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Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
Final aepg pitchbook hnw 2013-01-01
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Final aepg pitchbook hnw 2013-01-01

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  • 1. AEPG® Wealth Strategies 25 Independence Blvd“Consistently Good Advice in a Constantly Changing World”® Warren, NJ 07059 908-757-5600 www.aepg.com
  • 2. Agenda  AEPG Wealth Strategies Overview TM  Investment Strategy  Client Service Model  Appendix“Consistently Good Advice in a Constantly Changing World”®
  • 3. AEPG® Wealth Strategies Overview
  • 4. AEPG® Wealth Strategiesoverview and history  Experience: Managing wealth for over three decades as an independent fiduciary and registered investment advisor.  Client commitment: Manage over $750M in Assets, with solid reputation for providing personalized service and comprehensive wealth management for individuals, business owner and corporate clients.  Expertise: Staff of 30 across 5 departments, with expertise in financial planning, investment management, retirement plan solutions, employee benefits and insurance.  Credentials: Team holds highest designations in the field including 8 CFPs, 3 CFAs, and other specialized credentials.  Reputation for excellence: Recognized by peers and industry publications.“Consistently Good Advice in a Constantly Changing World”®
  • 5. Our Philosophy  Our Mission • To provide single-source, goal-oriented, comprehensive wealth management services for high net worth individuals and business owners  Our Vision Mission • To be our clients’ trusted advisor. To continue to be recognized as an industry leader  Our Values • Accountability • Professionalism Core • Trust Vision Values • Outstanding Service • Loyalty • Teamwork • Caring Employer“Consistently Good Advice in a Constantly Changing World”®
  • 6. Our core beliefs  Our clients’ interests come first and foremost  Client success depends upon customized wealth management advice and execution  Emphasis is placed on defining and understanding each client’s needs/objectives at the onset of Peace the relationship of  We communicate with clients proactively Mind  We believe in holistic planning and coordinate with our client’s legal and accounting professionals“Consistently Good Advice in a Constantly Changing World”®
  • 7. What we offer  Discuss financial/personal goals Financial  Cash flow analysis  Customize benefit package to Planning  Retirement planning meet your budget and goals  Education planning  Attract and retain employees Employee Benefits  Investment fiduciary helping reduce or Retirement eliminate liability Plans  Plan design & Operation  Participant education Client’s Financial Plan  Insurance needs analysis  Policy audit Insurance  Asset protection Estate  Wealth transfer Planning  Minimize estate tax burden Invest  Allocation based on financial plan Mgmt  Low correlated assets  Tax efficient portfolios AEPG® Wealth Strategies“Consistently Good Advice in a Constantly Changing World”®
  • 8. AEPG® Wealth Strategies willcoordinate your financial plan Financial CPA Unique combination of Planning Firms independent advice, high level of expertise and personal Employee Elder touch—in a fiduciary wrapper Benefits Care Estate Retirement Planning Plans Attorneys An investment discipline Client’s that strives to optimize Financial return and risk Plan Property & Casualty Insurance firms Wealth management strategies integrated to respond to unique needs of each family Banks Estate Planning Invest Trust Mgmt Services AEPG® Wealth Strategies External partners“Consistently Good Advice in a Constantly Changing World”®
  • 9. How you benefitBetter than expected service AEPG ® Single source for Custom solutions and Objective investment Dedicated team including Lower costs of investmentcomprehensive wealth clarity of safe money management Certified Financial Planner (underlying management management services versus risk-based assets and Chartered fees & transaction costs) Financial Analyst Transparent Web-based daily reporting Tax-efficient investing Ongoing investment Collaboration with investments and personalized online portal rebalancing and risk accountants or other with consolidated view of management advisors to maximize finances impact“Consistently Good Advice in a Constantly Changing World”®
