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Pag Alliance Powerpoint

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Pag Alliance Powerpoint

  1. 1. Professional Alliance Group Leverage. Opportunity. Efficiency. Teamwork. Growth .
  2. 2. <ul><li>Program Overview </li></ul><ul><li>and Highlights </li></ul>
  3. 3. What is a Professional Alliance? <ul><li>A Professional Alliance is a mutually beneficial, formalized advisory </li></ul><ul><li>referral relationship that is formed between you and Morgan Stanley Smith Barney. </li></ul><ul><li>Forming a Professional Alliance can help enhance your business model both professionally and financially by strengthening your: </li></ul><ul><li>Value Proposition: Forming a professional alliance with Morgan Stanley Smith Barney readily enables you to refer your clients to Morgan Stanly Smith Barney for investment management services. </li></ul><ul><li>Competitive Advantage: By aligning yourself with an industry leader in wealth management you are able to easily give your clients access to the breadth and depth of products, services and intellectual capital available at Morgan Stanley Smith Barney. </li></ul><ul><li>Revenue Source: A professional alliance can create an additional source of revenue for your firm. In exchange for new client referrals, you generally will receive ongoing compensation for referred clients that maintain fee-based accounts with Morgan Stanley Smith Barney. </li></ul>
  4. 4. Overview of the Professional Alliance Group <ul><li>Registration Requirements </li></ul><ul><ul><li>Most states require you to register your firm as a Registered Investment Advisor (RIA) and any member of the firm providing referrals as an Investment Advisor Representative (IAR). </li></ul></ul><ul><li>Referral Fee Payments </li></ul><ul><ul><li>Referral fees generally will be paid on new referred clients that maintain fee-based accounts. </li></ul></ul><ul><ul><li>Referral fees generally are ongoing (for so long as the referred client remains a client of Morgan Stanley Smith Barney and maintains a fee-based account(s)). </li></ul></ul><ul><li>Transparency and Objectivity </li></ul><ul><ul><li>Referred clients do not incur an additional fee as a result of the professional alliance arrangement. </li></ul></ul><ul><ul><li>The professional alliance (referral fee) arrangement is fully disclosed to the referred client. </li></ul></ul><ul><ul><li>The professional alliance arrangement is non-exclusive and preserves your objectivity by allowing you to refer clients to the financial services firm that you feel best meets your clients’ needs. </li></ul></ul>
  5. 5. Understanding the Referral Fee <ul><li>The client is not charged additional fees as a result of the professional alliance arrangement. </li></ul><ul><li>The referral fee is fully disclosed to the client via a client disclosure document. </li></ul><ul><li>The referral fee is earned by: </li></ul><ul><ul><ul><li>fulfilling any applicable state regulatory and registration requirements </li></ul></ul></ul><ul><ul><ul><li>familiarizing yourself with Morgan Stanley Smith Barney’s capabilities </li></ul></ul></ul><ul><ul><ul><li>knowing the financial situation and needs of your client so that a referral of such client to Morgan Stanley Smith Barney is appropriate </li></ul></ul></ul>
  6. 6. Benefit to Center of Influence <ul><li>Expanded Value Proposition: Provides you the ability to address your clients’ financial needs without significant capital outlay or compromise of independence. </li></ul><ul><li>Deepen Client Relationship: Allows you to introduce your clients to the breadth and depth of financial services offered at Morgan Stanley Smith Barney. </li></ul><ul><li>Business Growth: Engaging in a professional alliance arrangement can provide your firm an ongoing revenue stream . </li></ul><ul><li>Flexibility: Professional alliance arrangements are non-exclusive arrangements which allow you to refer your clients to the most appropriate financial services firm to meet their specific financial needs. </li></ul>
