions) . . 30

Exhibit 2.7 Third-Party Service Provider Assets by Component Type ($ billions), 1Q 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . 31

section 3 – SMA Manager Statistics . . . . . . . . . . . . . . . . . . . . . . . . . 33

Exhibit 3.1 SMA Assets by Asset Classification ($ billions) . . . . . . . . . . . . . . . . . . . . 33

Exhibit 3.2 Historical Trends – SMA Market Share by Asset Classification . . . . . . . . . 33

Exhibit 3.3 Top 25 Investment Managers Ranked by Total SMA AUM ($ billions) . . . 34

Exhibit 3.4 Top 25 Investment Managers Ranked by Traditional SMA AUM ($ billions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Exhibit 3.5 SMA Assets by Discipline ($ millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Exhibit 3.6 SMA Market Share Based on AUM by Discipline . . . . . . . . . . . . . . . . . . . 37

Exhibit 3.7 Top Managers by Discipline – Ranked by SMA AUM ($ millions) . . . . . . . 38

Exhibit 3.8 Number of SMA Accounts Using Management Reporting . . . . . . . . . . . 51

Exhibit 3.9 Top 25 Investment Managers Ranked by Total Model Portfolio AUM ($ millions) . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Exhibit 3.10 Model Portfolio Assets by Discipline ($ millions) . . . . . . . . . . . . . . . . . . . 53


section 4 – Mutual Fund and Exchange-Traded Fund Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Exhibit 4.1 U.S. Mutual Fund Industry Statistics ($ billions) . . . . . . . . . . . . . . . . . . . . 55

Exhibit 4.2 Long-Term Mutual Fund AUM Growth Statistics ($ billions) . . . . . . . . . . 56

Exhibit 4.3 Long-Term Mutual Fund AUM Growth Rates . . . . . . . . . . . . . . . . . . . . . 56

Exhibit 4.4 Net Cash Flows for Mutual Funds ($ millions) . . . . . . . . . . . . . . . . . . . . . 57

Exhibit 4.5 Annual Redemption Rate from Stock Mutual Funds . . . . . . . . . . . . . . . . 57

Exhibit 4.6 Exchange-Traded Fund Assets and Number of Funds ($ billions) . . . . . . . 58

Exhibit 4.7 Number of Funds in the U.S. Mutual Fund Industry (Year-end) . . . . . . . . 58

Exhibit 4.8 Net New Cash Flow of Long-Term Mutual Funds ($ millions) . . . . . . . . . 59

Exhibit 4.9 Net New Cash Flow of Long-Term Funds ($ millions) . . . . . . . . . . . . . . . 60

Exhibit 4.10 Net New Cash Flow of Long-Term Mutual Funds by Investment Classification ($ millions) . . . . . . . . . . . . . . . . . . . . . . . . . 61

section 5 – Hot Topic: A Look at the Private Family Market for External Chief Investment Officer Services . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Exhibit 5.1 External CIO Market at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Exhibit 5.2 Some Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Exhibit 5.3 External CIO Roles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Exhibit 5.4 Investment Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Exhibit 5.5 Top Challenges for External CIO Providers . . . . . . . . . . . . . . . . . . . . . . . . 67

Exhibit 5.6 Services Your Firm Offers and Percent of Clients that Use Them . . . . . . . 67

Exhibit 5.7 Satisfaction with Reporting Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Exhibit 5.8 What’s Missing from Your Reporting Package? . . . . . . . . . . . . . . . . . . . . 69

Exhibit 5.9 High-End Client Reporting Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Exhibit 5.10 Recently Improved Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Exhibit 5.11 Who Are Your Top Three Competitors? . . . . . . . . . . . . . . . . . . . . . . . . . . 70

index of exhibits continued


Exhibit 5.12 Average Fee on First $50 Million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Exhibit 5.13 Importance of Reporting to Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Exhibit 5.14 Change in Client View toward Reporting . . . . . . . . . . . . . . . . . . . . . . . . . 71

section 6 – Managed Investment Solutions Industry Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Exhibit 6.1 Managed Solutions Market Segments Representing the Greatest Growth Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Exhibit 6.2 Managed Solutions Market Segments Representing the Least Growth Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Exhibit 6.3 Advisory Market Key Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Exhibit 6.4 Growth Drivers and Forecasted Growth Rates . . . . . . . . . . . . . . . . . . . . . 78

Exhibit 6.5 Forecasted Average Annual Growth Rates (Assets) . . . . . . . . . . . . . . . . . 80

Exhibit 6.6 Consolidated Forecast Provided by Sponsor Firms ($ billions), 2013 to 2014 . . . . . . . . . . . . . . . . . . . . . . . . . 80

Exhibit 6.7 SMA Advisory Asset Forecast ($ billions), 2013 to 2014 . . . . . . . . . . . . . 81

Exhibit 6.8 Mutual Fund Advisory Asset Forecast ($ billions), 2013 to 2014 . . . . . . . 81

Exhibit 6.9 Rep as Portfolio Manager Asset Forecast ($ billions), 2013 to 2014 . . . . . 82

Exhibit 6.10 Rep as Advisor Asset Forecast ($ billions), 2013 to 2014 . . . . . . . . . . . . . 82

Exhibit 6.11 UMA Program Asset Forecast ($ billions), 2013 to 2014 . . . . . . . . . . . . . 83

Exhibit 6.12 Total MS Asset Forecast ($ billions), 2013 to 2014 . . . . . . . . . . . . . . . . . . 83

Exhibit 6.13 Market Share Shifts in AUM from 2007 to 2014 . . . . . . . . . . . . . . . . . . 84

Exhibit 6.14 Advisory Program Assets Broken Down by Product Type, 2Q 2013 . . . . . 85

GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86

MMI BOARD OF GOVERNORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88


letter from thechairmanand president

To MMI Members:

We are pleased to present the 2013–2014 edition of the MMI Industry Guide to

Managed Investment Solutions. Now in its fifth edition, the Guide continues to evolve

along with our industry. In addition to proprietary information on the managed

solutions business and on its most significant segments and leading players, this

edition provides MMI members with a detailed look at historical and projected

industry trends.

Building on the success of previous years, the Guide includes forecasts of advisory

solutions industry growth and top trends based on our survey of sponsor firms.

It also carries on our tradition of sharing analysis and commentary from leading

experts in the managed solutions space—this time in the form of statistics and

observations from The Family Wealth Alliance regarding the growing use of the

external chief investment officer model by single-family offices and the multifamily

offices that serve them.

The Guide continues to represent the most comprehensive source of data and

information on the managed solutions industry and is an indispensable tool for

resource planning, product development and strategic business discussions.

Please note, the charts and data series included in the Guide are available for

download in the members’ area of the MMI website (www.mminst.org) for use in

preparing analyses and presentations. We hope you find the Guide and our online

data repository to be valuable references and use them to manage and grow your

advisory solutions business.

As always, we encourage your comments and greatly appreciate the leadership of

MMI’s Board of Governors and our Industry Data Committee in the development of

the Guide.

John Moninger Joseph Schultz Christopher Davis

Chairman of the Chairman-Elect PresidentBoard of Governors


Introduction

This fifth edition of the MMI Industry Guide focuses on providing member firms

with quantitative information about the managed investment solutions marketplace.

The primary purpose of the publication is to facilitate member firm business plan-

ning and analysis efforts. As noted in the opening letter, the data included in this

issue will be accessible via the MMI website. All exhibits and underlying data can be

downloaded by member firms to conduct their own analysis, enabling members to use

the data in ways that facilitate their unique planning and information requirements.

The Guide provides historical data that depicts the trends occurring across the

advisory industry. Sales and asset trends are organized by sponsor firm, platform

type, investment manager and channel. MMI’s annual industry forecast, which is

derived based on input from sponsor firms, is also included.

Each year, MMI includes unique analysis and insight on special topics. This year,

the Guide identifies the top trends occurring within each MS market segment and

their impact on asset growth. This information was obtained via a proprietary MMI

survey sent to sponsor firms. Member firms also have requested information on the

trend toward outsourcing chief investment officer services. Section 5 of this issue

examines this trend with data and analysis provided by The Family Wealth Alliance.

MMI’s Industry Guide is intended for multiple audiences, including investment

managers and financial advice providers helping investors to achieve their financial

goals through a wide array of professionally managed investments. Thus, the

research included in the Guide moves well beyond traditional separately managed

accounts to other advisory market segments such as mutual fund advisory, rep as

portfolio manager and, of course, unified managed accounts and households.

Through our relationship with Dover Financial Research, MMI has created and

maintains a proprietary industry database. Much of the data and analysis included

in the Guide is sourced from MMI’s extensive database. Unlike industry data

provided by other research firms, MMI’s members own and self-validate our data.

In addition, member firms advise on the direction of research and analysis that MMI

provides. As a result, MMI is the leading source of data and information on the

managed solutions industry.


mission statement

Since 1997, MMI has been the leading voice for the global financial services

organizations that provide advice and professionally managed solutions to individ-

ual and institutional investors. Through industry advocacy, educational initiatives,

regulatory affairs, data reporting and professional networking, MMI supports

and advances the growth of managed investments. MMI members’ advice-driven

investment solutions serve an evolving worldwide financial landscape and their

organizations are committed to the highest standards of fiduciary responsibility and

ethical conduct.



methodology

The 2013–2014 MMI Industry Guide to Managed Investment Solutions repre-

sents a quantitative version of the more comprehensive MMI Guide and is the result

of ongoing research and analysis conducted by Dover Financial Research, LLC on

behalf of the Money Management Institute (MMI). Since 1997, MMI has been

providing research on the separately managed accounts industry, and more recently

on managed solutions, for its members. This year’s publication continues the trend

of providing data and analysis that moves well beyond SMA into other segments of

the advisory industry, helping to reinforce MMI’s position as the leading source for

managed solutions data.

The data and analytics in this Guide were derived from multiple sources.

However, most of the research is provided by MMI proprietary data and survey

initiatives.

All of the research sources used in this edition are identified below:

• MMI’s proprietary database.MMI maintains a proprietary database on the MS

industry, which is updated and enhanced quarterly. The quarterly data is

provided by a wide cross section of industry participants, including broker/

dealers, investment managers and service providers. Industry assets captured

within the database represent more than 90 percent of the MS industry. The

proprietary database is heavily leveraged throughout MMI publications.

• Proprietary annual industry surveys. In addition to the data collected on a

quarterly basis, Dover also conducts an annual forecast survey that targets

sponsor firms. Each year sponsor firms are asked to provide growth rates for

the managed solutions industry by market segment. The results of this survey

are included in this issue. See Section 6.

• Third-party research. Where applicable, MMI leverages third-party research

to augment proprietary efforts. This edition includes data that has been

provided by the Investment Company Institute. Data and information from

public company reports and other publicly available data sources or research

publications may also be used.

• The Family Wealth Alliance. Customized research on the external CIO market

is included in this year’s Guide. This analysis was provided by The Family

Wealth Alliance. A special thanks to The Alliance for contributing this highly

sought-after data and analysis.

All of MMI’s research reports have been produced by analysts with a minimum

of 10 years of industry experience. Their backgrounds, combined with the ongoing

monitoring of industry trends, result in a timely and insightful quantitative market

overview.


trendsandstatistics

Advisory Industry Trends

section 1


EXHIBIT 1.1 Data Collection HistorySources: Money Management Institute, Dover Financial Research

Year

1997

1998–2003

2004–2005

2006

2007

3Q 2007

4Q 2007

2008

2010

Milestones

MMI focuses on SMA industry. Surveys wirehouse firms andbegins capturing SMA industry data.

MMI continues to focus on collecting industry data. Teams with Financial Research Corporation (FRC) to help with data collection efforts.

Dover Financial Research engaged by MMI to collect and enhance data from sponsor firms on the SMA industry. First MMI quarterly publication launched August 2005.

Board of directors agree to include dual contracts withinMMI's purview. MMI Central launched in Spring 2006 tocover MS industry.

MMI transitions from separately managed accounts to managed investment solutions (MS)—including SMA advisory, mutual fund advisory, and rep as portfolio manager market segments.

UMAs identified as a separate market segment.

Fee-in-lieu programs extinguished—MMI includes rep as advisor as an MS market segment.

Dover restates SMA industry assets from 2003 to 3Q 2008.

Dover enhances sponsor survey with additional data points to reflect sponsor product evolution.

Data Collection Change

First effort to report industry-wide SMA data.

FRC helps to enhance reporting. SMA data reported by sponsor firms and investment managers.

MMI/Dover focus on enhancing sponsor firm data collection. Many moresponsor firms enlisted to report.

Dual contract data added 3Q 2006.About $80 billion added to SMA segment.

Scope of data collection broadens to include all advisory programs.

UMA assets broken out from SMA segment 3Q 2007.

Rep as advisor assets added to MS 4Q 2007.

Five-year SMA assets (2003 to 2008) restated to ensure consistency of reporting.

Non-sponsored and ancillary advisoryasset categories added to provide moreinsightful reporting for third-party service providers. Fidelity and Schwabalso have non-sponsored assets, whichwere reflected in 2011.


EXHIBIT 1.2 Historical MS Asset Growth by Market Segment ($ billions)Sources: Money Management Institute, Dover Financial Research

Period SMA Mutual Rep as UMA ETF Rep as Total MSAdvisory Fund Portfolio Program Advisory/ Advisor

Advisory Manager Other

2006 $715 $361 $169 $31 $7 - $1,282

2007 $765 $465 $230 $40 $11 $268 $1,779

2008 $476 $348 $182 $45 $9 $218 $1,278

2009 $518 $488 $275 $61 $10 $334 $1,686

2010 $557 $612 $360 $124 $8 $459 $2,119

2011 $551 $667 $404 $148 $10 $500 $2,279

2012 $631 $776 $544 $198 $12 $577 $2,739

1Q 2013 $696 $838 $582 $215 $23 $635 $2,989

Note: SMA Advisory-dual contracts added in 3Q 2006. Represents a net increase of approximately $80 billion to the SMA advisory segment. ETF Advisory/Other primarily includes unclassified assets. MS totals may have changed since the prior publication due to restatements. Overlapping netassets are being accounted for historically.

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EXHIBIT 1.3 Quarterly MS Assets by Market Segment ($ billions)Sources: Money Management Institute, Dover Financial Research

Period SMA Mutual Rep as UMA ETF Total MS Rep as Total MS Advisory Fund Portfolio Program Advisory/ (excl. RAA) Advisor (incl. RAA)


1Q 2007 $720 $388 $183 $34 $8 $1,332 - $1,332

2Q 2007 $757 $423 $197 $37 $9 $1,424 - $1,424

3Q 2007 $766 $454 $212 $39 $9 $1,480 - $1,480

4Q 2007 $765 $465 $230 $40 $11 $1,511 $268 $1,779

1Q 2008 $699 $451 $221 $38 $11 $1,421 $267 $1,688

2Q 2008 $681 $460 $226 $43 $11 $1,421 $271 $1,693

3Q 2008 $605 $419 $214 $40 $10 $1,286 $249 $1,535

4Q 2008 $476 $348 $182 $45 $9 $1,060 $218 $1,278

1Q 2009 $432 $324 $180 $44 $2 $981 $219 $1,200

2Q 2009 $467 $388 $212 $47 $9 $1,122 $261 $1,384

3Q 2009 $514 $450 $261 $58 $11 $1,294 $312 $1,606

4Q 2009 $518 $488 $275 $61 $10 $1,353 $334 $1,686

1Q 2010 $532 $533 $297 $73 $11 $1,444 $399 $1,843

2Q 2010 $493 $523 $295 $81 $4 $1,395 $389 $1,784

3Q 2010 $524 $572 $328 $106 $4 $1,535 $420 $1,955

4Q 2010 $557 $612 $360 $124 $8 $1,660 $459 $2,119

1Q 2011 $584 $665 $403 $129 $9 $1,790 $491 $2,281

2Q 2011 $596 $691 $410 $139 $10 $1,845 $506 $2,351

3Q 2011 $547 $629 $386 $132 $9 $1,703 $471 $2,174

4Q 2011 $551 $667 $404 $148 $10 $1,780 $500 $2,279

1Q 2012 $590 $716 $447 $179 $10 $1,943 $547 $2,490

2Q 2012 $593 $712 $456 $175 $11 $1,947 $542 $2,489

3Q 2012 $611 $757 $528 $189 $11 $2,097 $568 $2,665

4Q 2012 $631 $776 $544 $198 $12 $2,161 $577 $2,739

1Q 2013 $696 $838 $582 $215 $23 $2,355 $635 $2,989

Note: Overlapping net assets are being accounted for historically.

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EXHIBIT 1.4 Quarterly MS Asset Growth Rates by Market SegmentSources: Money Management Institute, Dover Financial Research

Period SMA Mutual Rep as UMA ETF Total MS Rep as Total MS Advisory Fund Portfolio Program Advisory/ (excl. RAA) Advisor (incl. RAA)


1Q 2008 –8.5% –3.0% –3.6% –5.6% –0.7% –6.0% –0.3% –5.1%

2Q 2008 –2.6% 2.1% 2.0% 13.9% 0.2% – 1.4% 0.3%

3Q 2008 –11.2% –9.1% –5.5% –7.3% –14.3% –9.5% –8.3% –9.3%

4Q 2008 –21.3% –16.8% –15.0% 13.4% –6.9% –17.6% –12.3% –16.8%

1Q 2009 –9.3% –6.9% –1.0% –3.1% –74.9% –7.4% 0.4% –6.1%

2Q 2009 8.3% 19.6% 17.7% 6.8% 321.8% 14.4% 19.5% 15.3%

3Q 2009 10.1% 16.2% 23.3% 24.7% 14.6% 15.3% 19.3% 16.1%

4Q 2009 0.8% 8.5% 5.4% 5.2% –7.9% 4.5% 7.0% 5.0%

1Q 2010 2.6% 9.1% 8.0% 18.6% 6.1% 6.8% 19.6% 9.3%

2Q 2010 –7.3% –1.9% –0.7% 11.3% –61.5% –3.4% –2.5% –3.2%

3Q 2010 6.3% 9.5% 11.2% 31.2% 7.6% 10.0% 7.9% 9.5%

4Q 2010 6.2% 6.8% 9.9% 16.8% 84.2% 8.2% 9.3% 8.4%

1Q 2011 4.9% 8.8% 11.8% 4.2% 15.2% 7.8% 7.0% 7.6%

2Q 2011 2.0% 3.8% 1.9% 7.7% 4.9% 3.1% 3.1% 3.1%

3Q 2011 –8.3% –9.0% –5.9% –4.8% –5.7% –7.7% –6.8% –7.5%

4Q 2011 0.7% 6.0% 4.6% 12.3% 12.4% 4.5% 6.0% 4.8%

1Q 2012 7.1% 7.4% 10.8% 20.5% 0.4% 9.2% 9.4% 9.2%

2Q 2012 0.5% –0.5% 2.0% –1.9% 2.0% 0.2% –0.9% -

3Q 2012 3.1% 6.3% 15.8% 7.8% 7.2% 7.7% 4.9% 7.1%

4Q 2012 3.2% 2.5% 3.0% 4.8% 4.3% 3.1% 1.6% 2.7%

1Q 2013 10.4% 8.0% 7.0% 8.2% 96.8% 9.0% 9.9% 9.2%

Note: Dual contracts added in 3Q 2006. Represents a net increase of approximately $80 billion to the SMA advisory segment. ETF Advisory/Otherprimarily includes unclassified assets. Rep as Advisor assets from 1Q 2010 to 1Q 2011 were restated to include Pershing’s non-sponsored RAA assets.Rep as Advisor was added as a segment in 4Q 2007 due to the federal court’s decision to rescind Rule 202. Overlapping net assets are being accountedfor historically. The increase in 1Q 2013 ETF growth can be attributed to Wells Fargo recategorizing approximately $9.6 billion from SMA Advisory to ETF Advisory.