  • 10. Reputation for excellence “ Most Influential Advisors of Defined Contribution ”“ Best Financial Advisors by 401kWire “ Best Financial Advisors for Doctors ” ” for Dentists November 2010 by Medical Economics Magazine November 2010 by Dental Practice Magazine “ April 2011& 2012 “ Top RIA Ranking ” by Financial Advisor Magazine New Jersey Top 401(k) Defined Contribution Providers ” “ June 2010-2012 by NJ Biz Top 100 Retirement September 2010 ” Plan Advisors in 2010 “ by PLANADVISOR January 2011 NJ 2012 Five Star Wealth Manager ” “ Top 50 Wealth Managers ” by NJ Monthly Magazine Feb 2012 “ by AdvisorOne.com Fastest Growing June 2010 Advisory Firms ” by Investment Advisor Magazine “ Top Wealth Management Firms ” 2002 - 2009 “ Top 5 RIA’s in NJ by Reuters” Advice Point by Wealth Manager Magazine “Consistently Good Advice in a Constantly Changing World”®
  • 11. Investment Strategy
  • 12. Disciplined InvestmentPhilosophy Investment portfolios customized to meet each client’s specific goals and needs.“Consistently Good Advice in a Constantly Changing World”®
  • 13. AEPG® Wealth Strategies’ Investment Model makes a clear distinction between risk-basedand lower-risk assets.• Risk-based assets include: a Core portfolio of low-cost equity exchange-traded funds (ETFs) is designed for long-term growth; tracking the global equity markets through the use of indexing; and an Opportunistic ("satellite") portfolio that allows us to invest more tactically, increasing risk-adjusted returns. Each Opportunistic investment has its own entry and exit points and risk management parameters. We monitor the markets for additional opportunities that present an attractive risk reward ratio.• Lower-Risk high quality fixed income serves as the primary safety net in your portfolio. Our experience and research has demonstrated that high quality fixed income, particularly US Treasuries, provide true risk diversification – especially in times of market stress, when diversification is needed most. In addition to high quality fixed income, AEPG® Wealth Strategies offers other fixed income solutions to address client specific needs for yield or tax efficiencies. “Consistently Good Advice in a Constantly Changing World”®
  • 14. Global approach toinvesting Based on and benchmarked to the MSCI All Country World Investable Market Index MSCI All Country World Investable Market“Consistently Good Advice in a Constantly Changing World”®
  • 15. Risk-based portfolioinvestments  AEPG® Wealth Strategies utilizes a core Risk-Based equity/opportunistic structure for investing the risk- based assets in the portfolio. Lower-Risk  The Core portion of the portfolio is designed to offer low cost beta (or market) exposure. Exposure is gained through low cost Exchange Traded Funds (ETFs) and ‘Manager Model Strategies’. Where appropriate the core is also tax-optimized, allowing for capital losses to be realized in the portfolio.  The Opportunistic portion of the portfolio is designed to generate alpha (or excess market return) by allocating to undervalued sectors, asset classes or investment styles.High Quality Core Equity Opportunistic Active management is applied both to manager selectionFixed Income Investments Investments and style/sector allocations.  The ratio of the allocation to core and opportunistic is dependent upon:  Expected after-tax return of the market benchmark Tactical Short  Expected manager after-tax alpha Strategic Long Term Term  Expected opportunistic tracking error  Expected active manager turnover“Consistently Good Advice in a Constantly Changing World”®
  • 16. Lower-risk portfolioinvestments  The AEPG® Wealth Strategies lower-risk portfolio is comprised of high quality fixed income with a Lower-Risk Risk- Based significant allocation to US Treasuries. We continuously monitor the yield curve and interest rates and make adjustments to the portfolio as needed. Additional fixed income related risks are constantly monitored. AEPG® Wealth Strategies manages these risks carefully.  High quality fixed income is considered lower-risk due to its low default risk and ability to appreciate or maintain value during times of market stressHigh Quality Core Equity OpportunisticFixed Income Investments Investments  The lower-risk portfolio can consist of individual bonds, mutual funds and/or ETFs. The duration of the lower-risk model will be carefully managed and the maturity schedule any individual bonds may change at any time. Strategic Long Term Tactical Short  In addition to high quality fixed income, AEPG® Term Wealth Strategies offers other fixed income solutions to address client specific needs for yield or tax efficiencies.“Consistently Good Advice in a Constantly Changing World”®
