Tu Bui • Transamerica Financial Advisors, Inc. - Millennials and risk management by Katie Kuehner-Hebert - High yield sector shows divergences - Passionate about paying it forward (Nancy Hairsine, Foresters Equity Services, Inc.)

1. High yield
divergences• pg. 7
Paying it
forward • pg. 3
How Millennials
navigate risk• pg. 4
October 2, 2014 | Volume 4 | Issue 2
First magazine focused on active investment management
TU BUI
A mission of
due diligence
VETTING THIRD-PARTY MANAGERS

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3. I take a great deal of satisfaction out of
all of these efforts. I have also been very
active in my local chapter of the FPA,
acting as its President and Chairman. I
think it is very important for everyone
in our profession to give back to the
community in some way. It is not only
gratifying to help others with your
skill set, it is a terrific way to work
side-by-side with so many caring and
involved people.”
have always been involved with
trying to help others and have
found my financial planning skills can
have a real impact in the community.
I was part of the initial planning ef-
forts to kick off Financial Planning Week
in 2008, providing free financial planning
advice to the underserved in the greater
Bay Area to promote financial literacy.This
is now an annual event and the East Bay
Financial Planning Association chapter
has even been recognized nationally.
With my husband being a Vietnam
veteran, I care deeply about our U.S.
armed forces veterans. I frequently work
with them on veterans’ benefits planning.
I am a member of the Ladies Auxiliary
of the VFW and volunteer at the local
veterans’ center. Whenever I can help a
vet I will.
As part of this effort, I have
developed a network of relationships
with CPAs, attorneys, and assisted
care facilities. Frequently, veterans—
especially those getting up there in
age—will not be aware of the benefits
that are available to them. I will often
work with an accredited attorney to
help them investigate the assistance
that is out there for them.
Passionate about paying it forward
Nancy Hairsine CFP®
, RFC®
Pittsburg, CA
Founder, Lifetime Planning
Foresters Equity Services, Inc.
I“
Nancy Hairsine is an Investment Advisor Representative offering securities and advisory services through Foresters Equity Services, Inc.,
a Registered Investment Advisor and Member FINRA/SIPC. Lifetime Planning and Foresters Equity Services are separate and unaffiliated
entities.
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Proactive Advisor Magazine
Copyright 2014 © Dynamic Performance Publishing,
Inc. All rights reserved. Reproduction of printed form,
whole or in part, without permission is prohibited.
Editor
David Wismer
Associate Editor
Elizabeth Whitley
Contributing Writers
Katie Kuehner-Hebert
David Wismer
Graphic Designer
Travis Bramble
Contributing Photographer
Jack Hutch
October 2, 2014
Volume 4 | Issue 02
Proactive Advisor Magazine is
dedicated to promoting and educating
on active investment management.
Distribution reaches a wide audience
of financial professionals who advise
clients on investments and portfolio
management. Each issue features
an experienced investment advisor
who offers insights on active money
management, client service, and
investment approaches. Additionally,
Proactive Advisor Magazine offers
an up-close look at a topic with
current relevance to the field of
active management.
The opinions and forecasts expressed herein are those of the author and may
not actually come to pass. Any opinions and viewpoints regarding the future
of the markets should not be construed as recommendations of any specific
security nor specific investment advice. The analysis and information in this
edition and on our website is for informational purposes only. No part of the
material presented in this edition or on our websites is intended as an investment
recommendation or investment advice. Neither the information nor any opinion
expressed nor any portfolio constitutes a solicitation to purchase or sell securities
or any investment program.
October 2, 2014 | proactiveadvisormagazine.com 3
TIPS & TOOLS

4. Millennials, born between 1980 and 2000,
have faced significant financial and employ-
ment challenges due to coming of age after a
financial crisis and resulting recession—heavy
college debt, fewer job prospects, stagnant
wages, and a growing distrust of conventional
institutions. Such hardships have created a
new generation of prudent savers and cautious
risk-takers, particularly in the eyes of their
Baby Boomer parents, who believe the younger
generation will have a tougher economic road
to navigate than they did.
But Millennials have also been shaped
by paradigm-shifting concepts about their
potential power on the world stage and how
institutions can be molded to fit their visions,
particularly through the use of social media and
other forms of technology. Such dichotomies
will sort themselves out as Millennials progress
in their careers—and inherit wealth from their
parents. Their improving financial situation
and attitudes about asset protection should
make them prime prospects for risk-mitigating
investment strategies.
Active management also fits in with
Millennials’ penchant to utilize technology, as
they are already early adopters of sites that use
algorithms and systematic decision-making to
determine investment allocations. Many are
Read text only
MILLENNIALS AND
RISK MANAGEMENT
Millennials, those roughly between the ages of 18 and 34, might be especially receptive
to actively managed strategies. This younger generation—reared during the Great Recession
and now considered to be almost as conservative as the generation that lived through the Great
Depression—will want to be as proactive as possible to protect their growing assets.
By Katie Kuehner-Hebert
Navigating the “Perfect Storm”
proactiveadvisormagazine.com | October 2, 20144

