Presentation originally made in conjunction with LV considering benefits of using Discretionary Fund Manager, particularly for SIPPs, as well as looking at current market views as at Oct 2011.

1. Made for You
Charles Stanley
Bespoke DFM
Presented by
Richard Missen Chartered FCSI In 1750 James Swaine bought a whip-
making business in Piccadilly, and a
Charlotte Lambeth Chartered FCSI Royal Appointment to King George III
quickly followed. Over the next century
the reputation and product range
Chris Harris-Deans Chartered FCSI expanded and Swaine found himself
providing bags and umbrellas to the
aristocracy of the day. Today the
company still uses time-honoured
crafting processes for producing fine
attaché cases and leather bags. At
October 2011 Charles Stanley we admire this
considered way of doing business.

2. Agenda
 Benefits of a Discretionary Fund Manager
 About Charles Stanley
 Charles Stanley SIPP Investment Process
 Portfolio Construction
 Asset classes and current thoughts
 Keeping in touch
 How we can help you
 Why choose Charles Stanley
 Q&A
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3. Benefits of a Discretionary Fund Manager
 Mitigation of investment and business risks
 Access to the person managing your client’s portfolio
 Regular strategy and performance reviews
 Greater accountability
 Charles Stanley to take responsibility for investment advice to
complement the pension advice you provide
 Tailor-made portfolio
 Clear understanding of the client’s requirements
 Risk level and benchmarks discussed and agreed to complement a
client’s long term pension objectives

4. Benefits of a Discretionary Fund Manager
 Adapt investment strategy to changing pension requirements
 Portfolios can be designed to meet a drawdown target
 Wide choice of investments
 Ethical Screening available
 Bespoke administration
 Competitive and transparent fee structure
 Continuity of investment manager
 Local contact with client and advisors whenever required

5. Corporate Profile
 Established 1792
 Members of the London Stock Exchange
 One of the leading independently-owned stockbrokers in the UK
 £15.04bn of client funds under management and administration*
*as at 30th June 2011
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6. Our office network
Bath Liverpool
Bedford London
Beverley Manchester
Birmingham Milton Keynes
Bournemouth Newbury
Brighton & Hove Norwich
Bristol Nottingham
Cambridge Oxford
Cirencester Plymouth
Dorchester Reading
Eastbourne Southampton
Edinburgh Southend-on-Sea
Exeter Tunbridge Wells
Guildford Truro
Ipswich Watford
Isle of Wight Wimborne
Leeds
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7. Charles Stanley Exeter
 23 staff
 6 Investment teams
 More than 200 years of investment experience
 Investment Managers are CISI Chartered Fellows
 Support the local community
 www.charles-stanley.co.uk/exeter
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8. Previous thinking - managing a SIPP through its
natural life cycle is no longer suitable
Before retirement
STAGE 1
total return
Lead up to retirement
Allocation includes Pensions regime post
STAGE 2
25% cash ‘A Day’ Regime post 6/4/11
Retirement Drawdown
STAGE 3 6/4/2006 Unsecured income
income drawdown Pension
Lead up to Flexible
STAGE 4 Alternatively
annuity purchase Drawdown [MIR]
secured income
STAGE 5 Annuity purchase