  • 17. AEPG® Wealth Strategies Portfolioapproach Country Sector ETF ETF Core Portfolio Commodity Regional ETF ETF Lower- Risk Style ETF Cash“Consistently Good Advice in a Constantly Changing World”® 17
  • 18. Client Service Model
  • 19. Wealth management options Depending on your needs, AEPG Wealth Strategies offers two Wealth Management Planning Tracks. • Standard Planning – this track offers a basic initial plan that produces cash flow projections that assist in determining your portfolio allocation, liquidity needs, asset location plan and tax management needs. This basic plan may be updated once a year at your annual investment review meeting. Additional planning items can be addressed on an A La Carte basis. • Comprehensive Planning – this track provides full, deep planning into all areas of your financial life from Retirement planning, Customized Investment Plan, Life, Disability, and Long Term Care Insurance Needs, Education Funding Analysis, a full Estate plan including beneficiary analysis, trusts and much more. You will also have access to your Financial Advisor throughout the year to assist with any financial items that might arise.“Consistently Good Advice in a Constantly Changing World”®
  • 20. Financial plan construction  Step 1 – Data Gathering Meeting  Review of short and long term goals & objectives, current income, living expenses, investments and risk tolerance  Align with hierarchy of financial needs and goals  Open discussion involving both qualitative and quantitative issues  Step 2 – Initial Plan Presentation  Planner and client review preliminary version of the financial plan  Revisions will be noted and plan adjusted accordingly  Step 3 – Final Plan Review  This step involves a number of meetings that will focus on certain areas  Could be 2 to 4 additional meetings depending on the schedule of the client  Step 4 – Implementation  Implement investment proposal and planning recommendations  Step 5 – Annual Review  Review of current plan and changes in circumstances that may require plan revisions“Consistently Good Advice in a Constantly Changing World”®
  • 21. Ongoing communications  Quarterly Review Conference Calls or Meetings  Semi-Annual Financial Plan Updates  Quarterly Investment Newsletters  Town Hall Meetings  E-mail ‚bursts‛ for timely topics  Treasury Debt Ceiling  Opportunistic Portfolio Updates  Money Markets with Exposure to Sovereign Debt  Market Volatility  Year End Financial Planning Tips  Estate Planning Topics  Roth Conversions  Value Added Website“Consistently Good Advice in a Constantly Changing World”®
  • 22. “myWealthStrategies” –Value added websiteSimplify your Financial Life with “myWealthStrategies” Organize all of your important financial information in one place with 24 hour access Safe & secure access to all of your information remotely for peace of mind Your personal website will enable you to view and monitor all of your assets (investment accounts, bank account, 401(k)s, stock options, etc.) and liabilities (credit cards, mortgage, etc.) in one place Budgeting tool Collaboration across your team of financial professionals (Financial Planner, CPA, Attorney, etc.)“Consistently Good Advice in a Constantly Changing World”®
  • 23. Client fees  Our fees for investment management are based upon assets under management:  1.00% for $1 million in assets under management  0.90% for 2nd million in assets under management  0.80% for 3rd million in assets under management  0.70% for amounts over $3 million in assets under management  $500,000 minimum portfolio requirement  Fees may be tax deductible  In addition to fees charged by American Economic, clients are subject to fees charged by various separate account managers (e.g., Adhesion/Atria), mutual funds and Charles Schwab. Note: Mutual funds are purchase at net asset value without sales charges.“Consistently Good Advice in a Constantly Changing World”®