5. now expressing a desire for combining techno-
logical tools with more hands-on interactions
with advisors, and the generation raised to
take charge of their own lives will likely prefer
advisors who are more willing to collaborate
with them.
Whoever wins the business of Millennials
in the future will reap great dividends, as their
net worth is projected to increase greatly over
the next several decades, partly due to increased
numbers within that generation receiving col-
lege degrees and partly due to inheriting wealth
from their parents. Indeed, according to the
World Economic Forum, Millennials and their
older counterparts, Gen Xers, could potentially
inherit roughly $41 trillion from their parents
over the next 40 years.
But even now, more Millennials have
started saving for retirement in their early 20s
than did Baby Boomers, who on average didn’t
start saving until they were 35, according to a
recent Transamerica Institute study. For those
Millennials who were offered 401(k) or similar
plans by their employer, 71% participated,
contributing 8% of their salaries, on average.
The younger generation is also particularly
receptive to so-called “Robo-Advisor” startups
suchasWealthfront,Betterment,FutureAdvisor
and SigFig, automated money management
sites that use algorithms to daily monitor and,
if necessary, rebalance allocations in indexed
funds based on modern portfolio theory and
individual investors’ ages and objectives.
Then there is Motif Investing, a new online
brokerage that looks “for trends, ideas and world
events that could create an investment opportu-
nity,” and then builds portfolios of related in-
vestments weighted to those opportunities. The
concept is an extension of the growing trend of
college students participating in “impact invest-
ment clubs,” as well as the increased popularity
of socially responsible investing overall.
However, even with the rise of many differ-
ent flavors of online investment management,
many Millennials are also signaling that they
will likely use more traditional financial advisors
once they accumulate more assets. According to
a July 2014 Investment News survey, 84% of
Millennials currently without an advisor said
they would use one when they got older, while
68% who already have an advisor said they
continue on pg. 11
Hands-on advice still matters
would prefer “more direct, personalized advice”
in the future.
Moreover, the survey found that 78%
would prefer advisors who offer online services,
as part of their preference for “holistic advisory
services.” Millennials are expressing a desire
for more frequent contact from their advisor
both in person and digitally via text messaging,
email, video conferencing, and social media.
Millennials might be especially attracted to
an advisor from their own generation—or close
to it. A number of advisors in their 20s and
30s say they feel more like “financial coaches”
who guide their younger clients through the
planning process to reach specific objectives,
or even “financial therapists,” who help clients
work through their fears over investing.
Such advisors help their young clients
understand how much risk would be appro-
priate for them to take within their portfolios,
particularly by helping them to overcome anxi-
eties created by the 2008-09 financial crisis and
resulting recession. Many Millennials have not
reaped the benefits of the current bull market
in equities, but advisors who practice active
management may help them see the wisdom of
participating via risk-managed strategies.
October 2, 2014 | proactiveadvisormagazine.com 5