  7. 7. Registration Requirements <ul><li>In order to participate in a professional alliance arrangement, you must be allowed to </li></ul><ul><li>enter into referral arrangements by the state law rules governing your profession. </li></ul><ul><li>These rules vary from state to state. Registration is based on the state law where your </li></ul><ul><li>firm is located and, if different, the state(s) law where the referred client resides. </li></ul><ul><li>Most states require you to register your firm as a RIA and any member of the firm </li></ul><ul><li>providing referrals as an IAR. If you practice (or any referred clients) resides in such a </li></ul><ul><li>state, prior to receiving referral fees, we will need the following from you to evidence </li></ul><ul><li>your compliance with these registration requirements: </li></ul><ul><li>Provide documentation evidencing your firm’s status as an RIA in good standing (i.e. approved Form ADV, Parts I & II, including Schedule F). </li></ul><ul><li>If required, evidence of the attainment of the appropriate securities licenses (i.e. Series 65 OR Series 7 AND 66). </li></ul><ul><li>Registration requirements vary from state to state. You must contact the relevant state(s) </li></ul><ul><li>directly for that state’s RIA and IAR registration process. Morgan Stanley Smith Barney does </li></ul><ul><li>not provide legal advice and it is imperative that you undertake your own due diligence, </li></ul><ul><li>including engaging legal counsel, to confirm registration requirements. Also, there are </li></ul><ul><li>registration consultants such as National Regulatory Services (NRS) and BlueSky which can </li></ul><ul><li>assist you, for a fee, with the registration process. </li></ul>
  8. 8. <ul><li>What We are Bringing to The Table </li></ul><ul><li>Morgan Stanley Smith Barney </li></ul>
  9. 9. <ul><li>An Industry Leader: Investment Advisors with more than 35 years of experience </li></ul><ul><li>Significant Client Base: Over 1 million private clients and institutional investors </li></ul><ul><li>Notable Investment Experience: $235+ Billion AUM </li></ul><ul><li>Expansive Resources: Approximately 4,500 investment products </li></ul><ul><li>Exceptional Human Capital: 105 investment professionals supporting the business </li></ul><ul><li>All data as of March 2009 </li></ul>Consulting Group
  10. 10. Set Client Objectives Manager Evaluation & Selection On-Going Portfolio Review Develop Asset Allocation Strategy 1. 2. 3 . 4. Consulting Group Four-Step Process
  11. 11. <ul><li>A diverse group of investment professionals </li></ul><ul><li>38 global investment and portfolio strategists </li></ul><ul><li>67 investment advisor research analysts and technical consulting analysts </li></ul><ul><li>Combining formal credentials with practical, real-world experience </li></ul>Our Investment Strategy Team All data as of January 2009 16 strategists Global Investment Committee 22 investment professionals Portfolio Committee 51 research analysts Investment Advisor Research 16 technical analysts Investment Advisory Services Technical Centers
  12. 12. <ul><li>A disciplined process applied across firms and strategies </li></ul><ul><ul><li>Separately managed traditional strategies </li></ul></ul><ul><ul><li>Traditional and alternative mutual funds </li></ul></ul><ul><ul><li>Exchange traded funds </li></ul></ul><ul><ul><li>Alternative strategies supported by operational due diligence </li></ul></ul>The Power of Research <ul><li>Growth </li></ul><ul><li>Value </li></ul><ul><li>Core </li></ul><ul><li>Quantitative strategies </li></ul><ul><li>International </li></ul><ul><li>Fixed Income </li></ul><ul><li>Fund of Hedge Funds </li></ul><ul><li>Single Strategy Hedge Funds </li></ul><ul><li>Private Equity </li></ul><ul><li>Private Real Estate </li></ul>Traditional Strategies Research Alternative Strategies Research Please see important disclosures at the end of this presentation.