  • 24. Appendix
  • 25. Correlation in “normal”times Zephyr StyleADVISOR Zephyr S tyleA DV IS OR: A merican E conomic P lanning Group Inc. Equals Correlation Matrix: Returns vs. S&P 500 negative or March 1997 - August 2011 zero correlation (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) 1) Dow Wilshire 5000 (full-cap) 1.00 2) Dow Wilshire REIT 0.58 1.00 3) HFRI Fund of Funds Composite Index 0.65 0.32 1.00 4) MSCI EAFE Index 0.86 0.56 0.68 1.00 5) Russell 1000 Growth 0.96 0.44 0.62 0.80 1.00 6) Russell 1000 Value 0.91 0.65 0.51 0.81 0.78 1.00 7) Russell 2000 Growth 0.87 0.51 0.70 0.74 0.84 0.67 1.00 8) Russell 2000 Value 0.83 0.76 0.54 0.73 0.68 0.84 0.83 1.00 Equals negative or 9) S&P GSCI 0.24 0.18 0.42 0.33 0.22 0.21 0.27 0.23 1.00 zero correlation 10) Barclays Capital U.S. Aggregate -0.03 0.12 -0.01 0.01 -0.04 -0.01 -0.09 -0.03 0.02 1.00 11) Barclays Capital U.S. Treasury: Long -0.20 -0.06 -0.17 -0.19 -0.19 -0.17 -0.22 -0.19 -0.07 0.87 1.00 12) Barclays Capital U.S. Treasury: 7-10 Year -0.25 -0.08 -0.23 -0.23 -0.23 -0.21 -0.28 -0.24 -0.07 0.90 0.95 1.00 13) Barclays Capital U.S. Treasury: 1-3 Year -0.31 -0.17 -0.26 -0.29 -0.29 -0.27 -0.34 -0.30 -0.12 0.72 0.63 0.78 1.00 14) Barclays Capital U.S. Corporate High Yield 0.64 0.61 0.55 0.64 0.58 0.59 0.60 0.62 0.24 0.17 -0.13 -0.18 -0.29 1.00 15) Barclays Capital U.S. Treasury: U.S. TIPS 0.02 0.19 0.11 0.08 0.01 0.05 -0.03 0.02 0.26 0.73 0.62 0.66 0.45 0.26 1.00 16) Barclays Capital U.S. Municipal Bond 0.02 0.17 0.11 0.04 0.01 0.03 -0.01 0.03 -0.03 0.67 0.51 0.52 0.34 0.28 0.52 1.00 17) Credit Suisse High Yield Index 0.64 0.61 0.59 0.65 0.59 0.59 0.61 0.63 0.26 0.15 -0.15 -0.20 -0.32 0.99 0.26 0.28 1.00 18) Dow AIG Commodity Index 0.31 0.25 0.46 0.42 0.27 0.31 0.30 0.29 0.91 0.07 -0.05 -0.04 -0.09 0.32 0.30 -0.03 0.33 1.00 19) MSCI EM (EMERGING MARKETS) 0.79 0.48 0.74 0.83 0.74 0.71 0.74 0.67 0.35 -0.05 -0.21 -0.26 -0.33 0.64 0.10 -0.00 0.65 0.45 1.00 20) FTSE RAFI Global ex US 1000 0.83 0.60 0.61 0.97 0.74 0.82 0.68 0.74 0.35 0.01 -0.20 -0.23 -0.27 0.64 0.08 0.07 0.64 0.43 0.80 1.00 21) S&P 500 0.99 0.56 0.59 0.86 0.95 0.93 0.79 0.79 0.22 -0.02 -0.19 -0.23 -0.29 0.61 0.02 0.02 0.61 0.30 0.76 0.83 1.00“Consistently Good Advice in a Constantly Changing World”®
  • 26. Correlations in times ofstress Zephyr StyleADVISOR Zephyr S tyleA DV IS OR: A merican E conomic P lanning Group Inc. Correlation Matrix: Returns vs. S&P 500 July 2008 - December 2008 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) 1) Dow Wilshire 5000 (full-cap) 1.00 2) Dow Wilshire REIT 0.86 1.00 3) HFRI Fund of Funds Composite Index 0.86 0.51 1.00 4) MSCI EAFE Index 0.90 0.74 0.91 1.00 5) Russell 1000 Growth 0.99 0.81 0.91 0.93 1.00 6) Russell 1000 Value 0.99 0.87 0.82 0.88 0.98 1.00 7) Russell 2000 Growth 0.99 0.90 0.81 0.89 0.98 0.98 1.00 8) Russell 2000 Value 0.96 0.94 0.69 0.80 0.93 0.97 0.98 1.00 Equals negative or 9) S&P GSCI 0.84 0.73 0.61 0.64 0.80 0.89 0.79 0.84 1.00 zero correlation 10) Barclays Capital U.S. Aggregate 0.62 0.39 0.81 0.86 0.68 0.61 0.56 0.43 0.47 1.00 11) Barclays Capital U.S. Treasury: Long 0.39 0.17 0.61 0.67 0.44 0.39 0.30 0.19 0.35 0.95 1.00 12) Barclays Capital U.S. Treasury: 7-10 Year 0.34 0.07 0.62 0.63 0.40 0.34 0.25 0.12 0.29 0.93 0.99 1.00 13) Barclays Capital U.S. Treasury: 1-3 Year -0.73 -0.81 -0.41 -0.47 -0.69 -0.72 -0.81 -0.85 -0.53 0.03 0.32 0.37 1.00 14) Barclays Capital U.S. Corporate High Yield 0.95 0.93 0.78 0.92 0.94 0.93 0.96 0.93 0.70 0.64 0.40 0.33 -0.73 1.00 15) Barclays Capital U.S. Treasury: U.S. TIPS 0.88 0.72 0.88 0.98 0.91 0.88 0.84 0.77 0.72 0.91 0.76 0.72 -0.37 0.89 1.00 16) Barclays Capital U.S. Municipal Bond 0.58 0.20 0.88 0.70 0.67 0.51 0.56 0.39 0.19 0.64 0.44 0.48 -0.28 0.54 0.61 1.00 17) Credit Suisse High Yield Index 0.97 0.94 0.78 0.92 0.96 0.96 0.97 0.95 0.76 0.63 0.40 0.33 -0.73 1.00 0.89 0.51 1.00 18) Dow AIG Commodity Index 0.81 0.66 0.78 0.87 0.82 0.83 0.74 0.70 0.81 0.88 0.80 0.75 -0.23 0.78 0.95 0.42 0.81 1.00 19) MSCI EM (EMERGING MARKETS) 0.88 0.76 0.86 0.99 0.90 0.87 0.88 0.80 0.64 0.85 0.67 0.63 -0.47 0.92 0.97 0.63 0.91 0.86 1.00 20) FTSE RAFI Global ex US 1000 0.93 0.76 0.91 1.00 0.95 0.91 0.91 0.83 0.70 0.84 0.65 0.62 -0.50 0.93 0.98 0.67 0.93 0.88 0.99 1.00 21) S&P 500 1.00 0.84 0.87 0.90 0.99 1.00 0.98 0.95 0.86 0.63 0.40 0.36 -0.71 0.93 0.89 0.58 0.95 0.82 0.88 0.92 1.00“Consistently Good Advice in a Constantly Changing World”®
