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PortfolioManagement
Group
Portfolio Management Institute
PMG UpdateMarch 23, 2006
Portfolio Management GroupPortfolio Management Group
Some of You Thought We Had Lost Our Heads
Portfolio Management GroupPortfolio Management Group
Some of You Considered Abandoning Ship
Portfolio Management GroupPortfolio Management Group
Some Told Us Our Message Was Confusing
Portfolio Management GroupPortfolio Management Group
In Reality Though, We Were Just Trying to Build a Team!
Portfolio Management GroupPortfolio Management Group
PMG Asset Flows
Net New Asset Growth Net New Assets YTD, 2006 $ 774,100,000 Net New Assets YTD, 2005 $ 704,200,000
Total Asset Growth Total Assets February, 2006 $ 33.5 Billion Total Assets February, 2005 $ 28.7 Billion
Portfolio Management GroupPortfolio Management Group
PMG 2006 Business Overview
$0.00$5,000.00
$10,000.00$15,000.00$20,000.00$25,000.00$30,000.00$35,000.00$40,000.00
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Ass
ets i
n Bi
llion
s
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
Rev
enue
s in
Mill
ions
Assets Revenue
RevenueYTD February '06*
Revenue YTD February '05
Percent Change
Assets YTD '06*
Assets YTD '05
Percent Change
PM $85,213,600 $73,195,800 16.0% $27,665,900 $23,206,500 19.0%GPM $27,209,400 $27,586,900 -1.0% $5,784,000 $5,553,200 4.0%TOTAL: $112,423,000 $100,782,700 12.0% 0 $33,449,900 $28,759,800 16.0%* Incl. ETF's * in millions
Portfolio Management GroupPortfolio Management Group
Key PMG MetricsFebruary 28, 2006
$27.2M$85.2M$112.4MRevenue
$90.8M
$206.7M
1,515
$111,710
2.03%
$5.8B
GPM
$683.3M$774.1MYTD Net Assets Flows (includes contributions & withdrawals)
$1,065.2$1,271.9MYTD New Assets
11,53913,054YTD New Accounts
$270,320$216,981Average Account
1. 37%1.50%ROA
$27.7B$33.5BAssets
PMPMG
Portfolio Management GroupPortfolio Management Group
Building a Business with PMG
FCs in the PMG program gross the full fee for the extra work they do in both gathering and managing the assets.
$30,000,000 $411,000 $615,000
$60,000,000 $822,000 $1,230,000
$80,000,000 $1,096,000 $1,640,000
$20,000,000 $274,000 $410,000
Average AverageAssets PM Fee GPM Fee$5,000,000 $68,500 $102,500
$50,000,000 $685,000 $1,025,000
$70,000,000 $959,000 $1,435,000
$90,000,000 $1,233,000 $1,845,000$100,000,000 $1,370,000 $2,050,000
Average SB ROA
$28,000
$168,000
$336,000
$448,000
$112,000
$280,000
$392,000
$504,000$560,000
Portfolio Management GroupPortfolio Management Group
PMG Top Holdings 2/28/06PM GPM
Portfolio Management GroupPortfolio Management Group
Rep-as-Portfolio Market ShareSource: Cerulli Associates 4th Quarter 2005
Citigroup31%
Merrill Lynch15%UBS
8%
Other 6%
Morgan Stanley17%
Morgan Keegan1%
RBC Dain Rauscher2%
Hilliard Lyons, Inc.1%
Securities America4% LPL
Financial6%
Wachovia11%
* Cerulli Associates, 4Q Summary. Smith Barney was ranked No. 1 out of the top ten firms listed in the industry for the quarter with respect to Discretionary Advisory Programs. This category includes discretionary programs in which financial representatives act as money managers for their clients by taking full responsibility for selecting a portfolio of securities. Rankings are subject to change and some historical figures may be revised due to newly identified programs, firm restatements, etc.
Portfolio Management GroupPortfolio Management Group
Competitive Platforms
Portfolio Management GroupPortfolio Management Group
Changing Asset Allocation Inefficient Use of Time
41.3 hours per 100 clientsTotal Man Hours Per Change
500 minutes(8 hours)
Total Execution Time
X100Assume 100 Clients
5Minutes for SA to execute change
2,000 minutes(33 hours 20 minutes)
Total Communication Time
20 X 100Assume 100 Clients
10Minutes to explain recommendation and obtain buy in
10Minutes to get in touch with client
Portfolio Management GroupPortfolio Management Group
Solving the Time Constraint
With PMG No coordination with managers
With PMG program No calls to clients for approval of the order
With PMG program All accounts traded at the same time using MATES/PM Trade.