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EXHIBIT 1.5 MS Industry Historical Net Inflows by Market Segment ($ billions)Sources: Money Management Institute, Dover Financial Research

Period SMA Mutual UMA Rep as Rep as ETF Total MSAdvisory Fund Program Portfolio Advisor Advisory/ (incl. RAA)


1Q 2008 ($1.3) $9.2 $0.6 $3.6 $7.6 $0.1 $19.7

2Q 2008 ($2.1) $10.1 $3.5 $8.3 $8.1 $0.1 $27.9

3Q 2008 ($11.9) $6.0 $1.8 $5.2 $4.4 - $5.4

4Q 2008 ($20.9) ($5.8) $0.4 $0.2 $1.3 $0.1 ($24.7)

1Q 2009 ($19.4) ($3.9) $0.9 $6.6 $6.3 $0.1 ($9.4)

2Q 2009 $0.7 $7.8 $4.5 $13.1 $14.7 ($0.1) $40.7

3Q 2009 $1.0 $10.6 $4.9 $12.2 $14.7 $0.1 $43.5

4Q 2009 ($2.0) $10.8 $5.3 $18.6 $15.9 $0.3 $48.9

1Q 2010 $1.0 $14.3 $5.0 $12.6 $15.7 $0.3 $49.0

2Q 2010 ($0.2) $11.1 $6.7 $10.1 $13.6 ($0.6) $40.8

3Q 2010 $6.9 $14.8 $5.2 $10.6 $11.7 ($0.1) $49.0

4Q 2010 $1.8 $7.4 $10.7 $15.3 $17.6 $0.8 $53.6

1Q 2011 $9.3 $20.9 $10.5 $24.5 $15.2 $0.5 $81.0

2Q 2011 $5.7 $18.3 $6.9 $16.0 $13.2 $0.3 $60.3

3Q 2011 $7.0 $10.7 $4.3 $12.0 $8.7 $0.1 $42.8

4Q 2011 ($1.6) $6.6 $3.6 $11.3 $5.7 - $25.6

1Q 2012 $5.6 $10.9 $4.6 $18.5 $12.4 $0.1 $52.1

2Q 2012 $3.4 $11.1 $3.7 $14.7 $7.3 $0.1 $40.4

3Q 2012 $6.6 $10.1 $4.8 $15.0 $8.6 - $45.1

4Q 2012 $4.6 $11.5 $4.7 $16.4 $9.6 ($0.9) $46.0

1Q 2013 $12.9 $18.6 $8.8 $29.4 $19.0 $0.6 $89.3

2008 ($36.2) $19.5 $6.2 $17.3 $21.3 $0.3 $28.4

2009 ($19.6) $25.3 $15.6 $50.5 $51.5 $0.3 $123.6

2010 $9.4 $47.7 $27.6 $48.6 $58.7 $0.4 $192.4

2011 $20.4 $56.5 $25.3 $63.8 $42.8 $0.9 $209.7

2012 $20.2 $43.6 $17.8 $64.7 $37.9 ($0.7) $183.6


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EXHIBIT 1.6 Annual SMA Trends by Component ($ billions)Sources: Money Management Institute, Dover Financial Research

EXHIBIT 1.7 Annual SMA Asset Trends by Component –Percentage of Total SMA IndustrySources: Money Management Institute, Dover Financial Research

Period SMA Dual Multi- Total SMA UMA Total SMASubadvisory Contract Discipline Program + UMA

Portfolio Program

2003 $326.9 $95.1 $16.5 $438.4 - $438.4

2004 $393.1 $107.4 $42.9 $543.3 - $543.3

2005 $439.5 $120.0 $60.8 $620.3 - $620.3

2006 $505.2 $133.2 $76.2 $714.6 $30.8 $745.4

2007 $528.0 $148.9 $87.9 $764.8 $39.9 $804.7

2008 $329.5 $103.1 $43.4 $476.0 $45.1 $521.1

2009 $362.3 $125.3 $30.7 $518.3 $61.2 $579.6

2010 $378.4 $158.6 $19.8 $556.8 $123.7 $680.5

2011 $352.1 $184.2 $14.4 $550.7 $148.3 $699.0

2012 $386.0 $232.0 $12.9 $630.9 $198.5 $829.3

1Q 2013 $403.7 $279.2 $13.6 $696.5 $214.7 $911.2

Note: Restated annual SMA asset data includes dual contract assets retroactively. Overlapping net assets arebeing accounted for historically.

Period SMA Dual Multi- Total SMA UMA Total SMASubadvisory Contract Discipline Program + UMA

Portfolio Program

2003 75% 22% 4% 100% - 100%

2004 72% 20% 8% 100% - 100%

2005 71% 19% 10% 100% - 100%

2006 68% 18% 10% 96% 4% 100%

2007 66% 18% 11% 95% 5% 100%

2008 63% 20% 8% 91% 9% 100%

2009 63% 22% 5% 89% 11% 100%

2010 56% 23% 3% 82% 18% 100%

2011 50% 26% 2% 79% 21% 100%

2012 47% 28% 2% 76% 24% 100%

1Q 2013 44% 31% 1% 76% 24% 100%

Note: Restated annual SMA asset data includes dual contract assets retroactively. Overlapping net assets arebeing accounted for historically.

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EXHIBIT 1.8 Multi-Discipline Portfolio Assets ($ billions)Sources: Money Management Institute, Dover Financial Research

Period MDP Assets % Growth

2003 $16.5 —

2004 $42.9 160.7%

2005 $60.8 41.8%

2006 $76.2 25.3%

2007 $87.9 15.4%

2008 $43.4 –50.7%

2009 $30.7 –29.1%

2010 $19.8 –35.5%

2011 $14.4 –27.5%

2012 $12.9 –10.2%

1Q 2013 $13.6 5.6%


EXHIBIT 1.9 Unified Managed Account Assets ($ billions)Sources: Money Management Institute, Dover Financial Research

Period UMA Program % Growth

2006 $30.8 -

2007 $39.9 29.3%

2008 $45.1 13.1%

2009 $61.2 35.7%

2010 $123.7 102.1%

2011 $148.3 19.9%

2012 $198.5 33.8%

1Q 2013 $214.7 8.2%


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EXHIBIT 1.10 MS Assets by Program Type: Wirehouse vs. Non-Wirehouse ($ billions)Sources: Money Management Institute, Dover Financial Research

Assets

Program Type 2008 2009 2010 2011 2012 1Q 2013

Wirehouse

SMA Subadvisory $260.8 $295.9 $287.4 $265.4 $284.0 $291.0

Mutual Fund Advisory $132.3 $156.3 $158.2 $155.0 $173.7 $185.8

Rep as Portfolio Manager $151.9 $219.5 $290.6 $325.9 $417.6 $462.6

Rep as Advisor $149.0 $221.4 $286.6 $324.5 $372.1 $405.3

Dual Contract $77.4 $84.7 $107.6 $122.3 $156.3 $196.9

Multi-Discipline Portfolio $43.4 $29.2 $18.1 $12.8 $11.5 $12.1

UMA Program $28.9 $35.1 $73.7 $88.6 $104.7 $115.5

ETF Advisory/Other $7.3 $6.9 $11.1 $0.8 $1.0 $11.0

Total $850.9 $1,049.0 $1,233.3 $1,295.1 $1,520.9 $1,680.3

Non-Wirehouse

SMA Subadvisory $68.8 $66.4 $90.9 $86.7 $102.0 $112.7



Rep as Advisor $68.9 $112.2 $161.7 $175.4 $205.2 $229.3

Dual Contract $25.7 $40.6 $51.1 $62.0 $75.7 $82.3


UMA Program $16.2 $26.1 $49.9 $59.7 $93.8 $99.2


Total $426.8 $637.5 $885.8 $984.3 $1,217.7 $1,309.0

Total MS

SMA Subadvisory $329.5 $362.3 $378.4 $352.1 $386.0 $403.7



Rep as Advisor $217.9 $333.6 $448.3 $499.9 $577.3 $634.6

Dual Contract $103.1 $125.3 $158.6 $184.2 $232.0 $279.2


UMA Program $45.1 $61.2 $123.7 $148.3 $198.5 $214.7


Total $1,277.7 $1,686.5 $2,119.1 $2,279.5 $2,738.5 $2,989.3

Note: Historical data restated to reflect mergers and acquisitions as well as recategorizations. Prudential was recategorized as a wirehouse for 2008.Overlapping net assets are being accounted for historically.

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EXHIBIT 1.11 MS Assets by Market Segment: Wirehouse vs. Non-Wirehouse ($ billions)Sources: Money Management Institute, Dover Financial Research

Assets

Program Type 2008 2009 2010 2011 2012 1Q 2013

Wirehouse

SMA Advisory $381.5 $409.8 $413.0 $400.5 $451.8 $500.0



Rep as Advisor $149.0 $221.4 $286.6 $324.5 $372.1 $405.3

UMA Program $28.9 $35.1 $73.7 $88.6 $104.7 $115.5


Total $850.9 $1,049.0 $1,233.3 $1,295.1 $1,520.9 $1,680.3

Non-Wirehouse

SMA Advisory $94.5 $108.5 $143.8 $150.2 $179.1 $196.5



Rep as Advisor $68.9 $112.2 $161.7 $175.4 $205.2 $229.3

UMA Program $16.2 $26.1 $49.9 $59.7 $93.8 $99.2


Total $426.8 $637.5 $885.8 $984.3 $1,217.7 $1,309.0

Total MS

SMA Advisory $476.0 $518.3 $556.8 $550.7 $630.9 $696.5



Rep as Advisor $217.9 $333.6 $448.3 $499.9 $577.3 $634.6

UMA Program $45.1 $61.2 $123.7 $148.3 $198.5 $214.7


Total $1,277.7 $1,686.5 $2,119.1 $2,279.5 $2,738.5 $2,989.3

Note: Historical data restated to reflect mergers and acquisitions as well as recategorizations. Prudential was recategorized as a wirehouse for 2008.Overlapping net assets are being accounted for historically.


EXHIBIT 1.12 MS Accounts and Assets by Market SegmentSources: Money Management Institute, Dover Financial Research

MS Segment 2006 2007 2008 2009 2010 2011 2012 1Q 2013

Number of Accounts (thousands)

SMA Advisory 1,615 1,649 1,482 1,276 1,185 1,148 1,199 1,170

Mutual Fund Advisory 2,565 3,152 3,312 2,940 4,044 4,691 5,205 5,254

Rep as Portfolio Manager 569 587 660 768 840 1,076 1,443 1,478

Rep as Advisor - 876 967 1,160 1,517 1,732 1,805 1,875

UMA Program 65 80 142 206 399 450 435 522

ETF Advisory/Other 44 66 61 64 45 67 64 137

Total MS 4,857 6,409 6,623 6,414 8,030 9,164 10,150 10,436

Ending Assets ($ billions)

SMA Advisory $714.6 $764.8 $476.0 $518.3 $556.8 $550.5 $630.7 $696.3

Mutual Fund Advisory $360.8 $465.3 $348.3 $488.3 $611.5 $666.5 $775.9 $838.2

Rep as Portfolio Manager $168.6 $229.6 $181.5 $275.1 $360.3 $403.7 $544.5 $582.5

Rep as Advisor - $268.0 $217.9 $333.6 $458.8 $499.9 $577.3 $634.6

UMA Program $30.8 $39.9 $45.1 $61.2 $123.7 $148.5 $198.3 $214.5

ETF Advisory/Other $6.8 $9.9 $8.9 $9.9 $8.0 $10.3 $11.8 $23.2

Total MS $1,281.6 $1,777.5 $1,277.7 $1,686.5 $2,119.1 $2,279.5 $2,738.5 $2,989.3

Average Account Size ($ thousands)

SMA Advisory $442.5 $463.8 $321.3 $406.2 $469.9 $479.4 $525.9 $595.3

Mutual Fund Advisory $140.7 $147.6 $105.2 $166.1 $151.2 $142.1 $149.1 $159.5

Rep as Portfolio Manager $296.5 $391.4 $275.1 $358.3 $429.1 $375.0 $377.4 $394.1

Rep as Advisor - $305.9 $225.3 $287.6 $302.4 $288.6 $319.9 $338.4

UMA Program $478.1 $499.8 $317.3 $296.9 $309.9 $330.2 $456.3 $411.0

ETF Advisory/Other $154.5 $150.0 $146.6 $154.9 $178.5 $154.2 $182.6 $169.1

Total MS $263.9 $277.3 $192.9 $262.9 $263.9 $248.7 $269.8 $286.4

Note: Reported accounts are representative of approximately 98% of the MS industry. Overlapping net assets are being accounted for historically. Exhibit now includes ETF Advisory segment.

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EXHIBIT 1.13 MS Accounts and Assets by Discretion TypeSources: Money Management Institute, Dover Financial Research

Discretion Type 2007 2008 2009 2010 2011 2012 1Q 2013

Ending Assets ($ billions)

Discretionary–FA $197.9 $169.9 $272.2 $355.3 $396.8 $505.1 $562.2

Discretionary–Firm $822.7 $577.9 $530.5 $573.6 $618.4 $724.4 $788.7

Mixed - - $5.7 $95.4 $120.4 $146.6 $123.7

Non-Discretionary $668.7 $462.3 $738.2 $836.0 $893.4 $1,066.1 $1,176.3

Total MS $1,689.3 $1,210.1 $1,546.7 $1,860.3 $2,029.0 $2,442.2 $2,650.9

Number of Accounts (thousands)

Discretionary–FA 480 590 764 846 1,016 1,271 1,380

Discretionary–Firm 2,755 2,854 2,339 2,478 2,884 3,117 3,339

Mixed - - 44 399 608 715 586

Non-Discretionary 2,901 2,874 2,775 3,507 3,625 3,812 3,751

Total MS 6,137 6,318 5,921 7,230 8,133 8,915 9,056

Note: Non-sponsored third-party assets are not included because access to broker/dealer discretion is not available. Overlapping net assets are beingaccounted for historically.

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EXHIBIT 1.14 MS Asset Share by Discretion Type Sources: Money Management Institute, Dover Financial Research

0%

25%

50%

75%

100%

Discretionary–FA Discretionary–Firm Mixed Non-Discretionary

2007 2008 2009 2010 2011 2012 1Q 2013

44.4%

29.8%

21.2%

4.7%

44.0%

30.5%

5.9%

19.6%

43.7%

29.7%

6.0%

20.7%

44.9%

30.8%

5.1%

19.1%

47.7%

34.3%

17.6%

0.4%

38.2%

47.8%

14.0%

48.7%

39.6%

11.7%

EXHIBIT 1.15 MS Account Market Share by Discretion TypeSources: Money Management Institute, Dover Financial Research

0%

25%

50%

75%

100%

Discretionary–FA Discretionary–Firm Mixed Non-Discretionary

2007 2008 2009 2010 2011 2012 1Q 2013

44.9%45.2% 39.5%

46.9% 48.5%

34.3% 35.5%

44.6% 42.8%

35.0%

45.5%47.3%

7.8% 9.3% 12.9% 11.7%

5.5%0.7% 7.5% 8.0%

12.5% 14.3%

41.4%

36.9%

6.5%

15.2%

Note: Overlapping net assets are being accounted for historically. Only sponsored assets are included.

Note: Only sponsored assets are included.

EXHIBIT 2.1 Managed Solutions Asset Trends: Top 10 Firms ($ billions)Sources: Money Management Institute, Dover Financial Research

2007 2008 2009 2010 2011 2012 1Q 2013

1. Morgan Stanley Wealth Management $489.1 $326.3 $375.4 $449.7 $463.1 $546.4 $614.7

2. BOA ML $360.6 $252.8 $307.8 $360.9 $372.1 $432.7 $474.6

3. Wells Fargo $221.4 $149.8 $195.7 $232.9 $257.2 $297.8 $325.4

4. UBS Financial $171.2 $116.4 $160.3 $189.8 $202.8 $243.9 $265.6

5. Charles Schwab $56.2 $43.8 $64.3 $72.0 $76.0 $133.2 $142.6

6. Ameriprise Financial Services $80.3 $60.1 $81.3 $97.5 $103.4 $124.6 $133.8

7. Fidelity Investments $69.2 $55.5 $67.9 $89.8 $98.5 $119.4 $130.4

8. LPL Financial Services $69.5 $60.9 $77.1 $93.0 $101.5 $122.1 $130.2

9. Edward Jones $3.5 $7.6 $28.7 $53.7 $68.6 $87.1 $95.9

10. Raymond James $43.8 $33.3 $46.2 $56.3 $62.1 $72.1 $91.4

Note: Charles Schwab recategorized a Dual Contract/SMA Advisory program with approximately $42.2 billion in assets from non-sponsored to sponsored SMA in 3Q 2011.