  13. 13. What Sets Our Investment Advisor Research Apart <ul><li>Integrity and objectivity </li></ul><ul><li>Extensive universe of advisors and strategies </li></ul><ul><li>Depth of resources and experience </li></ul><ul><li>Proprietary research methodologies </li></ul><ul><li>Regular review and evaluation </li></ul><ul><li>Detailed research reports </li></ul><ul><li>Value-added advice </li></ul><ul><li>Access to global resources </li></ul>
  14. 14. Investment Strategy <ul><li>What is observable / available in the markets at the current time: </li></ul><ul><ul><li>Levels of interest rates and cost of finance </li></ul></ul><ul><ul><li>Equity valuations and earnings prospects </li></ul></ul><ul><ul><li>Behavior of inflation </li></ul></ul><ul><ul><li>Levels of volatility </li></ul></ul><ul><ul><li>Position in the cycle </li></ul></ul>View on Markets In the Future <ul><li>How we see the markets going forward both in the short and long run: </li></ul><ul><ul><li>Strategic Asset Allocation </li></ul></ul><ul><ul><li>Tactical Asset Allocation </li></ul></ul><ul><ul><li>Active Risk : Alpha vs. Beta </li></ul></ul>Client Precise Situation <ul><li>The best and most accurate understanding we can get of the client situation: </li></ul><ul><ul><li>Time horizon and risk profiling </li></ul></ul><ul><ul><li>Both sides of balance sheet </li></ul></ul><ul><ul><li>Income needs </li></ul></ul><ul><ul><li>Liquidity tolerance </li></ul></ul><ul><ul><li>Level of involvement required </li></ul></ul><ul><ul><li>Contingent liabilities </li></ul></ul>Current Market Conditions The prudent combination of three strategies.
  15. 15. My Role as a Financial Advisor <ul><li>Identify investment strategies that can help meet the client’s needs </li></ul><ul><li>Determine the appropriate asset allocation strategy and investment products </li></ul><ul><li>Evaluate, develop, and administer the client’s investment portfolio </li></ul><ul><li>Evaluate portfolio performance to assess progress towards a client’s goals </li></ul><ul><li>Provide oversight of the investment process </li></ul><ul><li>Meet with clients to review and define investment objects and modify the investment strategy as necessary </li></ul>
  16. 16. <ul><li>Clear and open communication </li></ul><ul><li>Fee transparency </li></ul><ul><li>Analysis of investment performance </li></ul><ul><li>Performance reporting and quarterly monitoring </li></ul><ul><li>Periodic investment reviews </li></ul>What Clients Should Expect
  17. 17. Conclusion <ul><li>Why Professional Alliance Group: </li></ul><ul><li>Expand the services available to your clients </li></ul><ul><li>Leverage the experience of an industry leader in wealth management </li></ul><ul><li>Potentially Increase profitability through a net recurring revenue stream </li></ul><ul><li>Distinguish your firm from the competition </li></ul>
  18. 18. <ul><li>Alternative investments are speculative and include a high degree of risk and are suitable only for long-term investors willing to forego liquidity and put capital at risk for an indefinite period of time, such risk can include: </li></ul><ul><ul><li>• loss of all or a substantial portion of the investment due to leveraging, short-selling or other speculative investment practices; </li></ul></ul><ul><ul><li>• lack of liquidity in that there may be no secondary market for the fund and none expected to develop; </li></ul></ul><ul><ul><li>• volatility of returns; </li></ul></ul><ul><ul><li>• restrictions on transferring interests in the fund; • potential lack of diversification and resulting higher risk due to concentration of trading authority with a single advisor; • absence of information regarding valuations and pricing; • delays in tax reporting; • less regulation and higher fees than mutual funds; and • advisor risk. </li></ul></ul><ul><li>This material has been prepared for use with client advisors only and is not intended for dissemination to the general public. </li></ul><ul><li>The information contained in this material is subject to change without notice. Morgan Stanley Smith Barney LLC undertakes no obligation to update this material. </li></ul><ul><li>The information provided in these materials is affected by laws and regulations in effect from time to time. Morgan Stanley Smith Barney LLC and its Financial Advisors do not provide tax or legal advice on such matters. You should consult your attorney for advice on the laws and regulations pertaining to this alliance and your ability to participate in this program. </li></ul><ul><li>Investments and services offered through Morgan Stanley Smith Barney LLC, member SIPC.  Accounts carried by Citigroup Global Markets Inc., member SIPC, or Morgan Stanley & Co. Incorporated, member SIPC . </li></ul><ul><li>©2009 Morgan Stanley Smith Barney 9/09 </li></ul><ul><li>  </li></ul>Important Disclaimers

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