  • 27. Appendix  Case Studies  Retirement  Tax  Investment Descriptions  ETFs  Manager Model Strategies  Mutual Funds  Adhesion Unified Managed Account“Consistently Good Advice in a Constantly Changing World”®
  • 28. Case study: RetirementRetirement scenarios  Required Return: 5% Retirement Age Return Infl Exp Stl MC 65 5 3 175k 90/87 16 65 6 3 175 98/95 24 65 0 3 175 77/74 <5% 65 5 3 150 96/93 30% 68 5 3 175 92/89 21%“Consistently Good Advice in a Constantly Changing World”®
  • 29. Case study: retirement (Cont’d)Fact pattern  Age: 55, married 2 children  Occupation: Corporate Executive  Household Income: $300K  Expenses: $170K (excluding taxes)  Goals  Retire at age 65 sustaining the same lifestyle throughout retirement  Estate Planning  Education Planning  Process  Determine Risk Tolerance  Cash Flow Projections  Probability of Success: Monte Carlo Simulation  Retirement Scenarios“Consistently Good Advice in a Constantly Changing World”®
  • 30. Case study: retirement (Cont’d)C/F projections  Total Capital Projection $4,500,000 Ret Plan $4,000,000 Invest $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 62 66 70 74 78 82 86 90 94 98 102 103“Consistently Good Advice in a Constantly Changing World”®
  • 31. Case study: retirement (Cont’d)Probability of success  Monte Carlo Projections 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 -5,000,000 -10,000,000 16% probability of success retiring -15,000,000 at 65 living same lifestyle & 2% real -20,000,000 rate of return -25,000,000 -30,000,000“Consistently Good Advice in a Constantly Changing World”®
  • 32. Case study: retirement (Cont’d)Risk tolerance – behavioral/qualitative component  When faced with a major financial decision you are usually, more concerned about the possible losses Expected Return and Risk Low Medium High 30% 30% 40% Portfolio 1 Portfolio 2 Portfolio 3 Portfolio 4 Portfolio 5 Portfolio 6 Portfolio 7 It is somewhat more important that the value of your investments does not fall (than that it retains its purchasing power). Over ten years you would expect average earnings of about three times the rate from certificates of deposit. The total value of all your investments could go down by 33% before you would begin to feel uncomfortable. With these portfolio choices, you would choose Portfolio 4.“Consistently Good Advice in a Constantly Changing World”®
  • 33. Case study: retirement (Cont’d)End result  Required Return: 5%  Risk Tol – mod plus  Allocation 70/30  UST  Core  Opp“Consistently Good Advice in a Constantly Changing World”®
  • 34. Case study: TaxesAEPG can help clients save on taxes Option1: New Comparability Profit Sharing Plan As of December 31, 2010 Testing Profit Sharing Plan Total Employer Defined Name Age Compensation Allocation Contribution Allocation Doctor 60 245,000.00 $49,000.00 90.32% Assistant 40 45,000.00 $2,250.00 4.15% Bookkeeper 45 60,000.00 $3,000.00 5.53% TOTAL NHCEs 2 $105,000.00 $5,250.00 9.68% Option 2: Triple Decker - Cash Balance / New Comparability Plan / Safe Harbor 401(k) as of December 31, 2009 Testing Profit Sharing Plan Total Employer Defined Name Age Compensation Allocation Contribution Allocation Assistant 40 45,000.00 $4,200.00 1.79% Bookkeeper 45 60,000.00 $5,400.00 2.30% TOTAL NHCEs $105,000.00 $9,600.00 4.08%Option 1 reflects a Profit Sharing Plan costing the Doctor $5,250 for 2 staff in order to save $49,000.Option 2, the Triple Decker plan design (inclusive of Cash Balance, New Comparability and Safe Harbor 401(K)) reflects a cost of $9,600 for 2 staff in order to save$225,675. Therefore, the Doctor in this example could save an additional $176,675 for an additional cost of only $4,350.“Consistently Good Advice in a Constantly Changing World”®