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Sponsor Firm Rankings

section 2


EXHIBIT 2.2 SMA Advisory Segment: Top 10 Firms ($ billions)Sources: Money Management Institute, Dover Financial Research

2007 2008 2009 2010 2011 2012 1Q 2013


2. BOA ML $208.0 $134.6 $143.8 $143.2 $125.9 $137.5 $144.4

3. Charles Schwab $10.0 $7.4 $11.7 $15.9 $20.7 $71.8 $76.6

4. Wells Fargo $78.2 $50.1 $63.4 $58.9 $61.2 $66.8 $63.7

5. UBS Financial $67.5 $40.3 $50.0 $54.0 $53.2 $60.0 $63.4

6. RBC Dain Rauscher $8.5 $5.8 $8.2 $9.8 $9.9 $11.8 $13.2

7. Raymond James $11.3 $7.5 $8.3 $9.1 $8.9 $6.7 $12.2

8. Envestnet — — — $6.5 $7.7 $9.9 $11.0

9. Deutsche Bank — — — — $5.1 $5.9 $4.8

10. Oppenheimer & Company $6.4 $5.5 $4.0 $4.2 $3.9 $4.0 $4.2

Note: Charles Schwab recategorized a Dual Contract/SMA Advisory program with approximately $42.2 billion in assets from non-sponsored to sponsored SMA in 3Q 2011.

EXHIBIT 2.3 Mutual Fund Advisory Segment: Top 10 Firms ($ billions) Sources: Money Management Institute, Dover Financial Research

2007 2008 2009 2010 2011 2012 1Q 2013

1. Ameriprise Financial Services $77.9 $58.6 $79.2 $95.3 $101.3 $119.2 $127.5

2. LPL Financial Services $63.9 $56.8 $72.4 $88.1 $97.0 $117.2 $125.0

3. Fidelity Investments $58.9 $45.0 $67.9 $89.8 $93.1 $96.8 $105.5

4. Edward Jones — $5.0 $26.2 $51.3 $66.2 $83.8 $92.3

5. Wells Fargo $61.1 $37.7 $46.1 $56.9 $62.0 $75.3 $82.0

6. UBS Financial $50.7 $32.7 $39.4 $45.8 $45.9 $50.8 $54.1


8. BOA ML $39.9 $27.6 $31.7 $16.7 $15.9 $16.4 $17.4

9. Genworth Financial — $9.2 $11.9 $14.5 $17.3 $15.3 $15.3

10. Charles Schwab $4.5 $4.2 $7.6 $10.3 $11.2 $13.4 $14.3


EXHIBIT 2.4 Rep as Portfolio Manager Segment: Top 10 Firms ($ billions)Sources: Money Management Institute, Dover Financial Research

2007 2008 2009 2010 2011 2012 1Q 2013


2. BOA ML $48.2 $40.5 $58.2 $79.2 $93.4 $116.9 $132.8

3. UBS Financial $21.5 $18.8 $32.2 $42.3 $52.1 $72.0 $81.2

4. Wells Fargo $23.7 $18.9 $28.2 $35.8 $42.9 $54.5 $60.5

5. AIG — — $20.7 $23.3 $23.7 $26.6 $28.0


7. FolioDynamix $3.1 $2.4 $5.4 $6.7 $7.9 $6.5 $7.2

8. Oppenheimer & Company $1.7 $2.2 $2.9 $3.2 $3.6 $3.9 $4.2

9. Deutsche Bank — — — — $1.8 $2.1 $3.6

10. Ameriprise Financial Services — — — — — $2.8 $3.4

EXHIBIT 2.5 Rep as Advisor Segment: Top 10 Firms ($ billions) Sources: Money Management Institute, Dover Financial Research

2007 2008 2009 2010 2011 2012 1Q 2013

1. BOA ML $63.6 $46.8 $66.9 $104.1 $115.3 $134.9 $149.8


3. Wells Fargo $48.6 $36.6 $58.0 $61.0 $81.7 $90.7 $97.8

4. Raymond James $24.2 $19.7 $29.7 $36.6 $41.0 $50.1 $60.5

5. UBS Financial $29.6 $22.5 $34.3 $42.1 $44.7 $52.0 $56.7

6. Charles Schwab $41.8 $32.2 $44.9 $43.8 $41.7 $45.6 $49.1


8. Northwestern Mutual — $7.2 $10.0 $13.0 $14.1 $17.5 $18.9

9. AIG — — $6.8 $7.5 $7.6 $8.1 $9.8

10. Sun Trust — — $2.0 $2.4 $2.5 $3.1 $3.5

Note: Only sponsored assets are included for consistency with Central.


EXHIBIT 2.6 Unified Managed Account Program Segment: Top 10 Firms ($ billions)Sources: Money Management Institute, Dover Financial Research

2007 2008 2009 2010 2011 2012 1Q 2013


2. BOA ML $0.8 $3.2 $7.1 $17.8 $21.6 $27.1 $30.3

3. Fidelity Investments — — — — $5.5 $22.6 $24.9

4. Wells Fargo — — — $9.9 $9.4 $10.4 $11.4

5. UBS Financial $1.0 $1.3 $3.2 $5.0 $6.2 $8.0 $9.0

6. Curian Capital — $2.6 $3.6 $5.4 $6.9 $8.0 $8.9

7. Envestnet — — — $1.2 $1.4 $5.7 $6.9

8. SEI Investments $7.0 $5.2 $5.9 $6.6 $6.8 $7.7 $5.6

9. FolioDynamix $0.4 $0.3 $1.0 $1.2 $1.6 $4.9 $5.1

10. TIAA-CREF — — $0.4 $2.0 $3.7 $4.3 $4.7

Note: Envestnet recategorized certain mutual fund advisory assets to UMA program assets in 4Q 2012.


EXHIBIT 2.7 Third-Party Service Provider Assets by Component Type ($ billions), 1Q 2013 Sources: Money Management Institute, Dover Financial Research

SMA Mutual Rep Rep as UMA ETFAdvisory Fund as Portfolio Program Advisory/

Advisory Advisor Manager Other

1. Envestnet $11.0 $12.9 - - $6.9 $4.2

2. Pershing/Lockwood $2.2 $14.0 - - $1.4 -

3. FolioDynamix $2.8 $0.8 - $7.2 $5.6 -

4. SEI Investments - - - - $5.6 -

5. Prudential Investments $0.4 $3.1 - - - -

6. Citi - - - - - -

7. Brinker Capital $4.2 $8.1 - - $0.7 -

8. Genworth Financial - $15.3 - - $4.0 $3.8

9. Curian Capital - - - - $8.9 -

Total $20.6 $54.1 $0.0 $7.2 $33.1 $8.0

Sponsored Advisory Non-Sponsored Advisory Total AUA

Assets % Assets % Assets %

1. Envestnet $34.9 28.4% $93.4 30.1% $276.7 54.8% $405.0

2. Pershing/Lockwood $17.6 14.3% $113.6 36.5% $204.6 40.5% $335.7

3. FolioDynamix $16.4 13.3% $50.0 16.1% - - $66.4

4. SEI Investments $5.6 4.5% $31.1 10.0% - - $36.7

5. Prudential Investments $3.5 2.9% $21.4 6.9% - - $25.0

6. Citi - - - - $24.0 4.7% $24.0

7. Brinker Capital $13.0 10.6% $1.3 0.4% - - $14.2

8. Genworth Financial $23.1 18.8% - - - - $23.1

9. Curian Capital $8.9 7.2% - - - - $8.9

Total $122.8 100.0% $310.8 100.0% $505.3 100.0% $938.9

Note: The market segment assets represent sponsored assets. Total AUA represents assets under administration associated with ancillary services suchas performance reporting. Total TPS assets is the sum of sponsored, non-sponsored and AUA assets.

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TotalTPS

Assets


section 3

EXHIBIT 3.1 SMA Assets by Asset Classification ($ billions)Sources: Money Management Institute, Dover Financial Research

Category 2008 2009 2010 2011 2012 1Q 2013

Balanced $20.6 $25.0 $22.1 $18.7 $19.7 $21.2

Domestic Equity $117.1 $108.8 $101.7 $77.3 $67.7 $69.7

Fixed Income $92.9 $104.4 $104.8 $120.9 $132.8 $133.9

International Equity $49.4 $49.4 $48.6 $33.6 $32.3 $32.5

Other $43.3 $34.7 $31.9 $23.7 $35.1 $37.7

Total $323.2 $322.4 $309.1 $274.2 $287.6 $295.1

Note: 2011 data now reflects Manning & Napier 4Q 2011 data, which was submitted earlier this year. The “Other” category represents Specialty Domestic Equity assets.

EXHIBIT 3.2 Historical Trends – SMA Market Share by Asset ClassificationSources: Money Management Institute, Dover Financial Research

Balanced Domestic Equity Fixed Income International Equity Other

2008 2009 2010 2011 2012 1Q 2013

68 7 7 7 7

3633

2824 24

2932

34

4446 45

15 15 16

12 11 1113 131211 10 9

34

0%

10%

20%

30%

40%

50%

SMA Manager Statistics

Note: 2011 data now reflects Manning & Napier 4Q 2011 data, which was submitted earlier this year.


EXHIBIT 3.3 Top 25 Investment Managers Ranked by Total SMA AUM ($ billions)Sources: Money Management Institute, Dover Financial Research

2008 2009 2010 2011 2012 1Q 2013

1. BlackRock Financial Management $36.0 $39.7 $44.7 $51.2 $58.2 $61.3

2. Nuveen Investments $33.9 $40.2 $48.9 $46.3 $39.6 $39.9

3. Legg Mason $32.7 $33.2 $34.3 $31.2 $31.9 $34.5

4. PIMCO - - - $19.5 $21.5 $21.6

5. Eaton Vance $16.8 $14.6 $18.2 $18.2 $19.4 $20.2

6. Neuberger Berman - $18.9 $20.0 $18.9 $18.8 $19.2

7. J.P. Morgan Investment Management $8.8 $12.4 $12.0 $11.6 $13.4 $15.0

8. Allianz Global Investors $24.0 $26.4 $27.5 $13.7 $13.4 $14.5

9. Lord Abbett $13.3 $13.5 $14.0 $12.4 $11.5 $11.7

10. Pacific Income Advisors - - $1.9 $1.5 $11.1 $10.5

11. Federated Investors $9.2 $6.0 $5.8 $6.9 $9.3 $10.5

12. Lazard Asset Management $7.6 $8.7 $9.2 $8.1 $9.3 $10.5

13. Columbia Management Advisors $11.1 $8.8 $8.2 $2.2 $8.2 $8.9

14. UBS Global Asset Management $8.5 $7.2 $7.5 $7.3 $8.4 $8.7

15. Invesco Aim $4.1 $5.0 $8.3 - $7.7 $8.0

16. Dreyfus Investments $4.4 $5.6 $4.4 $5.9 $7.0 $7.8

17. Delaware Capital Management $7.5 $7.5 $6.2 $6.8 $7.2 $7.7

18. Thornburg Investment Management $4.1 $5.1 $6.9 $6.6 $7.3 $7.5

19. Natixis Global Associates $10.1 $6.2 $7.2 $6.7 $6.9 $7.4

20. Manning & Napier Advisors - $5.3 $6.0 $6.0 $6.6 $7.2

21. Franklin Templeton Investments $6.8 $7.5 $7.6 $7.5 $7.0 $6.9

22. Madison Investment Advisors $6.9 $8.3 $6.8 $7.1 $6.8 $6.7

23. MFS Investment Management $4.5 $6.1 $6.3 $5.4 $5.8 $6.6

24. Principal Global Investors $0.7 - $1.9 $3.7 $5.7 $6.6

25. Brandes Investment Partners $12.4 $11.0 $9.6 $6.2 $5.0 $5.0

Top 25 Managers $263.3 $297.1 $323.6 $310.8 $347.0 $364.3

Total SMA Advisory Assets $476.0 $518.3 $556.8 $550.7 $630.7 $696.3

Top 25 as % of SMA 55.3% 57.3% 58.1% 56.4% 55.0% 52.3%

Note: The total is a sum of traditional SMA assets and model portfolio assets.

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EXHIBIT 3.4 Top 25 Investment Managers Ranked by Traditional SMA AUM ($ billions)Sources: Money Management Institute, Dover Financial Research

2008 2009 2010 2011 2012 1Q 2013

1. BlackRock Financial Management $29.4 $33.8 $38.8 $45.5 $51.7 $54.4

2. Nuveen Investments $33.9 $38.6 $46.2 $41.3 $33.7 $33.5

3. Legg Mason $32.7 $32.7 $32.6 $22.7 $18.5 $19.4

4. Eaton Vance $10.3 $12.0 $14.0 $13.7 $15.3 $15.8

5. PIMCO — — — $11.3 $13.3 $13.5

6. J.P. Morgan Investment Management $8.1 $10.9 $8.8 $8.1 $9.6 $10.8

7. Pacific Income Advisors — — $1.9 $1.5 $11.1 $10.5

8. Lord Abbett $13.1 $13.4 $10.6 $9.5 $9.9 $10.0

9. Neuberger Berman — $15.5 $11.4 $10.8 $10.0 $9.4

10. UBS Global Asset Management $8.5 $7.2 $7.5 $7.3 $8.4 $8.7

11. Manning & Napier Advisors — $5.3 $6.0 $6.0 $6.6 $7.2

12. Thornburg Investment Management $4.0 $4.9 $6.5 $6.0 $6.6 $6.8

13. Lazard Asset Management $6.8 $6.3 $6.7 $5.7 $6.4 $6.5

14. Delaware Capital Management $7.5 $6.9 $5.7 $6.2 $6.2 $6.5

15. Franklin Templeton Investments $6.3 $6.9 $6.9 $6.8 $6.5 $6.4

16. Madison Investment Advisors $6.8 $8.2 $6.7 $6.9 $6.4 $6.2

17. Invesco Aim $4.0 $4.7 $6.0 — $5.6 $5.9

18. Federated Investors $7.6 $4.6 $4.4 $4.7 $4.8 $5.4

19. Dreyfus Investments $4.3 $4.2 $4.1 $4.1 $4.6 $5.1

20. Brandes Investment Partners $12.4 $11.0 $9.1 $5.9 $4.8 $4.8

21. Principal Global Investors $0.7 — $1.9 $3.7 $4.0 $4.6

22. McDonnell Investment Management $2.9 $3.2 $3.6 $4.0 $4.4 $4.4

23. RNC Genter Capital Management $2.5 $3.0 $3.5 $3.7 $4.0 $4.1

24. AllianceBernstein Investments $8.3 $7.4 $6.0 $3.9 $3.7 $4.1

25. Allianz Global Investors $24.0 $25.8 $11.6 $4.3 $5.0 $3.9

Top 25 Managers $234.3 $266.4 $260.5 $243.5 $261.3 $267.8

Total SMA Advisory Assets $476.0 $518.3 $556.8 $550.7 $630.7 $696.3

Top 25 as % of SMA 49.2% 51.4% 46.8% 44.2% 41.4% 38.5%

Note: Manager assets exclude model portfolio assets if reported separately by investment managers.


EXHIBIT 3.5 SMA Assets by Discipline ($ millions)Sources: Money Management Institute, Dover Financial Research

Discipline 2008 2009 2010 2011 2012 1Q 2013

Domestic Equity

Large Cap Value $34,577 $33,097 $30,377 $23,936 $23,876 $24,012

Large Cap Growth $26,481 $27,338 $23,759 $17,774 $15,342 $14,644

Large Cap Core $22,381 $13,457 $12,089 $10,064 $8,224 $9,195

All-Cap Value $4,437 $3,392 $3,749 $2,491 $1,978 $1,925

All-Cap Growth $6,821 $7,751 $7,841 $6,900 $5,189 $5,479

All-Cap Core $9,554 $11,513 $10,436 $8,045 $6,874 $7,492

Mid Cap Value $3,852 $4,203 $5,258 $3,967 $2,529 $2,275

Mid Cap Growth $1,101 $984 $948 $580 $562 $549

Mid Cap Core $1,704 $1,369 $1,670 $467 $1,078 $1,212

Small Cap Value $2,218 $2,483 $2,492 $1,332 $1,278 $1,369

Small Cap Growth $1,301 $1,177 $1,436 $1,071 $244 $224

Small Cap Core $2,635 $2,078 $1,651 $710 $561 $1,373

Sub-Total $117,062 $108,842 $101,705 $77,334 $67,735 $69,748

International Equity

Global Equity $9,935 $8,168 $8,206 $6,203 $5,034 $4,799

International Large Core $4,157 $5,781 $4,484 $6,944 $8,668 $8,957

International Large Growth $2,578 $2,203 $2,638 $513 $3,593 $3,864

International Large Value $28,333 $17,724 $13,868 $9,928 $9,730 $10,061

International Other $4,270 $15,335 $19,331 $9,967 $5,214 $4,810

Regional Equity $118 $236 $44 $37 $29 $31

Sub-Total $49,391 $49,448 $48,570 $33,590 $32,268 $32,521

Fixed Income

Municipal Fixed Income $57,453 $62,207 $68,132 $77,735 $86,446 $87,553

Taxable Fixed Income $35,451 $42,197 $36,627 $43,125 $46,350 $46,306

Sub-Total $92,904 $104,404 $104,759 $120,860 $132,796 $133,858

Balanced

Taxable Balanced $18,467 $21,315 $17,549 $13,726 $14,036 $14,945

Municipal Balanced $2,139 $3,711 $4,601 $4,928 $5,695 $6,266

Sub-Total $20,606 $25,025 $22,149 $18,653 $19,731 $21,210

Other

Multiple Discipline Product $33,035 $25,044 $21,281 $16,543 $17,468 $18,500

Specialty Domestic Equity, REIT $1,194 $1,154 $1,535 $728 $11,251 $11,465

Specialty Domestic Equity, Convertibles $2,795 $3,117 $2,539 $1,787 $881 $1,169

Other Specialty Domestic Equity $6,233 $5,401 $6,547 $4,680 $5,512 $6,604

Sub-Total $43,258 $34,716 $31,902 $23,738 $35,112 $37,738

TOTAL $323,221 $322,435 $309,085 $274,176 $287,642 $295,075

Note: 2011 data now reflects Manning & Napier 4Q 2011 data, which was submitted earlier this year. SMA asset totals are based on a subset of investment managers that are members of MMI and report data to Dover.