41.3 hours becomes 10 15 minutes
Portfolio Management GroupPortfolio Management Group
PM Trade Building Scalability
Authentication Single sign on to Siteminder Secured connection Combined/Converged processes from multi-step to
fewer steps Simplified Actions
Modeling Each account may be assigned a model May be rebalanced versus that model individually or
as a group event May be reassigned as needed Public Models
Research sanctioned May be copied into the PM or GPMers directory
for reuse
Portfolio Management GroupPortfolio Management Group
PM Trade Building Scalability Rebalancing
No longer requires individual account review Allows multiple accounts to be combined in single block
Symbol Links to GEO/Fact Sheets
Alerts PMG level alerts Account specific Intraday
SWAPS Multiple securities allowed As many as 3 on Buy or Sell side
Free-Form Buy and Sell to target in one action- no need for multiple transactions
Portfolio Analytics Combines Sectors/Positions and Asset Allocation
Portfolio Management GroupPortfolio Management Group
PMG Approved Marketing Materials6/1/2004
None
Portfolio Management GroupPortfolio Management Group
PMG Client Approved Marketing Materials1/1/06
1. Prospecting Letters2. Personalized Brochures3. Program Overview Reports4. Online Reports w/Email 5. White Papers w/Letters & Lasergrams6. Quarterly Capital Markets Reports7. Local Advertising & Seminar Invitations8. Presentation Materials9. Seminar Booths10.Publications Directory
Portfolio Management GroupPortfolio Management Group
PMG Prospecting Letters
Start your marketing campaign with PMG client approved prospecting, referral and conversion letters.
SBLinx>Products&Services>GPM/PM>Marketing>ProspectingLetters
Portfolio Management GroupPortfolio Management Group
PMG Personalized BrochuresThis is THE Key To Branding You or Your TeamKey To Branding You or Your Team
PMG Reference Guide 25 PMG designs
Go to: SBLinx>Business Building > Marketing Resources > Customizable Materials > Team Marketing
Portfolio Management GroupPortfolio Management Group
PMG Personalized Brochures
Individual & Team BrochuresTri-Fold Brochures
Personalized brochures allow you to tell your story. They reinforce your brand while differentiating you from your competition.
Brochures are of high-qualitypaper with a professionally designedtemplate
GPM & PMG Versions available
SBLinx>Products&Services>GPM/PM>Marketing>Marketing Brochures
GPM & PMG Personalized Tri-Fold Brochures
Portfolio Management GroupPortfolio Management Group
PMG Personalized Brochures
Individual & Team Brochures8, 12 & 16 Page Brochures
Tell clients and prospects your Mission and Vision
Introduce yourself and your team Inform clients of The Way You Do
Businessand the value of your Wealth Management
Create a brochure that reflects yourvalues and ideas
SBLinx>Products&Services>GPM/PM>Marketing>Marketing Brochures
*Order Brochure Reference Guide via PMEO or view online
Reference GuidePMG2027
Portfolio Management GroupPortfolio Management Group
PMG Program Overviews
SBLinx>Products&Services>GPM/PM/ETF>Marketing>Quicklinks
One-page Online Report Program Overviews relay to clients the power and values of each PMG service
- GPM Overview- PMG Overview- ETF Overview
Color scheme and template design make these reports ideal companions with client presentations
Portfolio Management GroupPortfolio Management Group
PMG Online Reports & Emails
Smith Barney Leads the Pack The Great Dividend Debate The Diversification Dividend A New Look at Risk & Return A Measure of Understanding Return Appearances A Look at Future Returns
Coming Soon Sector Diversification ETFs: What Every Investor Should
Know Behavioral Idiosyncrasies Impact on
Investor Behavior & The Stock MarketOnline Reports at
SBLinx>Product&Services>GPM/PM
>Marketing>PMGOnlineReports
Portfolio Management GroupPortfolio Management Group
PMG White Papers, Letters & Lasergrams Managed Accounts & Mutual Funds
(PMG2021) Elements of Style (PMG2019) Building Portfolios Using Prudent
Investment Strategies (PMG2023) A Measure of Understanding
(PMG2022) Taxes and The Long-Term Investor
(PMG2020)
Client approved Letters and Lasergrams available for each white paperSBLinx>Product&Services>GPM/PM
>Marketing>PMGWhitePapers
Portfolio Management GroupPortfolio Management Group