7. 95
94
93
92
91
90
89
PRICE(HYG)
MONTH
JAN FEB MAR APR MAY JUN JUL AUG SEP
2014 High
High yield ETF
S&P 500
High yield sector shows divergences
igh yield fixed income is one
area that is closely monitored
for any signs of confirmation
or divergence with the equity market,
according to Bespoke Investment Group.
Because high yield is at the riskier end of
the fixed income spectrum, movements are
often closely correlated with equities.
There has been some growing concern
in recent weeks due to the deteriorating
chart pattern of the ETF (HYG) that tracks
high yield fixed income. Bespoke notes that
for much of 2014, high yield fixed income
was one of the strongest performers, with
nearly an uninterrupted rally. After hitting
multi-year highs early in the summer,
though, HYG corrected by just under 3%.
Beginning in August, HYG had a sharp
rebound and nearly erased all of its July
decline, but that rally fell just short of new
highs. Since then HYG has given up more
than half of the ground it gained from the
H
Source: Bespoke Investment Group
lows. One of the most concerning aspects of
the recent pullback was last week’s decline,
one of the steepest of the year.
While HYG failed to take out its prior
high from the summer, the S&P 500 easily
surpassed its summer highs before its own
pullback. Market analysts will continue to
closely watch the performance of the high
yield sector, as continued weakness could
foreshadow broader equity market issues.
Bearish analysts have noted the additional
divergences in other market areas, especially
for small-cap equities (Russell 2000), down
approximately 4% for 2014.
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HIGH YIELD ETF VS. S&P 500: 2014
7October 2, 2014 | proactiveadvisormagazine.com
TOPPING THE CHARTS

8. Read text only
Tu Bui
By David Wismer
Photography by Jack Hutch
due diligence
A mission of
Post-graduate studies honed his analytical skills. His parents’
missionary work in Vietnam cultivated his compassion for the
needy. Now Tu Bui’s advisory practice relies on third-party
risk management strategies to protect client assets for similar
goals, and a rigorous vetting process is mandatory.
Vetting third-party managers
8 proactiveadvisormagazine.com | October 2, 2014

9. Proactive Advisor Magazine: You have
had a remarkable journey to success as a
financial advisor. How did you get where
you are today?
Tu Bui: My family left South Vietnam in
April of 1975, ahead of the fall of Saigon. We
went from Vietnam to Guam and eventually
California, where I grew up and attended high
school. My father is an Adventist missionary
and still very involved in helping support mis-
sionary work in Vietnam.
I went to college in California and earned
a Masters degree in Nutrition at UC Davis
and a Masters degree in Biological Sciences
at CSU Sacramento. I worked for a few years
on several important projects involving nu-
trition education for the State of California
while I was pursuing my PhD at UC Davis.
But during this period, I was introduced by
my sister to the world of financial services. I
started part-time and quickly realized that I
wanted a full-time career as a financial advisor.
What attracted you to the advisory field?
I had always been very interested in the
financial markets, even as a student. I also
think my scientific background and data
analysis knowledge of solving problems, along
with my family heritage of helping people,
made this a very good career choice for me.
Several of my clients are involved in missionary
work and I get a lot of satisfaction in helping
them to improve their financial situation.
How has your investment philosophy
evolved?
Back in the 1990s, when I first got started,
markets really only seemed to go up. Like most
advisors, I was using pretty traditional mutual
funds and asset allocation and everyone was
very happy with their portfolio’s performance. I
do not think our industry had a real answer for
the tech crash of the early 2000s—it was just a
matter of reassuring clients that if they held on,
everything would work out. I was very uncom-
fortable with that and, frankly, it was terrible to
see client portfolios go down so much during
that time.
The market did eventually recover some-
what and that brought us to 2007. My firm
had started to introduce the concept of risk
management and third-party active managers
to its advisors. I was very interested in pursu-
ing the idea of asset protection for my clients.
How did you evaluate active managers?
Well, I applied my belief in analysis to
evaluating third-party managers. I met with
many of them and tried to dig deep into their
performance and philosophy.
I have to admit this was not a perfect
scientific exercise, as this was a field that was
pretty new to many of us. I am a quick study,
though, and recognized that it is not about
chasing performance or what is hot or what is
not. The defining moment for me is, “what can
the money manager do for my clients when the
markets are really moving down quickly?”
I learned the value of my own due diligence
and had the understanding that I am not looking
for aggressive managers who can make the most
money in a bull market—I am looking for true
risk management. If the overall stock market
is down 50%, and an active manager is down
“only” 25%, that is not going to cut it for me.
Down 25% is still a very big hit for many clients’
portfolios. So I look at the active manager’s abil-
ity to really minimize losses in bear markets or
even to profit via short strategies in down mar-
kets. I value that bigger picture approach for my
clients and the capability to effectively manage
through all kinds of market environments.
How has this influenced your advisory
practice?
The effect has been dramatic. I have a fair
amount of high-net-worth clients—physicians,
business owners, etc.—and this has given me a
meaningful story to share with prospects that
is very differentiating. Who wouldn’t want
to talk about concepts that will allow for the
protection and growth of wealth? It has pro-
vided the opportunity to give second opinions
to people about their investment portfolios
with real strategies that they may not have
heard about before. This helps to set me apart
from advisors still pursuing passive strategies.
How do you explain active management
to those new prospects?
I really like to let the facts do the talking
as much as possible, so I will conduct an anal-
ysis of a client’s or prospect’s past investment
portfolio history. Not always, but most of the
time, I will see periods of very high drawdowns
and losses over the last fifteen years. Generally,
I can pinpoint where they have lost years, or
even a decade, of growth in their portfolio due
to those big market crashes.
continue on pg. 10
October 2, 2014 | proactiveadvisormagazine.com 9