EXHIBIT 3.6 SMA Market Share Based on AUM by DisciplineSources: Money Management Institute, Dover Financial Research

Discipline 2008 2009 2010 2011 2012 1Q 2013

Domestic Equity

Large Cap Value 10.7% 10.3% 9.8% 8.7% 8.3% 8.1%

Large Cap Growth 8.2% 8.5% 7.7% 6.5% 5.3% 5.0%

Large Cap Core 6.9% 4.2% 3.9% 3.7% 2.9% 3.1%

All-Cap Value 1.4% 1.1% 1.2% 0.9% 0.7% 0.7%

All-Cap Growth 2.1% 2.4% 2.5% 2.5% 1.8% 1.9%

All-Cap Core 3.0% 3.6% 3.4% 2.9% 2.4% 2.5%

Mid Cap Value 1.2% 1.3% 1.7% 1.4% 0.9% 0.8%

Mid Cap Growth 0.3% 0.3% 0.3% 0.2% 0.2% 0.2%

Mid Cap Core 0.5% 0.4% 0.5% 0.2% 0.4% 0.4%

Small Cap Value 0.7% 0.8% 0.8% 0.5% 0.4% 0.5%

Small Cap Growth 0.4% 0.4% 0.5% 0.4% 0.1% 0.1%

Small Cap Core 0.8% 0.6% 0.5% 0.3% 0.2% 0.5%

Sub-Total 36.2% 33.8% 32.9% 28.2% 23.5% 23.6%


Global Equity 3.1% 2.5% 2.7% 2.3% 1.8% 1.6%

International Large Core 1.3% 1.8% 1.5% 2.5% 3.0% 3.0%

International Large Growth 0.8% 0.7% 0.9% 0.2% 1.2% 1.3%

International Large Value 8.8% 5.5% 4.5% 3.6% 3.4% 3.4%

International Other 1.3% 4.8% 6.3% 3.6% 1.8% 1.6%

Regional Equity - 0.1% - - - -

Sub-Total 15.3% 15.3% 15.7% 12.3% 11.2% 11.0%

Fixed Income

Municipal Fixed Income 17.8% 19.3% 22.0% 28.4% 30.1% 29.7%

Taxable Fixed Income 11.0% 13.1% 11.9% 15.7% 16.1% 15.7%

Sub-Total 28.7% 32.4% 33.9% 44.1% 46.2% 45.4%

Balanced

Taxable Balanced 5.7% 6.6% 5.7% 5.0% 4.9% 5.1%

Municipal Balanced 0.7% 1.2% 1.5% 1.8% 2.0% 2.1%

Sub-Total 6.4% 7.8% 7.2% 6.8% 6.9% 7.2%

Other

Multiple Discipline Product 10.2% 7.8% 6.9% 6.0% 6.1% 6.3%

Specialty Domestic Equity, REIT 0.4% 0.4% 0.5% 0.3% 3.9% 3.9%

Specialty Domestic Equity, Convertibles 0.9% 1.0% 0.8% 0.7% 0.3% 0.4%

Other Specialty Domestic Equity 1.9% 1.7% 2.1% 1.7% 1.9% 2.2%

Sub-Total 13.4% 10.8% 10.3% 8.7% 12.2% 12.8%

TOTAL 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Note: 2011 data now reflects Manning & Napier 4Q 2011 data, which was submitted earlier this year. SMA asset totals are based on a subset of investment managers that are members of MMI and report data to Dover.

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EXHIBIT 3.7 Top Managers by Discipline – Ranked by SMA AUM ($ millions)Sources: Money Management Institute, Dover Financial Research

Manager 2008 2009 2010 2011 2012 1Q 2013 Total DisciplineShare Share

All-Cap Core

1. Neuberger Berman - $4,105.0 $3,540.0 $2,608.0 $2,221.0 $2,338.0 0.8% 31.2%

2. AllianceBernstein Investments $1,883.4 $2,046.2 $2,292.0 $1,759.6 $1,609.2 $1,672.6 0.6% 22.3%

3. Eaton Vance $856.0 $713.4 $1,054.9 $1,221.6 $1,336.6 $1,537.6 0.5% 20.5%

4. Federated Investors $4,597.6 $2,008.0 $1,656.2 $1,049.7 $689.3 $735.5 0.2% 9.8%

5. Manning & Napier Advisors - $409.0 $611.3 $574.4 $634.3 $732.1 0.2% 9.8%

6. Davis Advisors $642.8 $783.0 $454.7 $355.3 $323.4 $351.0 0.1% 4.7%

7. Clark Capital Mgmt. Group - - - - - $63.6 - 0.8%

8. J.P. Morgan Investment Mgmt. $114.7 $90.0 $57.0 $51.5 $37.9 $40.1 - 0.5%

9. Legg Mason $102.8 $239.0 $279.8 $196.3 $12.2 $13.7 - 0.2%

10. Wells Fargo Fund Mgmt. - - $5.0 $5.6 $5.5 $6.0 - 0.1%

Top 10 Total $8,197.3 $10,393.6 $9,950.9 $7,822.0 $6,869.4 $7,490.2 2.5% 100.0%

Discipline Total $9,553.8 $11,512.9 $10,436.1 $8,044.6 $6,874.1 $7,491.6 2.5% 100.0%

All-Cap Growth

1. Legg Mason $5,134.7 $5,749.6 $6,019.2 $5,066.3 $4,677.7 $4,842.2 1.6% 88.4%

2. Wells Fargo Fund Mgmt. - - $132.7 $170.1 $442.2 $560.4 0.2% 10.2%

3. Columbia Mgmt. Advisors - - - $77.8 $57.9 $59.5 - 1.1%

4. J.P. Morgan Investment Mgmt. - $0.1 $2.6 $9.0 $10.6 $12.1 - 0.2%

5. Thornburg Investment Mgmt. $24.5 $32.2 $10.0 $3.7 - $4.8 - 0.1%

6. Eaton Vance $0.5 $0.4 - $0.1 $0.2 $0.2 - -

7. Calamos Advisors $1,452.5 $1,731.9 $1,481.3 $1,488.8 - - - -

8. Fred Alger Mgmt. $25.7 $61.6 $69.8 $82.1 - - - -

9. Franklin Templeton Investments $25.6 $29.2 $31.0 $2.0 - - - -

10. Turner Investment Partners $38.8 - $93.9 - - - - -

Top 10 Total $6,702.2 $7,605.0 $7,840.5 $6,899.9 $5,188.6 $5,479.2 1.9% 100.0%


Note: Assets represent traditional SMA assets only. 2011 data now reflects Manning & Napier 4Q 2011 data, which was submitted earlier this year.

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EXHIBIT 3.7 (Continued)Top Managers by Discipline – Ranked by SMA AUM ($ millions)Sources: Money Management Institute, Dover Financial Research

Manager 2008 2009 2010 2011 2012 1Q 2013 Total Discipline Share Share

All-Cap Value

1. Nuveen Investments $669.8 $610.9 $1,246.3 $822.1 $827.7 $719.1 0.2% 37.4%

2. Brandes Investment Partners $704.6 $611.0 $531.0 $362.0 $340.0 $380.5 0.1% 19.8%

3. Legg Mason $1,773.9 $1,490.9 $1,332.6 $915.7 $269.1 $276.4 0.1% 14.4%

4. Allianz Global Investors $366.1 $315.4 $276.4 $240.2 $228.5 $246.8 0.1% 12.8%

5. Lord Abbett $0.2 $2.5 $43.2 $89.5 $113.7 $117.6 - 6.1%

6. Federated Investors $395.6 $240.5 $185.4 $0.3 $99.5 $110.7 - 5.8%

7. Jennison Associates $12.1 $18.0 $50.4 - $59.2 $33.7 - 1.8%

8. Eaton Vance $80.2 $62.0 $28.1 $19.4 $25.7 $18.7 - 1.0%

9. Robeco Investment Mgmt. - - $3.5 $0.4 $9.9 $14.7 - 0.8%


Top 10 Total $4,002.5 $3,351.2 $3,699.5 $2,453.0 $1,976.8 $1,922.1 0.5% 99.8%


Global Equity

1. Brandes Investment Partners $6,295.7 $5,447.0 $4,315.0 $2,639.0 $2,094.7 $2,143.8 0.7% 44.7%

2. Lazard Asset Mgmt. $1,323.0 $863.6 $763.0 $674.0 $760.0 $731.0 0.2% 15.2%

3. Nuveen Investments $1,011.0 - $1,778.8 $1,906.5 $680.8 $651.4 0.2% 13.6%

4. BlackRock Financial Mgmt. $101.0 $82.5 $95.3 $179.0 $259.0 $307.0 0.1% 6.4%

5. Dreyfus Investments $59.5 $108.8 $167.3 $223.5 $194.2 $207.1 0.1% 4.3%

6. Clark Capital Mgmt. Group - - - - $384.9 $196.6 0.1% 4.1%

7. ING Investment Mgmt. $17.2 $67.5 $156.0 $101.8 $112.6 $125.3 - 2.6%

8. Invesco Aim $221.1 $239.0 $246.1 - $122.7 $123.2 - 2.6%

9. Franklin Templeton Investments $160.3 $164.8 $147.0 $110.0 $100.5 $104.3 - 2.2%

10. UBS Global Asset Mgmt. $57.4 $55.2 $59.0 $54.8 $60.4 $80.4 - 1.7%

Top 10 Total $9,246.2 $7,028.4 $7,727.5 $5,888.6 $4,769.8 $4,670.1 1.4% 97.3%



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International Large Core

1. Thornburg Investment Mgmt. - - - $4,162.4 $5,196.7 $5,454.6 1.8% 60.9%


3. Lord Abbett $22.2 $177.3 $701.1 $577.7 $583.1 $583.1 0.2% 6.5%


5. Invesco Aim $1,294.2 $1,331.9 $1,117.3 - $437.8 $429.3 0.1% 4.8%

6. J.P. Morgan Investment Mgmt. $1,682.9 $1,685.7 $614.0 $383.8 $371.1 $367.4 0.1% 4.1%

7. Eaton Vance $589.0 $489.0 $460.0 $279.5 $229.1 $264.0 0.1% 2.9%

8. BlackRock Financial Mgmt. $102.0 $53.5 $57.6 $49.0 $56.0 $54.0 - 0.6%


10. Legg Mason $42.3 $43.0 $56.4 $31.7 $14.3 $15.8 - 0.2%

Top 10 Total $3,803.7 $5,425.9 $4,475.2 $6,939.6 $8,667.5 $8,956.8 3.0% 100.0%


International Large Growth

1. Invesco Aim $895.2 $1,314.0 $1,901.7 - $3,066.9 $3,355.6 1.1% 86.8%

2. MFS Investment Mgmt. $956.7 $547.4 $419.2 $241.6 $272.6 $278.4 0.1% 7.2%

3. Natixis Global Associates $205.0 $256.0 $278.6 $231.2 $215.2 $205.3 0.1% 5.3%

4. Dreyfus Investments - - $9.0 $16.4 $22.1 $24.4 - 0.6%

5. Old Mutual Asset Mgmt. $213.3 $82.0 $21.1 $22.5 $16.0 - - -

6. AllianceBernstein Investments $4.9 $3.2 $2.3 $0.8 - - - -

7. Henderson Global Investors (NA) $164.5 - - - - - - -

8. Nuveen Investments - $0.7 - - - - - -

9. Turner Investment Partners $2.4 - $6.1 - - - - -

10. Van Kampen Mgmt. $136.0 - - - - - - -

Top 10 Total $2,578.1 $2,203.3 $2,638.0 $512.5 $3,592.8 $3,863.7 1.3% 100.0%

Discipline Total $2,578.1 $2,203.3 $2,638.0 $512.5 $3,592.8 $3,863.7 1.3% 100.0%


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International Large Value

1. Delaware Capital Mgmt. $5,550.9 $4,959.5 $3,826.7 $2,904.1 $3,003.0 $3,114.0 1.1% 31.0%

2. Lazard Asset Mgmt. $4,418.3 $3,491.3 $2,873.0 $2,299.0 $2,510.0 $2,565.0 0.9% 25.5%

3. Brandes Investment Partners $4,698.9 $4,316.0 $3,700.0 $2,418.0 $1,908.6 $1,871.3 0.6% 18.6%

4. Allianz Global Investors $732.0 $947.0 $732.5 $784.1 $1,479.2 $1,660.2 0.6% 16.5%

5. J.P. Morgan Investment Mgmt. $268.1 $486.8 $378.9 $343.9 $393.8 $432.1 0.1% 4.3%

6. Madison Investment Advisors - - - $211.5 $205.2 $215.3 0.1% 2.1%

7. AllianceBernstein Investments $3,407.1 $2,654.0 $1,510.3 $574.7 $95.4 $87.0 - 0.9%

8. Legg Mason $745.8 $731.1 $553.4 $336.2 $102.1 $83.4 - 0.8%

9. Natixis Global Associates $74.0 $101.7 $66.9 $54.5 $29.5 $27.1 - 0.3%

10. Federated Investors - - $0.2 $1.5 $3.1 $5.1 - 0.1%

Top 10 Total $19,895.2 $17,687.4 $13,641.9 $9,927.5 $9,729.9 $10,060.5 3.3% 100.0%


International Other

1. Lazard Asset Mgmt. $380.4 $875.2 $1,653.0 $1,518.0 $1,861.0 $1,989.0 0.7% 41.4%

2. Nuveen Investments $25.6 $9,313.7 $11,518.8 $7,350.7 $2,154.0 $1,713.2 0.6% 35.6%

3. Franklin Templeton Investments $1,205.5 $1,184.9 $994.1 $795.0 $802.6 $707.6 0.2% 14.7%

4. Dreyfus Investments - $580.4 $557.8 $195.6 $309.3 $318.0 0.1% 6.6%

5. Eaton Vance - - $16.5 $30.1 $43.9 $47.0 - 1.0%


7. Ariel Capital Mgmt. - - - $0.5 $5.5 $5.7 - 0.1%

8. MFS Investment Mgmt. - $131.4 - - - - - -

9. AllianceBernstein Investments $162.3 $83.1 $50.1 $20.0 - - - -

10. Thornburg Investment Mgmt. $2,403.0 $3,063.6 $4,473.8 $0.1 - - - -

Top 10 Total $4,202.8 $15,304.1 $19,315.7 $9,966.8 $5,214.3 $4,809.7 1.6% 100.0%



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Large Cap Core

1. J.P. Morgan Investment Mgmt. $2,108.9 $3,522.7 $2,988.7 $2,675.1 $2,481.9 $2,650.5 0.9% 28.8%

2. Nuveen Investments $76.0 $143.0 $324.4 $544.8 $837.8 $1,403.0 0.5% 15.3%

3. Eaton Vance $1,308.9 $986.8 $1,042.1 $916.8 $1,110.2 $1,283.4 0.4% 14.0%

4. BlackRock Financial Mgmt. $1,534.0 $1,985.4 $1,337.0 $1,058.0 $1,033.0 $1,145.0 0.4% 12.5%

5. Legg Mason $1,224.1 $1,391.4 $1,522.3 $1,989.6 $824.0 $1,061.4 0.4% 11.5%

6. Madison Investment Advisors $708.4 $986.0 $927.1 $846.2 $505.4 $584.7 0.2% 6.4%

7. Neuberger Berman - $256.0 $213.0 $270.0 $323.0 $330.0 0.1% 3.6%

8. Thornburg Investment Mgmt. $775.9 $927.0 $1,021.3 $807.1 $306.8 $273.0 0.1% 3.0%

9. ING Investment Mgmt. $167.0 $163.9 $140.0 $108.5 $103.6 $113.1 - 1.2%

10. Clark Capital Mgmt. Group - - - - $129.3 $110.5 - 1.2%

Top 10 Total $7,903.2 $10,362.2 $9,515.9 $9,216.1 $7,655.0 $8,954.6 3.0% 97.4%


Large Cap Growth

1. Dreyfus Investments $182.1 $3,098.2 $3,181.1 $3,645.0 $4,089.9 $4,522.3 1.5% 30.9%


3. Columbia Mgmt. Advisors $8,314.4 $6,147.7 $5,966.1 $1,475.9 $1,632.5 $1,819.9 0.6% 12.4%

4. Delaware Capital Mgmt. $1,132.8 $1,330.5 $1,226.9 $1,061.7 $1,095.0 $1,236.0 0.4% 8.4%

5. Nuveen Investments $1,413.0 $2,515.4 $1,538.3 $1,751.0 $1,813.4 $1,081.1 0.4% 7.4%

6. Jennison Associates $810.8 $985.2 $1,133.0 $1,006.7 $1,177.0 $952.1 0.3% 6.5%

7. Wells Fargo Fund Mgmt. - - $1,769.7 $1,300.2 $869.5 $913.2 0.3% 6.2%

8. Goldman Sachs Asset Mgmt. $1,210.9 $1,472.4 $1,477.7 $676.3 $469.4 $513.7 0.2% 3.5%

9. Eaton Vance $186.2 $379.4 $468.6 $385.9 $383.9 $377.7 0.1% 2.6%


Top 10 Total $13,250.8 $20,344.8 $20,117.7 $14,792.8 $14,642.3 $13,915.5 4.7% 95.0%



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Large Cap Value

1. BlackRock Financial Mgmt. $714.0 $1,002.0 $1,468.0 $2,822.0 $4,112.0 $4,691.0 1.6% 19.5%


3. Davis Advisors $5,819.6 $5,862.9 $4,235.9 $3,673.8 $3,330.3 $3,388.7 1.1% 14.1%

4. J.P. Morgan Investment Mgmt. $152.0 $201.4 $226.0 $318.7 $1,672.4 $2,444.5 0.8% 10.2%

5. MFS Investment Mgmt. $3,271.7 $2,035.1 $2,117.3 $1,910.9 $1,997.5 $2,249.6 0.8% 9.4%

6. Allianz Global Investors $5,070.2 $4,173.5 $2,895.8 $2,621.5 $2,687.9 $1,309.5 0.4% 5.5%

7. Lord Abbett $4,145.2 $3,615.2 $2,442.5 $1,468.9 $1,185.7 $1,235.4 0.4% 5.1%

8. Eaton Vance $2,323.0 $1,949.1 $2,028.4 $1,424.2 $1,159.5 $1,234.6 0.4% 5.1%

9. RNC Genter Capital Mgmt. $117.8 $147.6 $264.3 $568.9 $852.6 $982.6 0.3% 4.1%

10. Delaware Capital Mgmt. $534.6 $466.2 $431.5 $475.6 $448.0 $536.0 0.2% 2.2%

Top 10 Total $27,215.9 $25,055.1 $24,076.6 $21,279.8 $21,455.8 $21,825.6 7.4% 90.9%