  • 35. Exchange traded funds (ETF)  ETFs are open-ended funds that trade on registered national security exchanges similar to stocks.  While mutual funds are bought and sold based on end of day pricing, ETFs trade at different prices throughout the course of the day.  Most ETFs seek to track the performance of an index by holding all or a representative portion of the underlying index.  ETFs can track equity, fixed income, commodity or other indices.  ETFs generally entail lower fee structures and are more tax efficient than mutual funds.  Unlike mutual funds, ETFs do not subject you to taxable events due to other investors selling shares in the fund.  More recently, actively managed ETFs are being created where investors are able to receive the benefits of a tax efficient ETF while in turn receiving the benefits of active management.“Consistently Good Advice in a Constantly Changing World”®
  • 36. Manager Model Studies  Manager Model Strategies are investment portfolios of stocks, bonds or other securities that can be customized on an individualized basis.  Manager Model Strategies offer full, real-time transparency of all underlying securities and trades since the investor owns the actual securities (as opposed to owning shares of a mutual fund).  Manager Model Strategies offer high degrees of tax efficiency. Since cost basis is known for each security, tax harvesting can be done on a continuous basis. Also, since the investor owns the individual securities, you are not subject to taxable events by other investors selling as you would with a mutual fund.  Unlike mutual funds, Manager Model Strategies allow investors to customize portfolios by including preferences and/or restrictions on the purchases of specific securities. This is especially helpful for those who hold company stock from their employer and do not wish to hold an additional position in the company.“Consistently Good Advice in a Constantly Changing World”®
  • 37. Manager Model Strategies vs.Mutual Funds Manager Model Strategies Mutual Funds Own shares of a pool of securities along with Ownership Sole ownership of underlying securities other investors Daily transparency of all underlying Holdings available on a quarterly basis with Transparency securities a lag Ability to harvest tax losses continuously No ability to harvest losses without selling Harvesting throughout the year shares Ability to customize holdings on a security No customization available on a security or Customization and industry level industry level Daily liquidity with funds available after Daily liquidity with funds available after Liquidity T+3 settlement T+1 settlement Minimum investment $100K and up As low as $100“Consistently Good Advice in a Constantly Changing World”®
  • 38. Adhesion Unified ManagedAccount  Adhesion will provide overlay management of your investments, streamlining the day to day management of your accounts.  By utilizing Adhesion, AEPG can substantially increase the benefits to you, specifically in the areas of:  Tax optimization  Continuous tax harvesting  Rebalancing benefits  Continuous monitoring of investments and the ability to maintain your asset allocation at all times within the acceptable allocation threshold.  Accessibility of managers  Adhesion offers the ability to access managers that would otherwise be out of reach due to account minimums.  Lower manager expenses  Separately managed account expense ratios will be reduced due to Adhesion’s economies of scale.  Net savings vs. current structure  Greater after tax-returns  Additional capital losses to be used to offset capital gains  Lower net portfolio expenses“Consistently Good Advice in a Constantly Changing World”®
  • 39. Adhesion Unified ManagedAccount  Adhesion will act as the “Overlay Manager” and will provide rebalancing and active tax management, in Rebalancing addition to an improved web-based reporting platform.  AEPG will continue to act as the “Wealth Manager” Security Security and will be responsible for asset allocation and Timing Selection manager selection.  The “Money Managers” selected by AEPG will be Asset responsible for individual security selection and the Allocation timing of such investments. Active Tax Management Overlay Manager Money Manager Wealth Manager“Consistently Good Advice in a Constantly Changing World”®
  • 40. Next Steps
  • 41. Disclosures“Consistently Good Advice in a Constantly Changing World”®

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