Advisors Discuss Where Alternatives Fit In Client Portfolios Joseph Childrey Probabilities Fund Management, LLC Bill Carter Carter Financial Management Jeanie Wyatt South Texas Money Management, LTD

BILL E. CARTER, CFP®, CLU®, ChFC® President and Founder 12222 Merit Drive, Suite 1800 Dallas, TX 75251 Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. and Carter Advisory Services, Inc. Carter Financial Management and Carter Advisory Services, Inc. are not registered broker/dealers and are independent of Raymond James Financial Services.

FA 8th Annual Inside Alternatives Sheraton Denver Downtown October 23-24, 2017

Alternative Investments What interested me in Alternative Investments? Stock Market 1973 Dow 16.58% Stock Market 1974 Dow 27.57%

CONSIDERATIONS Alternative investments involve substantial risks that may be greater than those associated with traditional investments and are not suitable for all investors. They may be offered only to clients who meet specific suitability requirements, including minimum-net-worth tests. These risks include, but are not limited to, limited liquidity, tax considerations, incentive fee structures, potentially speculative investment strategies, and different regulatory and reporting requirements. Investors should only invest in hedge funds, managed futures, structured products, commodities, real estate or other similar strategies if they do not require a liquid investment and can bear the risk of substantial losses. There is no assurance that any investment will meet its investment objectives or that substantial losses will be avoided. Investors should carefully review any offering materials or prospectuses prior to investing. This presentation is not intended as an offer to sell, or the solicitation of an offer to purchase, any security. The information set forth in this presentation is provided for informational and discussion purposes only. Any offering will be made only by means of a confidential private placement memorandum or prospectus. Diversification does not guarantee profits or protection against losses. Alternative Investments involve substantial risks and are not suitable for all investors. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

ALTERNATIVE INVESTMENTS While there is no concrete definition for what constitutes an alternative investment, there are some attributes: The use of less mainstream investment strategies, resulting in returns that could potentially vary from those available in traditional investments. The markets/instruments traded may be less common and may offer a different risk/reward proposition. Fund structures can vary, often being in an unregistered form (such as limited partnerships or LLCs). Alternative investments may differ from traditional investments in regards to fees, liquidity, tax reporting, etc.

ALTERNATIVE INVESTMENTS Structures & Strategies Hedge Funds Long/Short Equity Event Driven Credit Fund of Funds Private Equity Buyout Venture Other Real Estate Non-traded REITs Opportunistic Real Estate Mutual Funds Long/Short Equity Event Driven Credit Managed Futures/Global Macro Multi-Manager

ALTERNATIVE INVESTMENTS The increased use of alternative investments by sophisticated investors is predicated on the three cornerstones of asset allocation decisions: Risk Return Correlation

ALTERNATIVE INVESTMENTS Risk: Effect of Large Losses This chart is for illustrative purposes only and does not reflect an actual investment.

ALTERNATIVE INVESTMENTS Correlation

ALTERNATIVE INVESTMENTS Event Driven

ALTERNATIVE INVESTMENTS Managed Futures FX COMMODITIES Australian Dollar Japanese Yen British Pound Russian Ruble Canadian Dollar Swiss Franc Corn Rubber Cotton Soybeans Lean Hogs Wheat METALS INTEREST RATES Copper Steel Gold Zinc Silver 2yr Treasury Note 30yr Treasury Bond 5yr Treasury Note Euribor 10yr Treasury Note ENERGY EQUITY Brent Crude Oil Natural Gas Heating Oil Light Sweet Crude Nasdaq 100 Nikkei 225 S&P 500 RTS Index Eurostoxx 50 Individual Equities Source: FIA 2012 This list does not represent a comprehensive list of futures contracts. It is only a partial list of available contracts. 11

ALTERNATIVE INVESTMENTS Private Equity Angel Investors Venture Capital Growth Equity Leverage Buyouts Public Markets

ALTERNATIVE INVESTMENTS Real Estate

ALTERNATIVE INVESTMENTS Due Diligence

ALTERNATIVE INVESTMENTS Considerations Liquidity Fees Transparency Leverage Regulation Taxes Speculative Trading Strategies Specific Investments may have other significant considerations. It is important to study the offering documents of any investment being considered in order to weigh such considerations carefully.

ALTERNATIVE INVESTMENTS Eligibility, Suitability, & Positioning Qualified Purchaser*: $5 mm of investable assets for individuals, $25mm for entities General Guidelines 5% of investable assets per product 20-30% of investable assets overall Outside illiquid exposure capped at 50% IRA or other retirement account exposure capped at 50% 70+ year old clients have stricter guidelines Qualified Client*: $2.1 million total net worth, excluding home Accredited Investor*: $1 mm investable net worth for individuals, $5mm for entities Less than $1 million of investable assets * Requirements are summarized and not intended to be full definitions. Please see the product offering literature for more complete information on requirements for any particular investment. Additional guidelines may apply.

Special Thanks to Raymond James Alternative Investments Group for their assistance with this presentation

QUESTIONS? Bill E. Carter, CFP®, CLU®, ChFC® President Carter Financial Management 214-363-4200 bcarter@carterwealth.com © 2017 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC   © 2017 Raymond James Financial Services, Inc., member FINRA/SIPC Raymond James® is a registered trademark of Raymond James Financial, Inc.