Mid Cap Core

1. Invesco Aim $635.3 $901.6 $1,092.7 - $517.4 $352.6 0.1% 29.1%

2. Madison Investment Advisors $396.2 $364.5 $349.4 $348.3 $311.4 $350.4 0.1% 28.9%

3. Principal Global Investors $13.2 - $52.7 $79.4 $228.6 $282.2 0.1% 23.3%

4. Penn Capital Mgmt. - - - - - $206.4 0.1% 17.0%

5. RiverFront Investment Group - $7.0 $8.7 $8.9 $9.3 $10.4 - 0.9%

6. Legg Mason $20.4 $20.0 $19.7 $21.0 $6.8 $7.8 - 0.6%

7. Lazard Asset Mgmt. $9.1 $8.8 $7.0 $0.9 $2.0 $1.0 - 0.1%


9. Robeco Investment Mgmt. $11.1 - $6.7 $2.5 $0.2 $0.2 - -

10. Nuveen Investments $5.3 $4.3 $0.7 - $1.1 - - -

Top 10 Total $1,093.4 $1,316.7 $1,551.0 $466.5 $1,077.9 $1,211.9 0.4% 100.0%



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Mid Cap Growth

1. Wells Fargo Fund Mgmt. - - $402.3 $264.2 $171.4 $195.1 0.1% 35.5%

2. Delaware Capital Mgmt. - - - - $94.0 $111.0 - 20.2%

3. Jennison Associates $0.3 $12.1 $29.4 $43.9 $130.6 $67.5 - 12.3%

4. Principal Global Investors $33.2 - $62.2 $60.9 $61.0 $65.9 - 12.0%


6. Goldman Sachs Asset Mgmt. $138.1 $167.8 $34.3 $21.4 $19.6 $23.4 - 4.3%

7. Chartwell Investment Partners $20.9 $30.5 $32.9 $32.0 $20.0 $21.6 - 3.9%

8. ING Investment Mgmt. - $0.4 - $0.2 $2.0 $2.3 - 0.4%

9. J.P. Morgan Investment Mgmt. $0.1 $0.1 $0.1 $0.1 - - - -

10. Old Mutual Asset Mgmt. - - - - $8.3 - - -

Top 10 Total $258.1 $260.3 $622.1 $472.9 $562.4 $549.0 0.1% 100.0%

Discipline Total $1,100.8 $983.6 $948.3 $580.4 $562.4 $549.0 0.2% 100.0%

Mid Cap Value

1. Nuveen Investments $1,218.8 $1,631.2 $3,043.8 $2,174.4 $1,031.3 $941.9 0.3% 41.4%


3. Goldman Sachs Asset Mgmt. $390.1 $402.7 $357.5 $306.1 $210.4 $239.3 0.1% 10.5%

4. AllianceBernstein Investments $101.4 $106.3 $132.7 $112.8 $108.5 $132.5 - 5.8%

5. Ariel Capital Mgmt. $134.7 $104.7 $89.0 $56.8 $60.6 $69.1 - 3.0%


7. Allianz Global Investors $118.8 $113.0 $32.9 $23.1 $27.3 $30.8 - 1.4%


9. Robeco Investment Mgmt. $0.5 - $26.4 $0.4 $2.8 $3.2 - 0.1%

10. Lord Abbett $145.9 $1.7 $1.6 $1.4 $1.0 $1.1 - -

Top 10 Total $3,101.6 $3,266.3 $4,477.9 $3,395.3 $2,208.0 $2,274.5 0.7% 100.0%



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2. Legg Mason $8,714.9 $8,241.6 $8,395.6 $3,678.7 $3,030.4 $3,219.5 1.1% 17.4%

3. RiverFront Investment Group - - $2,380.9 $2,580.0 $2,870.1 $3,039.8 1.0% 16.4%

4. UBS Global Asset Mgmt. $4,114.7 $3,396.9 $3,100.7 $2,253.1 $2,074.1 $2,189.3 0.7% 11.8%


6. Clark Capital Mgmt. Group - - - - $1,104.6 $989.4 0.3% 5.3%

7. Natixis Global Associates $6,119.1 $0.0 $964.1 $826.3 $817.6 $829.6 0.3% 4.5%

8. RNC Genter Capital Mgmt. - - $263.5 $404.2 $236.8 $233.4 0.1% 1.3%

9. Nuveen Investments $363.0 - - $189.9 $181.9 $193.9 0.1% 1.0%


Top 10 Total $24,250.8 $17,059.2 $21,234.9 $16,406.9 $17,465.1 $18,488.4 6.3% 99.9%


Municipal Balanced


2. Manning & Napier Advisors - $1,736.0 $1,914.6 $1,903.7 $2,081.1 $2,213.4 0.8% 35.3%

3. Legg Mason $73.9 $78.0 $598.0 $638.8 $636.8 $685.9 0.2% 10.9%


5. Clark Capital Mgmt. Group - - - - $143.5 $143.2 - 2.3%

6. Northern Trust Investments $86.9 $84.4 $87.5 $70.7 $68.5 $72.0 - 1.1%

7. Neuberger Berman - $66.0 $1.0 $0.0 - - - -

8. Franklin Templeton Investments $32.5 $23.7 $20.4 $20.2 - - - -

9. Lord Abbett $62.9 $43.8 $24.6 $10.4 - - - -

10. ING Investment Mgmt. - $18.3 $0.5 $0.4 - - - -

Top 10 Total $2,037.6 $3,710.6 $4,593.5 $4,927.6 $5,694.8 $6,265.6 2.1% 100.0%



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3. Eaton Vance $4,007.3 $6,257.3 $7,447.7 $8,281.8 $9,649.9 $9,713.9 3.3% 11.1%

4. Lord Abbett $5,311.8 $6,190.0 $6,184.7 $6,388.5 $7,147.6 $7,218.1 2.4% 8.2%

5. UBS Global Asset Mgmt. $3,640.2 $3,313.4 $3,917.7 $4,591.5 $5,788.5 $6,029.6 2.0% 6.9%

6. Franklin Templeton Investments $4,038.1 $4,418.3 $4,437.9 $4,727.3 $4,656.0 $4,645.8 1.6% 5.3%

7. Legg Mason $3,778.8 $4,146.0 $4,355.9 $4,266.1 $4,499.7 $4,429.4 1.5% 5.1%

8. McDonnell Investment Mgmt. $2,102.9 $2,335.1 $2,648.8 $2,966.9 $3,188.6 $3,175.7 1.1% 3.6%

9. PIMCO - - - $1,696.9 $2,308.2 $2,480.0 0.8% 2.8%


Top 10 Total $47,246.9 $57,419.7 $63,011.1 $72,061.2 $79,917.7 $81,058.3 27.5% 92.6%


Other Specialty Domestic Equity

1. Federated Investors $2,040.7 $1,647.3 $1,810.4 $2,912.6 $3,345.0 $3,846.4 1.3% 58.2%

2. Penn Capital Mgmt. - - - - - $1,026.4 0.3% 15.5%


4. Nuveen Investments $60.0 $0.4 - $354.1 $323.2 $315.6 0.1% 4.8%

5. Eaton Vance $127.5 $131.3 $325.8 $211.3 $453.5 $284.2 0.1% 4.3%

6. Lord Abbett - $3.4 $79.0 $122.7 $118.7 $134.1 - 2.0%

7. AllianceBernstein Investments - - - - $29.3 $112.4 - 1.7%

8. BlackRock Financial Mgmt. $49.0 $63.4 $72.2 $79.0 $85.0 $99.0 - 1.5%

9. Davis Advisors - - - $44.3 $43.2 $46.6 - 0.7%

10. Ariel Capital Mgmt. - - $23.3 $29.6 $30.3 $37.3 - 0.6%

Top 10 Total $2,487.2 $2,200.6 $2,717.5 $4,196.3 $5,005.2 $6,572.0 2.1% 99.5%



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Regional Equity

1. Brandes Investment Partners $48.2 $28.0 $22.0 $17.0 $17.1 $18.0 - 58.1%


3. Delaware Capital Mgmt. $0.1 $0.2 $0.7 $7.5 - - - -

4. Nuveen Investments - $180.7 - - - - - -

Top Firms Total $118.2 $235.8 $43.7 $36.5 $29.1 $31.0 - 100.0%

Discipline Total $118.2 $235.8 $43.7 $36.5 $29.1 $31.0 - 100.0%

Small Cap Core

1. Penn Capital Mgmt. - - - - - $762.1 0.3% 55.5%

2. Eaton Vance $478.9 $414.6 $477.7 $432.8 $419.0 $457.8 0.2% 33.4%


4. Nuveen Investments $465.7 $509.5 $105.8 $40.6 $45.9 $28.6 - 2.1%



7. Clark Capital Mgmt. Group - - - - - $11.7 - 0.9%


9. Columbia Management Advisors $116.0 $130.8 $124.3 $52.8 - $4.9 - 0.4%

10. Delaware Capital Mgmt. $0.1 $0.1 $0.1 $0.2 $0.2 $0.2 - -

Top 10 Total $1,304.0 $1,255.5 $867.8 $631.6 $561.0 $1,372.5 0.4% 100.0%

Discipline Total $2,634.6 $2,078.0 $1,650.7 $709.6 $561.0 $1,372.5 0.5% 100.0%


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Small Cap Growth

1. Franklin Templeton Investments $366.0 $484.5 $632.1 $576.1 $225.3 $207.3 0.1% 92.7%


3. Legg Mason - - - $0.5 $2.0 $3.0 - 1.3%

4. Wells Fargo Fund Mgmt. - - $1.0 $0.4 $0.1 $0.1 - -

5. Columbia Mgmt.Advisors $6.3 $7.6 $7.8 - $4.8 $0.0 - -

6. Chartwell Investment Partners $2.4 $0.7 $1.0 $2.0 - - - -

7. Fred Alger Mgmt. $305.0 $472.4 $612.3 $408.3 - - - -

8. Delaware Capital Mgmt. $66.8 $59.7 $64.1 $69.7 - - - -

9. Dreyfus Investments $7.7 $8.3 $4.2 $1.8 - - - -

10. Old Mutual Asset Mgmt. $42.3 $29.0 $17.9 - - - - -

Top 10 Total $844.8 $1,094.1 $1,367.6 $1,070.7 $244.0 $223.6 0.1% 100.0%

Discipline Total $1,300.6 $1,177.4 $1,435.8 $1,070.7 $244.0 $223.6 0.1% 100.0%

Small Cap Value


2. Neuberger Berman - $213.0 $258.0 $220.0 $228.0 $267.0 0.1% 19.5%

3. Delaware Capital Mgmt. $84.7 $104.6 $119.2 $112.6 $130.0 $145.0 - 10.6%

4. Principal Global Investors $59.8 - $67.6 $24.1 $23.8 $117.1 - 8.6%

5. Legg Mason $90.0 $140.1 $158.0 $133.6 $141.9 $110.4 - 8.1%

6. Allianz Global Investors $440.4 $389.0 $185.0 $152.6 $109.1 $108.7 - 7.9%

7. Nuveen Investments $87.6 $72.3 $150.4 $87.3 $68.3 $74.4 - 5.4%

8. Eaton Vance $104.7 $110.6 $132.7 $65.7 $61.8 $70.4 - 5.1%

9. Ariel Capital Mgmt. $55.9 $71.6 $60.1 $53.5 $44.9 $50.0 - 3.7%


Top 10 Total $1,354.7 $1,514.0 $1,526.5 $1,172.1 $1,133.9 $1,294.6 0.2% 94.6%



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Specialty Domestic Equity, Convertibles

1. Neuberger Berman - - - - - $573.0 0.2% 49.0%

2. Lord Abbett $654.3 $763.7 $725.0 $527.6 $439.7 $454.0 0.2% 38.8%

3. Penn Capital Mgmt. - - - - - $140.0 - 12.0%

4. Pacific Income Advisors - - - $2.0 $5.0 $2.0 - 0.2%

5. Calamos Advisors $1,804.7 $2,077.3 $1,148.9 $728.6 - - - -

6. New York Life Investment Mgmt. - - $665.0 $526.2 $436.5 - - -

7. MFS Investment Mgmt. - - - $3.0 - - - -

8. MainStay Managed Accounts $166.1 $275.7 - - - - - -

9. Victory Capital Mgmt. $170.2 - - - - - - -

Top Firms Total $2,795.3 $3,116.7 $2,538.9 $1,787.4 $881.2 $1,169.0 0.3% 100.0%

Discipline Total $2,795.3 $3,116.7 $2,538.9 $1,787.4 $881.2 $1,169.0 0.4% 100.0%

Specialty Domestic Equity, REIT

1. Pacific Income Advisors - - - - $9,285.0 $9,556.0 3.2% 83.3%

2. Invesco Aim $610.1 $730.8 $976.6 - $973.0 $1,064.6 0.4% 9.3%

3. Principal Global Investors $47.9 - $130.5 $290.3 $466.9 $527.5 0.2% 4.6%


5. ING Investment Mgmt. - $1.2 $9.0 $41.2 $54.7 $60.8 - 0.5%

6. Neuberger Berman - $12.0 $11.0 $11.0 $23.0 $29.0 - 0.3%

7. Davis Advisors $27.4 $18.9 $22.3 $3.1 $5.9 $6.9 - 0.1%

8. Goldman Sachs Asset Mgmt. - - $1.9 $1.6 $2.3 $2.2 - -

9. Delaware Capital Mgmt. $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 - -

10. Old Mutual Asset Mgmt. $212.4 $193.0 $179.1 $179.5 $206.8 - - -

Top 10 Total $1,098.8 $1,152.7 $1,533.3 $726.1 $11,250.8 $11,465.4 3.9% 100.0%



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2. Manning & Napier Advisors - $2,661.0 $2,936.2 $2,956.3 $3,136.5 $3,352.1 1.1% 22.4%


4. AllianceBernstein Investments $1,602.2 $1,558.6 $1,549.5 $1,232.8 $1,210.3 $1,244.0 0.4% 8.3%

5. Legg Mason $4,385.5 $4,272.6 $2,734.3 $944.1 $915.6 $959.0 0.3% 6.4%

6. Allianz Global Investors $1,162.0 $1,185.5 $464.3 $445.9 $497.3 $521.3 0.2% 3.5%


8. Lord Abbett $1,125.5 $989.9 $406.8 $266.6 $248.1 $258.0 0.1% 1.7%

9. Clark Capital Mgmt.Group - - - - $353.0 $238.7 0.1% 1.6%

10. Jennison Associates $180.3 $206.8 $227.1 $186.5 $171.4 $168.7 0.1% 1.1%

Top 10 Total $16,238.1 $18,121.7 $15,825.8 $12,791.2 $13,404.4 $14,361.2 4.9% 96.1%


Taxable Fixed Income


2. PIMCO - - - $9,564.7 $11,020.4 $10,983.1 3.7% 23.7%

3. Madison Investment Advisors $5,669.2 $6,816.1 $5,415.6 $5,493.8 $5,264.7 $4,982.8 1.7% 10.8%

4. Legg Mason $2,037.9 $2,330.6 $2,690.1 $3,608.3 $3,187.5 $3,483.2 1.2% 7.5%

5. Principal Global Investors $295.3 - $1,297.3 $2,745.2 $2,643.7 $2,921.7 1.0% 6.3%

6. ING Investment Mgmt. $1,388.0 $1,597.3 $1,862.0 $1,887.6 $1,609.2 $1,505.3 0.5% 3.3%

7. Delaware Capital Mgmt. - - - $1,606.4 $1,475.0 $1,325.0 0.4% 2.9%

8. McDonnell Investment Mgmt. $797.9 $833.8 $985.1 $1,041.4 $1,190.3 $1,181.9 0.4% 2.6%

9. Nuveen Investments - $393.5 $268.2 $538.7 $961.1 $957.6 0.3% 2.1%

10. Pacific Income Advisors - - $1,807.0 $1,472.0 $1,761.0 $934.0 0.3% 2.0%

Top 10 Total $16,798.2 $19,821.6 $23,395.3 $38,166.1 $40,861.9 $40,381.6 13.7% 87.2%


TOTAL $323,220.8 $322,434.7 $309,085.1 $274,176.2 $287,641.6 $295,075.3 100.0% 100.0%


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EXHIBIT 3.8 Number of SMA Accounts Using Management ReportingSources: Money Management Institute, Dover Financial Research

Period Total Number of SMA Accounts

4Q 2007 885,765

1Q 2008 1,070,277

2Q 2008 1,249,365

3Q 2008 1,229,302

4Q 2008 1,033,457

1Q 2009 968,513

2Q 2009 876,331

3Q 2009 908,706

4Q 2009 802,017

1Q 2010 770,159

2Q 2010 705,577

3Q 2010 660,692

4Q 2010 617,786

1Q 2011 629,901

2Q 2011 623,801

3Q 2011 610,547

4Q 2011 542,707

1Q 2012 527,444

2Q 2012 494,458

3Q 2012 487,768

4Q 2012 474,944

1Q 2013 498,232

Note: 2011 data now reflects Manning & Napier 4Q 2011data, which was submitted earlier this year. SMA asset totalsare based on a subset of investment managers that are members of MMI and report data to Dover.