9. Our approach to managing your investments
Gain a clear understanding of client’s requirements,
Step one
attitude to risk, and any ethical requirements
Understanding your needs
Agree on the investment objectives
Step two
and time horizon
Agree clear objectives
Agree strategic asset allocation tailored to the longer
Step three
Sound planning
term requirements of the portfolio. We will also agree
a benchmark to monitor our performance
Within risk parameters agreed with the client &
Step four
advisor, tactically over or underweight asset classes,
Add value
sectors or securities
Regularly monitor, review and
Step five
adapt the portfolio
Monitoring and optimising
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10. Research
An overview
Investment Strategy
Proprietary Committee External
research research
Portfolio
Management Team
Tailored portfolio
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11. Asset Classes & Current Thoughts
Asset Class Reason
Fixed Interest These assets reduce volatility and are a safe
haven in times of risk aversion.
Equities To provide an opportunity for the capital
value of the portfolio to grow above the
inflation rate. This asset class should also
provide an income flow that keeps pace with
inflation.
Alternative Assets To provide further opportunity for capital
growth, uncorrelated to the stock market.
Cash To provide a hedge against poor markets
and to provide liquidity for potential
investment opportunities.
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12. Investment opportunities
Fixed Interest
 Announced QE2 measures in UK
 Interest rates maintained at 0.5%
 Gilts viewed as high quality – long maturity profile/coalition spending
reductions
 Inflation, presumed set to ease
 European Sovereign debt crisis
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13. Investment opportunities
UK Equity
 FTSE 100 70% earnings overseas
 Strong balance sheets
 Modest valuation
 Good dividend growth prospects
 Increasing emerging market attractions
 Takeover potential
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14. Investment opportunities
Overseas Equities
 Diversification of industry exposure
 Currency appreciation
 US market – risk aversion
 Far East / emerging markets, growth drivers
 Japan – very undervalued
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15. Investment opportunities
Alternative Assets
 Commercial Property – quality income
 Hedge Funds – complex structures
 Structured Products – counterparty risk
 Absolute Return Funds – positive returns through all market conditions?
 Commodities – profit taking
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16. Keeping In Touch
 Tailored administration
 Half-yearly reviews and valuations
 Regular meetings – frequency dictated by client & advisor
 Immediate notification of portfolio events (if required)
 Online portfolio access for both client and advisor
 Valuations, statements and company research
 Potential to link with your back office software
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17. How we can help you
 Review existing portfolios
 Investment proposals for potential new clients
 Stock specific comments
 Market related comments
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18. Investment seminar
 We will be hosting a more detailed investment seminar in January
 Let us know if you would like an invitation
 Speak to your usual contact if you would like more details sooner
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19. Why choose Charles Stanley
 Dedicated investment manager supported by an experienced team
 Company ownership
 Truly bespoke portfolio management
 Quality and depth of research
 Award winning
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20. Questions & Answers
• Contact details:
Charles Stanley
Broadwalk House
Southernhay West
Exeter EX1 1TS
01392 453600
www.charles-stanley.co.uk/exeter
richard.missen@charles-stanley.co.uk
charlotte.lambeth@charles-stanley.co.uk
chris.harris-deans@charles-stanley.co.uk
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21. Important information
The information given in this presentation is based upon sources we believe to be reliable, but its
accuracy cannot be guaranteed. The information does not constitute advice or a personal
recommendation and you are recommended to seek advice concerning suitability from your investment
advisor. Charles Stanley & Co. Limited and connected companies, their directors, members, employees
and members of their families may have positions in the securities mentioned. Tax reliefs are those
currently applying and the levels and bases of taxation can change. Investors should be aware that past
performance is not necessarily a guide to the future and that the price of shares, and the income derived
from them, may fall as well as rise and the amount realised may be less than their original sum.
Charles Stanley & Co. Limited is authorised and regulated by the Financial Services Authority.
Registered office 25 Luke St London EC2A 4AR. Registered in England number 1903304.
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22. Appendices
Investment Management is Evolving
2000 – 2003
1950s 1970s Alternative assets grow in
Predominantly bonds Balanced portfolio of bonds popularity because of
(equities seen as too risky) and equities diversification advantages and
focus on absolute returns
1980- 2000- Post
1950s 1960s 1970s
2000 2003 2003
Post 2003
1960s 1980-2000 Alternative assets used
Equities of more Culture of equities for consistent, long-
interest as inflation (revival through Thatcher run returns. New ways
rises era) of implementing
investment ideas
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23. Appendices
Performance of Asset Classes 16/5/11
4000
3500
3000
2500
2000
1500
1000
500
0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
FT S E A LL S HA RE - P RICE INDE X FT S E B RIT .GOV T .FIX E D A LL S T OCK S - P RICE IND
UK HA LIFA X HOUS E P RICE INDE X - A LL HOUS E S NA DJ
UK % P E R A NNUM 3 MONT H S T E RLING LIB OR & INT .DIFF.UK & J A P A N C
Source: Thomson Reuters Datastream
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24. Appendices
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25. Appendices
Real Long Term Returns
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26. Appendices
Correlation Coefficients
Correlation Coefficient
Commercial Property
May 2004-Aug 2009
Government Bonds
Emerging Markets
Corporate Bonds
Private Equity
Hedge Funds
Commodities
Equities
Cash
Corporate Bonds 0.90 0.87 0.73 0.57 0.44 -0.07 -0.36 -0.84
Hedge Funds 0.90 0.91 0.88 0.96 0.92 -0.82 0.86 -0.83
Emerging Markets 0.91 0.93 0.88 0.96 0.94 -0.89 0.96 -0.94
Cash 0.73 0.88 0.90 0.83 0.67 -0.58 0.25 -0.43
Private Equity 0.57 0.96 0.95 0.83 0.95 -0.58 0.53 -0.07
Equities 0.44 0.92 0.90 0.67 0.95 -0.51 0.61 0.11
Government Bonds -0.07 -0.82 -0.85 -0.58 -0.58 -0.51 -0.58 -0.07
Commodities -0.36 0.86 0.91 0.25 0.53 0.61 -0.58 0.66
Commercial Property -0.83 -0.84 -0.88 -0.33 0.02 0.18 -0.11 0.69
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27. Appendices
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28. Appendices
FTSE All-share over Q3 2011 FTSE All-share over past 3 weeks
Source: Thomson Reuters Datastream
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29. Appendices
Source: Thomson Reuters Datastream
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30. Appendices
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31. Appendices
Gilt Yield vs FTSE yield P/E of FTSE
Source: Thomson Reuters Datastream
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32. Appendices
Source: Reuters Trader, 11/10/11
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