10. Show your clients a
friendlier
bear market
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L E A R N M O R E
life. For many, this might mean the difference
in successfully funding missions in the future.
This can range from people with modest means
to physicians who want to fund major medical
missions down the road. I would like to reach
as many people as I can to help with their future
goals, and I am also personally committed to
helping make these missions happen in any way
that I can.
This is really where the conversation starts
in earnest. I explain that it is similar to the
purchase of an automobile. I ask clients what
they drive and many will say a high-end auto-
mobile. I ask why they bought that kind of car
and the reasons are always performance and
safety. Then I ask, “Would you like to partner
with an investment advisor who works to
provide both performance and preservation
of your capital through risk management?”
This decision about their financial future is far
more important than the decision to buy a car.
It tends to hit home with people.
The concept, similar to a car, is that the
safety features in portfolio management are
not used all that frequently. But when they
are needed, they are very, very important.
What about the performance side of the
equation?
It all depends on the client’s specific appetite
for risk and what is appropriate for their long-
term goals. We have some more aggressive active
strategies that have done extremely well on the
equity side, but they are somewhat more volatile
and can have larger drawdowns. But for the
more “middle of the road” client, I can demon-
strate pretty thoroughly that a combination of
strategies can provide very competitive returns
over market cycles, with a strong focus on risk
management and less volatility. The smoother
ride is something that is also important, especial-
ly for clients who are nearing or in retirement.
You spoke about high-net-worth clients.
What about other clients?
It is important to me to bring risk manage-
ment to all of my clients. My father is a prime
example of someone who could have benefited
from sound financial planning and the concept
of asset protection. As a missionary, he didn’t
have a high income, but he also was never really
properly educated on financial matters.
I am trying to bring to other church mem-
bers the right education about saving what they
can and then growing it to help them later in
continued from pg. 9
Tu Bui is a Registered Representative and an Investment Advisor Representative with Transamerica Financial Advisors, Inc. Securities and Investment Advisory Services offered through Transamerica Financial Advisors, Inc. (TFA), Transamerica Financial
Group Division—Member FINRA, SIPC, and Registered Investment Advisor. Non-securities products and services are not offered through TFA. TFG004742-09/14.
10 proactiveadvisormagazine.com | October 2, 2014

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But advisors should also be prepared for
Millennials to not just take them at their word,
as the younger set will likely also conduct inde-
pendent research on any investment strategy, as
well as consult with other experts—even other
advisors—before they sign off on any particular
strategy.
Advisors who utilize active investment man-
agement will likely fit well within the mindset
of Millennials, as this generation is more prone
to favor technology, models, logarithms, and
systematic decision-making to continually
monitor and adjust portfolios as needed. Such
advisors can also work closely with their clients
in assessing appropriate risk profiles within a
long-term investment plan, to determine the
best course of action to help meet specific life
goals.
Advisors offering investment solutions
based on proven risk management principles
continued from pg. 5
Active management may
present a competitive edge
should be well-suited to serving as coaches for
Millennials, especially in helping to overcome
those anxieties regarding financial markets.
They have the tools to demonstrate that
there is a way to achieve favorable risk-adjusted
returns in any market environment, as sophis-
ticated algorithms and models are employed to
capture a fair share of gains and protect against
deep losses in a wide variety of sectors and asset
classes. This should sit well with a generation
that challenges conventional thinking by nature
and has had to overcome the long-lasting effects
of the Great Recession—and likely present such
advisors with a powerful competitive edge.
SAVINGS BREAKDOWN: MILLENNIALS VS. EVERYONE ELSE
AGES 21 TO 36 ALL OTHER AGES
52%
in cash
23%
in cash
Source: UBS Wealth Management, 2014
11October 2, 2014 | proactiveadvisormagazine.com