EXHIBIT 3.9 Top 25 Investment Managers Ranked by Total Model Portfolio AUM ($ millions)Sources: Money Management Institute, Dover Financial Research

Firms 2008 2009 2010 2011 2012 1Q 2013

1. Legg Mason - $438 $1,758 $8,460 $13,308 $15,100

2. Allianz Global Investors - $567 $15,908 $9,419 $8,359 $10,654

3. Neuberger Berman - $3,448 $8,547 $8,062 $8,783 $9,856

4. PIMCO - - - $8,278 $8,212 $8,137

5. BlackRock Financial Management $6,536 $5,822 $5,934 $5,724 $6,530 $6,944

6. Nuveen Investments $44 $1,576 $2,693 $5,024 $5,914 $6,405

7. Columbia Management Advisors - - - - $5,999 $6,399

8. Federated Investors $1,556 $1,394 $1,454 $2,261 $4,530 $5,130

9. Natixis Global Associates $92 $3,982 $4,682 $4,323 $4,343 $4,636

10. Eaton Vance $6,469 $2,614 $4,152 $4,475 $4,106 $4,469

11. J.P. Morgan Investment Management $773 $1,580 $3,206 $3,501 $3,724 $4,188

12. MFS Investment Management - $3,428 $3,710 $3,272 $3,526 $4,066

13. Lazard Asset Management $734 $2,363 $2,559 $2,410 $2,937 $3,930

14. Dreyfus Investments $87 $1,451 $295 $1,785 $2,426 $2,723

15. Invesco Aim $78 $281 $2,294 - $2,114 $2,134

16. Principal Global Investors - - - - $1,606 $1,942

17. Lord Abbett $131 $131 $3,336 $2,916 $1,632 $1,626

18. Delaware Capital Management - $560 $536 $601 $914 $1,197

19. Davis Advisors $30 $64 $1,593 $1,249 $1,035 $947

20. Calamos Advisors - - - - $925 $939

21. Robeco Investment Management $1 - $146 $330 $722 $932

22. Thornburg Investment Management $81 $221 $440 $561 $676 $705

23. Franklin Templeton Investments $516 $554 $705 $619 $481 $528

24. Clark Capital Management Group - - - - $428 $508

25. Madison Investment Advisors $111 $118 $116 $169 $380 $442

Top 25 Managers $17,240 $30,592 $64,062 $73,436 $93,608 $104,535

Note: SMA asset totals are based on a subset of investment managers that are members of MMI and report data to Dover.

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EXHIBIT 3.10 Model Portfolio Assets by Discipline ($ millions)Sources: Money Management Institute, Dover Financial Research

Discipline 2008 2009 2010 2011 2012 1Q 2013

Domestic Equity

Large Cap Value $2,973 $5,825 $14,532 $12,072 $14,282 $18,119

Large Cap Growth $1,162 $5,948 $14,484 $12,998 $17,851 $19,835

Large Cap Core $1,482 $1,635 $2,778 $3,671 $6,155 $6,816

All-Cap Value $19 $301 $965 $2,516 $3,005 $3,328

All-Cap Growth $20 $87 $510 $2,287 $4,738 $6,046

All-Cap Core $1,244 $1,302 $1,717 $1,600 $1,436 $1,536

Mid Cap Value $5 $173 $741 $665 $702 $857

Mid Cap Growth $109 $108 $689 $56 $150 $134

Mid Cap Core $163 $105 $481 $122 $537 $595

Small Cap Value $65 $96 $984 $531 $578 $694

Small Cap Growth $172 $377 $773 $733 $74 $83

Small Cap Core $161 $296 $449 $567 $445 $490

Sub-Total $7,575 $16,253 $39,103 $37,816 $49,951 $58,533


Global Equity $197 $659 $1,398 $1,298 $1,784 $1,322

International Large Core $681 $1,857 $2,907 $2,943 $3,712 $4,148

International Large Growth $191 $1,097 $2,169 $825 $1,908 $2,055

International Large Value $625 $1,856 $4,344 $3,201 $3,577 $4,018

International Other $461 $981 $2,322 $1,738 $1,762 $1,918

Sub-Total $2,155 $6,450 $13,140 $10,005 $12,744 $13,461

Fixed Income

Municipal Fixed Income $205 $476 $849 $1,076 $1,262 $1,321

Taxable Fixed Income $1,294 $1,891 $14,065 $14,477 $16,407 $15,979

Sub-Total $1,499 $2,367 $14,914 $15,553 $17,669 $17,299

Balanced

Municipal Balanced $30 $9 $79 $69 $65 $76

Taxable Balanced $486 $353 $1,756 $1,455 $1,421 $1,641

Sub-Total $516 $362 $1,834 $1,525 $1,486 $1,717

Other

Multiple Discipline Product $8,842 $6,702 $2,678 $9,511 $8,621 $9,240

Specialty Domestic Equity, REIT $10 $51 $391 $244 $366 $470

Specialty Domestic Equity, Convertibles $- $6 $- $222 $190 $9

Other Specialty Domestic Equity $453 $476 $1,875 $2,399 $4,577 $5,220

Sub-Total $9,305 $7,234 $4,944 $12,376 $13,753 $14,939

TOTAL $21,050 $32,666 $73,935 $77,275 $95,603 $105,948

Note: SMA asset totals are based on a subset of investment managers that are members of MMI and report data to Dover.

— —


Year Long-Term Funds

Total Net Equity Hybrid Taxable Municipal Taxable Tax-Exempt NumberAssets Bond Bond Money Money of Funds

Market Market

2001 $6,974.9 $3,396.3 $362.2 $636.1 $295.0 $2,026.2 $259.1 8,305

2002 $6,383.5 $2,645.8 $335.0 $807.5 $330.1 $1,988.8 $276.3 8,243

2003 $7,402.4 $3,654.8 $449.2 $922.1 $336.3 $1,749.7 $290.3 8,125

2004 $8,095.1 $4,344.1 $548.4 $973.1 $328.2 $1,589.3 $312.0 8,040

2005 $8,891.1 $4,886.8 $609.8 $1,028.7 $338.9 $1,690.5 $336.4 7,974

2006 $10,397.9 $5,833.3 $720.7 $1,140.5 $365.0 $1,969.4 $369.0 8,118

2007 $12,001.5 $6,416.8 $807.7 $1,317.3 $374.0 $2,617.7 $468.1 8,026

2008 $9,603.7 $3,640.0 $553.9 $1,239.7 $337.8 $3,338.6 $493.7 8,022

2009 $11,113.0 $4,872.7 $697.6 $1,769.6 $457.2 $2,917.0 $398.9 7,663

2010 $11,831.9 $5,596.2 $807.8 $2,150.5 $473.5 $2,473.9 $330.0 7,555

2011 $11,627.4 $5,215.3 $842.8 $2,381.0 $496.9 $2,399.7 $291.7 7,591

2012 $13,045.2 $5,934.3 $991.0 $2,847.6 $578.9 $2,406.1 $287.4 7,596

2Q 2013 $13,636.9 $6,582.7 $1,095.4 $2,824.1 $551.5 $2,322.6 $260.6 7,613

Note: Data for funds that invest primarily in other mutual funds were excluded from the series.

EXHIBIT 4.1 U.S. Mutual Fund Industry Statistics ($ billions)Source: ICI

Mutual Fund and Exchange-Traded Fund Exhibits

section 4


2001 2002 2003 2005 2006 20072004 2009 2010 2011 2012 2Q 20132008

Total Net Assets Growth

$0

$3,000

$6,000

$9,000

$12,000

–40%

–20%

0%

20%

40%

$4,690

$4,118

$5,362

$6,194$6,864

$8,059

$8,916

$5,771

$7,797

$9,028 $8,936

$10,352$11,054

–12%%

–8%%

–35%%

16%%11%%

17%%

11%%

35%%

–1%%

7%%16%% 16%%

30%%

EXHIBIT 4.2 Long-Term Mutual Fund AUM Growth Statistics ($ billions)Source: ICI

2002 2008 20112001

2003 2004 2005 2006 2007 2009 2010 2012 2Q 2013

–12.2% –8.2%

–35.3%

30.2%

15.5% 10.8%

17.4%

10.6%

35.1%

15.8% 15.8%

–1.0%

6.8%

–40%

–20%

0%

20%

40%

EXHIBIT 4.3 Long-Term Mutual Fund AUM Growth RatesSource: ICI


EXHIBIT 4.4 Net Cash Flows for Mutual Funds ($ millions)Source: ICI

Year Equity Hybrid Taxable Muni MoneyFunds Funds Bond Bond Market

Funds Funds Funds

2001 $32,856 $8,602 $76,324 $11,405 $375,291

2002 ($29,553) $8,443 $125,076 $16,617 ($45,937)

2003 $144,208 $38,451 $40,023 ($6,838) ($263,403)

2004 $172,040 $48,386 $4,774 ($15,349) ($156,713)

2005 $123,976 $36,847 $26,576 $4,687 $62,085

2006 $148,494 $18,375 $45,201 $15,036 $245,236

2007 $74,151 $41,420 $97,577 $10,884 $654,469

2008 ($229,110) ($24,988) $21,306 $7,774 $637,158

2009 ($1,775) $11,606 $310,466 $69,090 ($539,139)

2010 ($23,356) $29,321 $224,325 $11,232 ($524,658)

2011 ($128,312) $29,386 $136,884 ($11,781) ($123,961)

2012 ($153,118) $45,880 $254,006 $49,597 ($336)

2Q 2013 $76,285 $45,074 $42,966 ($9,959) ($115,057)


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2Q 2013

26.2%

33.1%

19.4% 17.5% 18.0% 18.0% 21.7% 20.8%

22.1%

40.7%

27.2%

23.3%

11.0%

0%

10%

20%

30%

40%

50%

EXHIBIT 4.5 Annual Redemption Rate from Stock Mutual FundsSource: ICI


EXHIBIT 4.6 Exchange-Traded Fund Assets and Number of Funds ($ billions)Source: ICI

Year Assets Number of Funds

2001 $83.0 102

2002 $102.1 113

2003 $151.0 119

2004 $227.5 152

2005 $300.8 204

2006 $422.6 359

2007 $608.4 629

2008 $531.3 728

2009 $777.1 797

2010 $992.0 923

2011 $1,048.1 1,134

2012 $1,337.1 1,194

2Q 2013 $1,417.6 1,232

EXHIBIT 4.7 Number of Funds in the U.S. Mutual Fund Industry (Year-end)Source: ICI

Year Total Equity Hybrid Bond MoneyFunds Funds Funds Market

Funds

2001 8,305 4,701 481 2,108 1,015

2002 8,243 4,738 461 2,056 988

2003 8,125 4,592 481 2,079 973

2004 8,040 4,540 478 2,080 942

2005 7,974 4,571 483 2,050 870

2006 8,118 4,750 496 2,025 847

2007 8,026 4,742 478 2,001 805

2008 8,022 4,802 485 1,952 783

2009 7,663 4,598 473 1,888 704

2010 7,555 4,526 477 1,900 652

2011 7,591 4,544 493 1,922 632

2012 7,596 4,514 540 1,962 580



Year Total Equity Hybrid BondFunds Funds Funds

2001 $129,188 $32,856 $8,602 $87,729

2002 $120,583 ($29,553) $8,443 $141,693

2003 $215,843 $144,208 $38,451 $33,185

2004 $209,851 $172,040 $48,386 ($10,575)

2005 $192,086 $123,976 $36,847 $31,264

2006 $227,106 $148,494 $18,375 $60,236

2007 $224,033 $74,151 $41,420 $108,461

2008 ($225,019) ($229,110) ($24,988) $29,079

2009 $389,387 ($1,775) $11,606 $379,555

2010 $241,523 ($23,356) $29,321 $235,558

2011 $26,178 ($128,312) $29,386 $125,104

2012 $196,365 ($153,118) $45,880 $303,603

Note: Net new cash flow is the dollar value of new sales minus redemptions combined with net exchanges. Datafor funds that invest primarily in other mutual funds were excluded from the series. Components may not addto the total because of rounding.

EXHIBIT 4.8 Net New Cash Flow of Long-Term Mutual Funds ($ millions)Source: ICI


Year June 2013 May 2013 YTD June 2013 YTD 2012

Equity Mutual Funds

New Sales $126,830 $138,813 $796,364 $685,048

Redemptions ($128,440) ($133,691) ($725,490) ($707,167)

Exchanges In $19,271 $15,058 $99,452 $102,092

Exchanges Out ($17,718) ($14,838) ($94,041) ($110,848)

Net New Cash Flow ($58) $5,342 $76,285 ($30,875)

Hybrid Mutual Funds

New Sales $21,753 $21,739 $142,892 $110,778

Redemptions ($21,236) ($16,353) ($101,996) ($86,695)

Exchanges In $2,946 $5,653 $19,192 $14,333

Exchanges Out ($2,421) ($4,968) ($15,014) ($11,373)

Net New Cash Flow $1,042 $6,070 $45,074 $27,043

Taxable Bond Mutual Funds

New Sales $84,815 $91,787 $538,172 $494,326

Redemptions ($121,173) ($77,748) ($481,471) ($379,524)

Exchanges In $12,065 $26,671 $71,111 $54,399

Exchanges Out ($19,707) ($27,526) ($84,846) ($44,843)

Net New Cash Flow ($44,000) $13,184 $42,966 $124,359

Municipal Bond Mutual Funds

New Sales $10,690 $12,149 $76,340 $76,621

Redemptions ($22,923) ($12,454) ($80,992) ($51,134)

Exchanges In $2,470 $1,411 $10,260 $9,734

Exchanges Out ($6,708) ($2,094) ($15,567) ($7,349)

Net New Cash Flow ($16,472) ($988) ($9,959) $27,872

EXHIBIT 4.9 Net New Cash Flow of Long-Term Funds ($ millions) Source: ICI

Note: Net new cash flow is the dollar value of new sales minus redemptions combined with net exchanges. Datafor funds that invest primarily in other mutual funds were excluded from the series.


Year Equity Funds

Capital World TotalAppreciation Return

2001 $18,200 ($21,751) $36,407 $8,602

2002 ($35,572) ($3,314) $9,332 $8,443

2003 $67,277 $24,154 $52,777 $38,451

2004 $47,062 $71,336 $53,642 $48,386

2005 $14,073 $106,347 $3,556 $36,847

2006 $7,006 $148,525 ($7,037) $18,375

2007 ($34,679) $139,433 ($30,602) $41,420

2008 ($106,053) ($80,304) ($42,753) ($24,988)

2009 ($6,766) $27,593 ($22,602) $11,606

2010 ($43,702) $57,827 ($37,481) $29,321

2011 ($105,395) $4,155 ($27,072) $29,386

2012 ($136,409) $2,848 ($19,558) $45,880

Note: Net new cash flow is the dollar value of new sales minus redemptions combined with net exchanges. Data for funds that invest primarily in othermutual funds were excluded from the series.

EXHIBIT 4.10 Net New Cash Flow of Long-Term Mutual Funds by Investment Classification ($ millions)Source: ICI

HybridFunds

Year Bond Funds

Corporate High World Government Strategic State NationalYield Income Muni Muni

2001 $9,950 $5,979 ($1,345) $25,821 $35,919 $6,633 $4,772

2002 $9,706 $8,974 ($167) $54,175 $52,388 $5,718 $10,899

2003 $10,354 $23,307 $3,356 ($20,551) $23,557 ($8,062) $1,224

2004 $12,818 ($10,164) $5,458 ($24,347) $21,009 ($8,220) ($7,129)

2005 $5,352 ($16,151) $8,678 ($13,227) $41,924 $910 $3,777

2006 $11,449 ($2,498) $10,727 ($17,342) $42,865 $3,727 $11,309

2007 $9,725 ($2,370) $20,044 ($2,042) $72,220 $3,346 $7,538

2008 ($19,694) $1,498 $5,411 $20,585 $13,506 ($2,278) $10,052

2009 $64,179 $18,118 $22,391 $21,406 $184,372 $6,094 $62,996

2010 $48,635 $4,459 $48,366 $4,714 $118,151 ($2,837) $14,06

2011 $30,713 $11,473 $41,464 $3,711 $49,523 ($9,898) ($1,883)

2012 $43,957 $23,980 $38,370 $33,210 $114,489 $8,528 $41,069


Hot Topic: A Look at the Private Family Market for ExternalChief Investment Officer Services

section 5

Today’s challenging investment markets are prompting many private families and

family offices to look for outside help from a new breed of wealth management firms,

the external chief investment officer (CIO). As a result, assets at external CIO firms

are rising coupled with intensified competition in this nascent marketplace.

The Family Wealth Alliance’s 3rd Annual External CIO Study estimates total

taxable assets of U.S. external CIO firms at $1.7 trillion as of year-end 2012, up

approximately 15 percent from the previous year. Single-family offices account

for roughly half of this amount, with the remainder derived from private clients

investing directly without a family-office entity. A total of 38 firms providing

external CIO services took part in this year’s study, with $389.3 billion in assets

under management and a mean size of $10.2 billion as of year-end 2012.

Total Competitors 250-300

Total Market Taxable Assets $1.7 Trillion

% Change 2011-2012 for Study Participants

Taxable Assets 15%

Family Office/Family Clients 4.5%

Employee Headcount 12.1%

EXHIBIT 5.1 External CIO Market at a GlanceSource: The Family Wealth Alliance, LLC

Note: Taxable assets are estimated. Previous-period asset figuresare not comparable because of the changes in definition of assetsunder management as a result of the Dodd-Frank legislation.


Different types of firms are competing for the external CIO business of families

and family offices. They include investment consultants, managers of managers,

traditional separate account managers and multifamily offices. Most external CIO

providers are relatively small, independent organizations, but some large financial

institutions such as banks and brokerages also compete in this market.

No generally accepted definition has emerged to cover the external CIO function.

But, typically, an external CIO delivers top-level advice and execution, encompass-

ing the client’s entire investment portfolio on an outsourced basis. The trend is

toward providing full investment management discretion, though many external

CIOs operate with partial or no discretion.

EXHIBIT 5.2 Some DefinitionsSource: The Family Wealth Alliance, LLC

External CIO

Firms delivering top-level advice andexecution, encompassing the client’sentire investment portfolio on an outsourced basis. Providers include investment consultants, managers ofmanagers, separate account managersand multifamily offices. Marketplace isevolving rapidly, and different servicemodels are converging. Estimated U.S. assets: $1.7 trillion among 250 to 300 firms.

Single-Family Office

A private business entity establishedby one family to manage its own financial affairs. Privacy, control andcontinuity are the chief motivators for establishing a family office. Many begin inside a family-operatingbusiness, emerging as separate entities after the business is sold. To be exempt from Securities and Exchange Commission registration,family offices must have no nonfamilyclients and no nonfamily ownership.Estimated U.S. assets: $1.2 trillionamong 3,000 to 3,500 family offices.

Multifamily Office

Commercial firms offering compre-hensive, integrated wealth management services delivered in a multigenerational context to multiple family households. They provide an extensive menu of family-office services and have a mean clientrelationship size of about $50 million.Most are registered investment advisors, though one in five is a bank or trust company. Many are in the external CIO business. Estimated U.S. assets: $550 billionamong 180 firms.

The basic services common to virtually all external CIO firms—investment policy

development, asset allocation, portfolio construction and manager selection—derive

from the traditional core offering of investment consultants. However, most firms

provide additional services. Some also function as asset managers, offering pro -

prietary products such as separate account management or collective investment

vehicles such as hedge funds. Others also provide investment planning services such

as liquidity management, tax overlay and the integration of investment management

with financial planning goals.


Demand for external CIO services from private clients, particularly single-family

offices, remains robust. The Family Wealth Alliance estimates that one-third of

single-family offices outsource their chief investment officer function, a number that

has been slowly rising in recent years. Traditionally, many single-family offices have

looked after their own liquid assets in-house by hiring and supervising outside

managers. Several factors, including the growing complexity of investments and

world market turmoil, have begun to work against that practice and in favor of

outsourcing. Challenging markets are prompting many families to question whether

they have the expertise to manage their own investments.

Also, hiring an in-house chief investment officer and related support staff ulti-

mately can be much more expensive and time-consuming than using an outsourced

CIO. Generational factors can also add pressure to outsource, especially when the

younger generation gaining control feels less confident about his/her investment

skills.

Many external CIO providers started business in the institutional world of pen-

sions and endowments where their mandates did not include investment discretion.

However, private family clients increasingly prefer discretionary management, and

most external CIOs now offer it. Among study participants, 58 percent say their

typical client arrangement provides for full investment discretion; 17 percent report

they typically provide partial discretion (likely at the manager level); 14 percent

typically provide no discretion and 11 percent say they make no typical arrange-

ment and will offer whatever the client wants. Multifamily offices are more likely to

want full discretion than other types of discretion offered by external CIO firms.

EXHIBIT 5.3 External CIO RolesSource: The Family Wealth Alliance, LLC

Core Services

The External CIO as Investment Consultant:

1. Investment policy development2. Asset allocation3. Portfolio construction4. Manager selection 5. Performance reporting and analysis

Additional Services

The External CIO as Asset Manager:

1. Manager of managers2. Separate account manager3. Manager of pooled investment vehicles,

e.g. hedge funds

The External CIO as Investment Planner:

1. Liquidity and liability management2. Tax planning and overlay management 3. Integrating investments with planning

strategies


Marketplace awareness continues to pose the top challenge for external CIO firms,

as was the case in the two previous studies. By marketplace awareness, participants

often have in mind both awareness of their own firm and the external CIO service

model itself. The market does not know who they are or what they do. Managing

assets in turbulent markets was again cited as the second greatest challenge in this

year’s study, but it diminished significantly in relative importance to marketplace

awareness (71 on a scale of 100 versus 94) compared with last year. Third was man-

aging client relationships and expectations, followed by technology and reporting.

To stay competitive in the external CIO market, firms are investing heavily in

their service offerings. When participants were asked what they have done recently

to improve services to private families and family offices, they were more likely to cite

reporting and technology changes than any other improvements. Enhanced client

reporting was the top response. A new or improved website portal or other remote

delivery for client information ranked second. Yet, making reporting enhancements

is neither inexpensive nor easy. Study participants ranked technology and reporting

as their fourth-biggest overall business challenge.

58%

14%

17%

11%

Full Investment Discretion

Partial (Usually at Manager Level)

No Discretion

No Typical Arrangement

EXHIBIT 5.4 Investment DiscretionSource: The Family Wealth Alliance, LLC

Question: Which Is Your Typical Arrangement?

Percent of ALL Family/Family-Office Clients for Which You Have Full Discretion 49%

Percent of NEW Family/Family-Office Clients for Which You Have Full Discretion 52%


2013 2012 Relative toRank Rank No. 1

1 1 Marketplace Awareness 100

2 2 Investment Markets, Investment Management 71

3 3 Managing Client Relationships, Expectations 60

4 6 Technology, Reporting 35

5 5 Human Capital 31

6 9 Business Development 23

7 10 Risk Management, Liquidity 23

8 11 Obtaining Scale, Efficiencies 17

9 7 Competition 13

10 8 Regulation, Compliance 8

11 4 Managing Growth 8

12 12 Issues Related to Investment Discretion 6

EXHIBIT 5.5 Top Challenges for External CIO ProvidersSource: The Family Wealth Alliance, LLC

Weighted Relative to Top-Scoring Challenge

Offer Usage

1. Asset Allocation 100% 100%

2. Manager Selection/Evaluation 100% 99%

3. Portfolio Construction 97% 100%

4. Investment Policy Development 97% 94%

5. Portfolio Management for Taxable Clients 89% 87%

6. Investment Consulting for Taxable Clients 86% 86%

7. Financial Planning 87% 77%

8. Portfolio Management for Tax-Exempt Clients 85% 34%

9. Investment Consulting for Institutions/Nonprofits 83% 33%

10. Portfolio Management for Hedge/Funds of Funds 59% 41%

11. Tax Overlay Management 66% 78%

12. Pension Consulting Services 31% —

Note: Investment Policy Development and Financial Planning had a significant offering increase from the 2012study.

EXHIBIT 5.6 Services Your Firm Offers and Percent of Clients that Use ThemSource: The Family Wealth Alliance, LLC


This year’s External CIO Study featured a special focus on client reporting. Firms

have been paying more attention lately to the reports they provide to clients and, in

many cases, clients are not happy with the current reporting. For example, almost

half of the respondents surveyed (46 percent) indicated that they are less than

“highly satisfied” with the quality of their client reporting. A common complaint

involves the routine need for human intervention to input errant data or reconcile

errors. “We want the process to become more automated throughout,” stated a

frustrated external CIO executive.

54%

9%

0%

37% Highly SatisfiedSomewhat Satisfied

Somewhat Dissatisfied Highly Dissatisfied

EXHIBIT 5.7 Satisfaction with Reporting ServicesSource: The Family Wealth Alliance, LLC

Question: How Satisfied Are You with the Client Reporting Services Your Firm Provides?

Shortcomings of Reporting Packages

Reasons Cited for Being Less than Highly Satisfied

• Data Aggregation Function Is Not Scalable

• Spreadsheet-Based Manual System Is Finally Being Phased Out

• We Are Highly Dissatisfied with Service from Outsource Provider

• System Was Internally Built and Is Captive to Internal IT Resources

• Private Investments and Non-Marketables Require Manual Oversight

• We Need More Robust Abilities to Customize Client Reports

• Our Process Needs to Become More Automated Throughout

A fair number (38 percent) of study participants have a list of client-reporting

improvements they want to make but have been unable to do so. The barriers to

upgrading include legacy technology systems that are costly to modernize, the

complexity of some enhancements such as after-tax reporting or partnership

accounting, and the difficulty in finding fully capable outsource technology vendors,

among other things.


The study defined higher-end reporting services to include general ledger

accounting, trust accounting, partnership accounting and financial statement

generation. The rates of offering and client usage were high among the multifamily

offices, less so for other types of firms. For example, most (61 percent) of multi-

family offices offer financial statement generation capabilities while just 24 percent

of other firms do so.

EXHIBIT 5.8 What’s Missing from Your Reporting Package?Source: The Family Wealth Alliance, LLC

Question: Are There Client Reporting Capabilities that Your Firm Would Like to Offer but Has Not Been Able to Do So?

Yes: 38%

Capabilities Your Firm Would Like to Offer

Please Describe Reporting Capabilities that Your FirmWould Like to Offer but Has Not Been Able to Do So

• After-Tax Reporting and Performance Analysis

• Partnership Accounting for Family Investment Entities

• Improved Aggregation to Incorporate All Client Assets

• Online Portal with Full Access to Reporting Functions

• Better Reporting of Hedge Funds and Other Illiquid Assets

• Improved Performance Attribution and Risk Analytics

• Ability to Measure Progress against Planning Goals

Reasons Why Your Firm Can’t Offer Them

Please Describe Reasons Why Your Firm Has Been Unable to Offer Added Capabilities

• Current Web Platform Is Being Upgraded

• Constraints from Legacy Technology System

• Some Accounts Are Not Compatible with Aggregation Feeds

• We Are Evaluating Vendors for a Major Upgrade

• Client Portal Has Been Delayed for Other Priorities

• We Can’t Find a Vendor Capable of Meeting Our Needs

• Technical Complexity Involved with After-Tax Reporting

Multifamily Other Types of Offices External CIO Firms

Offer Usage Offer Usage

1. General Ledger 39% 18% 24% 8%

2. Trust Accounting 33% 31% 18% 5%

3. Partnership Accounting 44% 28% 35% 11%

4. Tax Reporting 67% 64% 29% 12%

5. Financial Statement Generation 61% 35% 24% 6%

EXHIBIT 5.9 High-End Client Reporting ServicesSource: The Family Wealth Alliance, LLC

Question: Do You Offer this Reporting Service and, if so, What Percentage of Clients Use It?


Other pertinent study findings regarding services, competition, fees and report-

ing are detailed in Exhibits 5.10 through 5.14.

Relative to No. 1

1. Enhanced Client Reporting 100

2. Added/Improved Client Portal, Online Remote Access 89

3. More Managers, More Manager Research 67

4. Increased Efficiency, Standardized Service Processes 67

5. New Investment Strategies, Products 53

6. Enhanced Client Communication, Education 44

7. Added Philanthropic Services 44

8. Improved Tax Management Services 38

9. New Planning, Wealth Transfer, Trust Services 33

10. Hired Senior Professionals 22

11. New Risk Control Capabilities, Liquidity Management 22

12. More Client Service Employees 22

EXHIBIT 5.10 Recently Improved ServicesSource: The Family Wealth Alliance, LLC

Weighted Relative to Top-Scoring Response

2013 2012 Relative to No. 1Rank Rank

1 2 J.P. Morgan 100

2 1 Goldman Sachs 88

3 3 Bessemer Trust 63

4 (Tie) 4 Cambridge Associates 50

4 41 SCS Financial 50

5 (Tie) 11 Hall Capital 38

5 — Harris myCFO 38

6 13 Rockefeller Financial 31

7 (Tie) 5 GenSpring Family Offices 25

7 6 Northern Trust 25

7 40 Asset Consulting Group 25

7 15 Greycourt 25

7 14 Hirtle Callaghan 25

EXHIBIT 5.11 Who Are Your Top Three Competitors?Source: The Family Wealth Alliance, LLC

Weighted Relative to Top-Scoring Competitor


2013 Study $277,000

2012 Study $295,000

2011 Study $240,000

Note: Many firms supplement asset-based fees to varying degrees withfixed fees, retainer fees, activity fees or other charges.

Minimum Annual Fees

Question: Does Your Firm Charge a Minimum Annual Fee?

Yes 60%

Average Minimum Fee $122,000

EXHIBIT 5.12 Average Fee on First $50 MillionSource: The Family Wealth Alliance, LLC

Based on Composite Asset-Based Fee Tables for Each Year’s Study

EXHIBIT 5.13 Importance of Reporting to ClientsSource: The Family Wealth Alliance, LLC

Question: How Important Would You Say that Client Reporting Capabilities Are to Your Typical Client?

EXHIBIT 5.14 Change in Client View toward ReportingSource: The Family Wealth Alliance, LLC

Question: Has the Importance of Client Reporting Capabilities to Your Typical Client Increased, Decreased or Stayed the Same in the Last Two Years or So?

83%

0%

17%Somewhat Important

Very Important

Not Very Important andNot Important at All

0% 71%

29%

Increased

Stayed the Same

Decreased

The Family Wealth Alliance is a research and consulting firm

based in Wheaton, Illinois. The Alliance is known as a connector of firms

and families who share its core value, “We Place Families First.”

Founded in 2003, the firm is celebrating its 10th anniversary this year.

Details about The Alliance’s research, consulting and events

can be found on the firm’s website: www.FWAlliance.com.


Managed Investment Solutions Industry Forecast

section 6

2013 to 2014 Industry Forecast Analysis

Each year MMI creates an industry forecast that is based on a survey sent to

sponsor firms. Sponsor firms are asked to provide growth rates for the various

managed solutions segments: SMA advisory, mutual fund advisory, rep as advisor,

rep as portfolio manager and UMA programs. The responses are consolidated

and an aggregate industry forecast is generated. Given the volatility of the financial

markets, MMI asked sponsor firms to provide a short-term forecast for 2013 to 2014

rather than the 3- to 5-year forecast that has been presented in the Guide in past

years. This year’s forecast includes market action of an estimated 5 percent to

6 percent, as most sponsors indicated that they included market action in their

projections.

Sponsor firms were asked to identify the major trends occurring across the advi-

sory industry. Exhibit 6.3 is a summary of the top trends while Exhibit 6.4 provides

an overview of the key factors influencing the growth of each managed solutions

market segment. Finally, sponsors were asked to indicate which areas represented

the greatest and the least opportunity for growth. See Exhibits 6.1 and 6.2.

To put this year’s forecast in perspective, it is important to understand how well

sponsor firms have done with prior year predications. Last year, sponsor firms

predicted ending 2012 managed solutions assets at $2.5 trillion. This is only slightly

below the $2.7 trillion actually realized by the industry. Sponsor firms have been

reasonably accurate, or even slightly cautious, in their outlook for the industry. This

year, sponsor firms forecasted that the managed solutions industry will reach

$3.2 trillion by year-end 2013 and $3.7 trillion by year-end 2014. As of the second

quarter of 2013, managed solutions assets slightly exceeded $3.0 trillion, a milestone

for the industry. Both forecast estimates appear to be within reason, given current

assets levels and growth trends. See Exhibit 6.12.


EXHIBIT 6.1 Managed Solutions Market Segments Representing the Greatest Growth OpportunitySources: Money Management Institute, Dover Financial Research

Question: Please indicate which managed solutions market segments represent the greatest opportunity for growth.Select two.

Key Findings• 55 percent of respondents identified some sort of consolidated advisory platform

as representing the greatest opportunity for growth. This finding validates theongoing trend toward UMA/UMH/platform consolidation, which began in 2005and has been highly touted, especially by the largest broker/dealers.

• Surprisingly, 45 percent of respondents, primarily independent broker/dealers andthird-party service providers, believe that mutual fund advisory programs alsorepresent a significant opportunity for growth. The bullish outlook for these pro-grams is being driven by outsourcing, product proliferation and ease of use.

• In 2005, MMI forecasted that mutual fund advisory programs, due to their simplicity, flexibility and ability to meet the needs of the mass affluent, would remain a core offering even as broker/dealers moved toward more integratedplatforms.

55%

45%

36% 36%

27%

18%

9% 9%

0%

20%

40%

60%

Rep asAdvisor

SMAAdvisory

UMHPrograms

OtherRep asPortfolioManager

UMAPrograms

MutualFund

Advisory

CombinedUMA/UMH


EXHIBIT 6.2 Managed Solutions Market Segments Representing the Least Growth OpportunitySources: Money Management Institute, Dover Financial Research

Question: Please indicate which managed solutions market segment represents the least opportunity for growth. Select two.

Key Findings• A majority of executives (73 percent) chose SMA advisory as the market seg-

ment that represents the least opportunity for growth. This has been a consistenttrend since the 2008 financial crisis and is being driven by a limited product setand lack of flexibility. However, it is interesting to note that dual contract plat-forms have grown substantially over the last several years, posting a one-yeargrowth rate of 39.5 percent and a three-year growth rate of 36.2 percent. See the 3Q 2013 issue of Central.

• Additionally, SMA assets are approaching the high-water mark achieved in 2007.Traditional SMA products will transition to UMA platforms over time. However,pockets of the SMA industry appear to be thriving.

73%

18% 18% 18% 18%

9% 9%

0%

20%

40%

60%

80%

OtherMutualFund

Advisory

UMHPrograms

Rep asPortfolioManager

UMAPrograms

Rep asAdvisor

SMAAdvisory


EXHIBIT 6.3 Advisory Market Key TrendsSources: Money Management Institute, Dover Financial Research

Question: What are the key trends occurring across the advisory market? Please name three.

Key Advisory Trends MMI Commentary

Several executives indicated that platform simplification and con-solidation were among the top three trends within the managed solutions industry. This trend is becoming a reality for the largest firms. In addition, many of the same firms that identified platformconsolidation as a key trend also indicated that there was a secondarytrend toward providing financial advisors with more flexibility andgreater discretion. The success of these “integrated” platforms isclosely linked to providing advisors with the ability (infrastructure) to deliver advisor-directed solutions.

The slow march toward platform consolidationcontinues. Most firms understand the benefits, but only the largest firms, which also distributeSMA products, have made material progress onthis front: Merrill Lynch and Morgan StanleyWealth Management.

Outsourcing on many different levels was also mentioned by severalexecutives. There is a definitive trend among financial advisors to-ward outsourcing discretionary investment management. This trend isoccurring due to the increased complexity associated with underlyinginvestment products and portfolio construction. Also by outsourcingdiscretionary investment management, financial advisors have moretime to spend on maintaining and acquiring client relationships. Thisshift is taking place across all channels but most profoundly in theRIA, IBD and wirehouse channels. Finally, the trend toward outsourc-ing has resulted in the “bullish” outlook for mutual fund advisoryprograms. The 2013–2014 forecast reflects a growth rate that is almost double that of the previous year.

This trend is just beginning to unfold and will havea significant influence over the next several years.

Renewed Interest in Mutual Fund Advisory. Inpart, due to the outsourcing trend, many firms believe that the mutual fund advisory business willgrow faster than other types of advisory programsover the next few years. Sponsors forecasted a 22percent growth rate in AUM for these programs.Other drivers include access to product, ease ofuse and transparency.

Changing customer demographics was highlighted as an ongoingtrend. Firms are focusing on providing investment solutions that cutacross various client segments, including retirees on one end of thespectrum and Gen X and Y on the other end. However, the ability to offer comprehensive retirement income solutions continues to be a challenge and an opportunity for sponsor firms and investmentmanagers.

Platform Consolidation and Discretion

Outsourcing

Demographics


Note: The above responses have been consolidated based on input from sponsor firms.

EXHIBIT 6.3 (Continued) Advisory Market Key TrendsSources: Money Management Institute, Dover Financial Research

Question: What are the key trends occurring across the advisory market? Please name three.

Key Advisory Trends MMI Commentary

There continues to be a trend toward the use of liquid alternative investments. The industry recognizes the benefit of providing “alternative” strategies in a mutual fund or ETF wrapper such aslong/short or market neutral. However, few investment managementfirms have been able to deliver effective liquid alternative strategies.This means that there is a still an opportunity for firms to “get itright.” Financial advisors have also shown a strong interest in liquidalternative investments since these products now make it possible to discuss risk mitigation or alternative sources of fixed income withclients who may not qualify for hedge funds or private real estate investments. This, in turn, strengthens the relationship between financial advisors and investors.

Advisory fees are increasing. Simultaneously, there is a renewed focuson unbundling fees and providing greater transparency to clients.

The increased use of ETF products within advisory solutions is a trendthat has been unfolding over several years. Key drivers include usingETFs in tactical solutions and the trend toward outsourcing. ETFproducts have become increasingly complex, and the use of third-party investment managers simplifies the selection of ETF products.

Liquid Alternatives

Pricing

ETF Usage

The growing importance of the RIA channel, espe-cially dually registered RIAs, is also a key trend.This channel continues to grow as more financialadvisors seek independence but also look to main-tain their ties to broker/dealers. In addition, RIAbusiness models are changing as these firms lookto unbundle services and outsource investmentmanagement. This creates opportunity for firmsthat service the RIA channel in different capacities,not just the custodians.

The Move Toward Independence – The RIA Channel


SMA Advisory – 9% Annual Growth

• The development of new SMA strategies, which represent a departure from traditional equity and fixed income prod-ucts including market-oriented, alternative fixed income solutions and hedge-like strategies, will help drive growth.However, these new products must facilitate model delivery, which simplifies the process. While UMA programs have always leveraged model delivery, traditional SMA platforms have increasingly transitioned to model delivery, as well.

• Financial advisors moving from brokerage firms to the independent RIA model with their own SMA books will facil-itate the growth of SMA assets for firms that support the RIA channel. There is evidence of this trend through thegrowth of dual contract program assets.

• There is a value to delivering high-quality, active management across multiple security types at negotiated rates. In addition, the continued growth of the institutional consulting business, which gen erally recognizes the value of SMA managers, will help to drive growth in the non-retail SMA market.

• The adoption of UMA platforms reduces the reliance on standalone SMA programs and potentially decreases the useof SMA products.

• There are many negatives associated with the traditional SMA business. For example, the move toward model deliv-ery, a limited number of SMA strategies, high minimums, lack of flexibility and the dwindling fixed income SMA busi-ness are often cited as challenges to SMA managers. These challenges have caused investment managers to questionthe long-term viability of the business.

• However, this market, which has been deemed a “dinosaur” for the last several years, continues to grow but mostlythrough dual contract programs. Assets associated with traditional SMA subadvisory programs were up 7.8 percentannually through the first quarter of 2013. This compares with 39 percent for dual contract programs and 17 percentfor mutual fund advisory programs. The SMA business continues to evolve.

Mutual Fund Advisory – 22% Annual Growth

• The greater use of third-party strategists will help grow the total mutual fund advisory pie by creating greater efficiency for financial advisors. Leveraging third-party managers enables advisors to be more productive.

• While independent broker/dealers are optimistic about the growth of mutual fund advisory programs, wirehouses believe that the increased adoption of UMA and rep as portfolio manager programs will put pressure on mutual fundadvisory programs as advisors seek greater flexibility and access to product.

• Continued expansion of investment products and strategies, including liquid alternatives, will make these programsmore attractive.

• Mutual fund advisory programs will benefit as Gen X and Gen Y clients begin to enter the market.

• Mutual fund advisory programs continue to have mass appeal by enabling a client to diversify a portfolio with lowminimum assets. They also afford access to a wide array of products including liquid alternatives, ETFs, etc. Finally,these programs are easily managed and outsourced by financial advisors and offer much-desired transparency.

EXHIBIT 6.4 Growth Drivers and Forecasted Growth RatesSources: Money Management Institute, Dover Financial Research

Question: Name the key drivers to growth (positive or negative) for each program type.


EXHIBIT 6.4 (Continued) Growth Drivers and Forecasted Growth Rates Sources: Money Management Institute, Dover Financial Research

Question: Name the key drivers to growth (positive or negative) for each program type.

Rep as Portfolio Manager – 10% Annual Growth

• The financial advisor must be able to articulate model and investment management capabilities to investors. This requires training and support from the home office. In addition, the home office needs to be able to monitor successand address suitability concerns. Creating an infrastructure that supports and monitors advisors will help promoteasset growth across these programs.

• The move toward greater discretion across the industry combined with increased focus on delivering portfolio per-formance, which is linked to investor goals and expectations, will help drive growth in the rep as portfolio managersegment.

• Some firms are creating rep as portfolio manager programs and offering them to their advisors for the first time. Thisis driven by the trend toward greater discretion.

• Increased complexity associated with portfolio construction, products and client expectations will begin to limit thegrowth of these programs as financial advisors find that they cannot easily scale their businesses.

• The pricing on these programs provides incentives for financial advisors. In addition, financial advisors have discre-tion over the portfolio, which creates value. Better technology and access to research will help grow these programs.

Rep as Advisor – 10% Annual Growth

• The financial advisor must be able to articulate model and investment management capabilities to investors. This requires training and support from the home office. In addition, the home office needs to be able to monitor successand address suitability concerns. Creating an infrastructure that supports and monitors advisors will help promoteasset growth across these programs.

• Greater access to product and the ability to manage a completion account for larger relationships still make this option attractive.

• For independent broker/dealers, rep as advisor programs are core offerings and fundamental to advisory platforms.These programs are here to stay, as they offer advisors easy access and entry into fee-based programs.

UMA – 21% Annual Growth

• The ability to deliver SMAs, stocks, liquid alternative investments and outsourced investment management in one custodial account is becoming a reality. As this occurs across the industry, assets will grow.

• Ease of use, combined with an ever-expanding product set, will provide a superior client experience. Also, increasedmanager comfort with model delivery will expand the SMA options available. These changes will continue to pushassets toward UMA platforms.

Other Comments

• Outsourcing the CIO capabilities is a trend that is occurring across the industry. This trend will create greater indus-try efficiency and result in pockets of asset growth across the advisory industry. This trend also creates an opportu-nity for sponsor firms to enter the OCIO (Outsourcing CIO) business.

Note: The above table summarizes and consolidates the survey responses. In addition, the forecasted growth rates are included for each segment.


EXHIBIT 6.6 Consolidated Forecast Provided by Sponsor Firms ($ billions), 2013 to 2014Sources: Money Management Institute, Dover Financial Research

EXHIBIT 6.5 Forecasted Average Annual Growth Rates (Assets)Sources: Money Management Institute, Dover Financial Research

2012 Forecast 2012 Actual 2014 Forecast

8%

15%13%

16%

22%

15%

35%

10%12%

15%

10%

19%21%

34%

20%

12%14%

9%

0%

10%

20%

30%

40%

SMA Advisory MF Advisory Rep asPortfolio Manager

Rep asAdvisor

UMAProgram

Total Industry

Note: Sponsor firms representing roughly 35 percent of advisory industry assets provided average annual growth rates for all advisory market segmentsvia an MMI proprietary survey. Growth rates include assumptions by sponsors for approximately 5 percent market appreciation. Sponsors were askedto provide the average annual growth rates for advisory business segments from 2013 to 2014. The forecast for all programs with the exception ofmutual fund advisory programs are much lower than the actual growth realized in 2012.

SMA Mutual Fund Rep as Portfolio Rep as UMA Total MSAdvisory Advisory Manager Advisor Program

Period Assets Growth Assets Growth Assets Growth Assets Growth Assets Growth Assets GrowthRate Rate Rate Rate Rate Rate

2006 $715 - $361 - $169 - - - $31 - $1,275 -

2007 $765 7.0% $465 29.0% $230 36.2% $268 - $40 29.3% $1,768 38.6%

2008 $476 –37.8% $348 –25.1% $182 –20.9% $218 –18.7% $45 13.1% $1,269 –28.2%

2009 $518 8.8% $488 40.1% $275 51.5% $334 53.1% $61 36.2% $1,676 32.1%

2010 $557 7.5% $612 25.4% $360 31.0% $459 37.6% $124 101.3% $2,112 26.0%

2011 $551 –1.1% $667 9.0% $404 12.1% $500 8.9% $148 19.7% $2,270 7.5%

2012 $631 14.5% $776 16.3% $544 34.7% $577 15.4% $198 33.8% $2,726 20.1%

2Q 2013 $705 11.7% $855 10.2% $598 9.9% $642 11.3% $223 12.6% $3,023 10.9%

Last Half 2013 Fcst $737 4.5% $949 11.0% $628 5.0% $674 5.0% $246 10.5% $3,234 7.0%

Full Year 2013 Fcst

$737 16.8% $949 22.3% $628 15.4% $674 16.8% $246 24.2% $3,234 18.6%

2014 Fcst $803 9.0% $1,158 22.0% $691 10.0% $742 10.0% $298 21.0% $3,691 14.1%

Note: Forecast based on input from sponsor firms. 50 percent of the annual forecast projections was used for the last half of 2013. Other advisory assets are not included in the forecast.

— — — — ——

— —


EXHIBIT 6.7 SMA Advisory Asset Forecast ($ billions), 2013 to 2014Sources: Money Management Institute, Dover Financial Research

$0

$300

$600

$900

–40%

–20%

0%

20%

2006 2007 2008 2009 2010 2011 2012 2013Forecast

2014Forecast

SMA Advisory Assets Growth Rate

$715$765

$476$518 $557 $551

$631

$737

$803

7.0%%

–37.8%%

10.0%%6.8%%

0.3%%

14.5%%16.8%%

9.0%%

EXHIBIT 6.8 Mutual Fund Advisory Asset Forecast ($ billions), 2013 to 2014Sources: Money Management Institute, Dover Financial Research

$0

$500

$1,000

$1,500

–30%

0%

30%

60%

MF Advisory Assets Growth Rate

$361

$465

$348

$488

$612$667

$776

$949

$1,158

29.0%%

–25.1%%

40.1%%

25.4%%

9.0%%

16.3%%

22.3%% 22.0%%

2006 2007 2008 2009 2010 2011 2012 2013Forecast

2014Forecast

Note: Forecast based on input from sponsor firms. SMA advisory assets include some ETF assets.

Note: Forecast based on input from sponsor firms.


EXHIBIT 6.9 Rep as Portfolio Manager Asset Forecast ($ billions), 2013 to 2014Sources: Money Management Institute, Dover Financial Research

$0

$250

$500

$750

–30%

0%

30%

60%

RPM Assets Growth Rate

$169

$230$182

$275

$360$404

$544

$628

$691

36.2%%

–20.9%%

51.5%%

31.0%%

12.1%%

34.7%%

15.4%%10.0%%

2006 2007 2008 2009 2010 2011 2012 2013Forecast

2014Forecast

EXHIBIT 6.10 Rep as Advisor Asset Forecast ($ billions), 2013 to 2014Sources: Money Management Institute, Dover Financial Research

$0

$200

$400

$600

$800

–20%

0%

20%

40%

60%

RAA Assets Growth Rate

$268

$0

$218

$334

$459$500

$577

$674

$742

0%%

–18.7%%

37.6%%

8.9%%

15.4%% 16.8%%

10.1%%

53.1%%

2006 2007 2008 2009 2010 2011 2012 2013Forecast

2014Forecast




EXHIBIT 6.11 UMA Program Asset Forecast ($ billions), 2013 to 2014Sources: Money Management Institute, Dover Financial Research

$0

$100

$200

$300

$400

0%

30%

60%

90%

120%

UMA Program Assets Growth Rate

$31$40

$45 $61

$124$148

$198

$246

$298

29.3%%

13.1%%

36.2%%

101.3%%

19.7%%

33.8%%

24.2%% 21.1%%

2006 2007 2008 2009 2010 2011 2012 2013Forecast

2014Forecast

EXHIBIT 6.12 Total MS Asset Forecast ($ billions), 2013 to 2014Sources: Money Management Institute, Dover Financial Research

$0

$1,000

$2,000

$3,000

$4,000

–40%

–20%

0%

20%

40%

2006 2007 2008 2009 2010 2011 2012 2013Forecast

2014Forecast

Total MS Advisory Assets Growth Rate

$1,275

$1,768$1,269

$1,676

$2,112

$2,270

$2,726$3,234

$3,691

–28.2%%

32.1%%

26.0%%

7.5%%

20.1%% 18.6%%14.1%%

38.7%%


Note: Forecast based on input from sponsor firms. Growth rates are anticipated to slow as advisory assets movetoward the $4.0 trillion mark by 2015.


EXHIBIT 6.13 Market Share Shifts in AUM from 2007 to 2014 Sources: Money Management Institute, Dover Financial Research

SMA Advisory Mutual Fund Advisory Rep as Portfolio Manager

Rep As Advisor

2007 2010 2011 2012 2013Forecast

2014Forecast

0%

20%

40%

60%

80%

100%

13%

17%

43%

26%

2%

15%22%

6%

26%

29%

18%

24%

22%

7%

29%

20%

23%

21%

7%

28%

19%

23%

21%

8%

29%

19%

22%

20%

8%

31%

UMA Program


EXHIBIT 6.14 Advisory Program Assets Broken Down by Product Type, 2Q 2013Sources: Money Management Institute, Dover Financial Research

Market Segment % % % % % %Long-Term ETFs SMAs Liquid Individual Other

Mutual Funds Alternatives Securities

SMA Advisory 2% 6% 90% 1% 0% 1%

MF Advisory 81% 13% 4% 0% 2%

Rep as Portfolio Manager 53% 18% 0% 5% 19% 5%

Rep as Advisor 54% 17% 0% 5% 21% 3%

UMA Program 31% 20% 44% 2% 1% 2%

Note: The results were derived from the MMI sponsor survey. SMA advisory results were mixed, as some firms reported the holdings within the SMAproduct. All percentages associated with individual securities were reclassified to SMA.

—

—

—

—

—


glossary

Exchange-Traded Fund Advisory Program: A managed account program that utilizesETFs. ETF advisory programs allow for investors to invest in a single account in whichan overlay manager allocates investments across several different ETFs from variousasset classes, investment styles, and risk properties in one total managed solutions account.

Managed Investment Solutions: MMI has broadened its mandate, shifting from a product-oriented organization to a solutions-based one, focusing on Managed Investment Solutions (MS). MS represents the portion of the industry that has organized its delivery of investment solutions through advisory programs and/or platforms. These “managed solutions” normally have the following specific attributes:

• A client profiling and assessment process• A single proposal system• Consolidated performance reporting• Research provided on investments• Rebalancing, tax management and customization• Fee-based pricing

Multi-Discipline Portfolio Program: A separate account only program that housesmultiple investment strategies in a single account. The program allows clients to moreeasily diversify their portfolio via a single account.

Mutual Fund Advisory Program: A mutual fund program that allows investors to allocate their assets across multiple mutual funds. The program includes capabilitiessuch as client profiling, fee-based pricing and rebalancing.

Overlapping Assets: Third-party service providers adjust their assets to account forthe same assets that are being reported by a sponsor or investment manager.

Rep As Advisor Program: A non-discretionary, fee-based, advisory program that enables an investor to hold different types of securities.

Rep As Portfolio Manager Program: A fee-based, managed program that allows thefinancial services rep to act as the portfolio manager. Many of the attributes that define MS apply to these programs.


SMA Advisory: MS programs that utilize separate accounts as the investment vehicle. These programs are single-contract arrangements between the sponsor andinvestor. MS sponsors provide financial advisors with a select list of investment man-ager products to choose from. A single asset-based fee is charged that covers advice,investment management and trading/custody.

SMA Dual Contract: MS programs that utilize separate accounts as the investmentvehicle. These programs are dual-contract because the investor maintains a contractwith both the sponsor and investment manager. These programs are open to essentially any investment manager.

SMA Multi-Discipline Portfolio: MS programs that utilize separate accounts as theinvestment vehicle. These programs offer multiple investment disciplines or sleeveswithin the same separate account mandate. An overlay manager is responsible for coordinating the multiple disciplines from the investment managers. A single asset-based fee is charged that covers advice, investment management, overlay manage-ment and trading/custody.

Traditional SMA Program: A single account that corresponds to a single investmentstrategy. To hold multiple strategies, a client must open multiple accounts. These programs include all the attributes of “managed investment solutions” such as client profiling, fee-based pricing and research. Includes SMA dual contract programs.

Unified Managed Account Platform (UMA): A single account that houses multiple investment products such as SMAs, mutual funds and ETFs. The account leverages a platform that provides the ability to manage an investor’s portfolio in a compre-hensive fashion.

Unified Managed Household Platform (UMH): A UMH is a placeholder that aggre-gates multiple accounts, supports the delivery of multiple products and provides theability to manage an investor’s portfolio in a comprehensive fashion.


MMI Board of Governors

Jennifer Abate, Lazard Asset ManagementJason Ainsworth, Neuberger Berman Lee Beck, J.P. MorganDavid Berkowitz, Lincoln Financial NetworkMichael Bitterly, BlackRock Financial ManagementMarc Brookman, Morgan Stanley Wealth ManagementFrank Campanale, E.F. Hutton & CompanyLee Chertavian, Placemark InvestmentsJohn Coyne, Brinker CapitalJeffrey Cusack, Nuveen InvestmentsChristopher Davis, Money Management InstituteSteve Dunlap, Cetera Financial GroupMarilee Ferone, UBS Financial ServicesWilliam Golden, Legg MasonMark Hancock, Goldman Sachs Asset ManagementCarl Katerndahl, Nuveen InvestmentsKevin Keefe, Advisor GroupDavid Lindenbaum, Charles Schwab & Co.Patty Loepker, Wells Fargo AdvisorsJohn Moninger, Eaton VanceRobert Noelke, Lord Abbett & Co.Daniel O’Lear, Franklin Templeton DistributorsKevin Osborn, EnvestnetVince Pandes, Brandes Investment PartnersRoger Paradiso, Morgan Stanley Wealth ManagementStuart Parker, Prudential InvestmentsMark Pennington, Lord Abbett & Co. Lorna Sabbia, Bank of America Merrill LynchJoseph Schultz, American Century InvestmentsSteve Seifert, Edward JonesMark Spina, ING Investment ManagementEric Sutherland, PIMCOJohn Sweeney, Fidelity InvestmentsWilliam Turchyn, Mariner Investment GroupBurt White, LPL FinancialJeffrey Wilk, MetLifeMatt Witkos, Eaton Vance


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Money Management Institute (MMI) is the leading voice for the global �nancial services organizations that provide advice and professionally-managed solutions to individual and institutional investors. Formed in 1997, MMI helps its member �rms support and advance the growth of advisory solutions through industry advocacy, educational initiatives, regulatory affairs, data reporting, and professional networking.

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