Separately Managed Account (SMA) Programs: Rapid Growth & the Re-Emergence of Centralized Programs Tiburon Research April 30, 2019

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA) Programs History Separately Managed Account (SMA) Programs was Founded in XXXX and Has Subsequently Evolved Through their Early, Middle, & Recent Phases Separately Managed Account (SMA) Programs History Separately Managed Account (SMA) Programs Founded Separately Managed Account (SMA) Programs Today Early Phase Middle Phase Recent Phase Approximate Dates: XXXX XXXX - XXXX XXXX - XXXX XXXX - XXXX XXXX Key Steps: XXXX : -- XXXX: -- XXXX: -- XXXX: -- Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs The First Type of Managed Account Program is Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Comments -- Source: 6/16 Cerulli Associates Brochure; 12/1/10 My Vest Presentation (Cerulli Associates); 10/29/07 Investment News (Money Management Institute (MMI)); 5/30/07 Fund Fire; 12/15/06 Money Management Institute (MMI); 12/06 Boomer Market Advisor; 9/26/06 MMI Conference Brochure; 9/8/06 Dow Jones Newswire (Cerulli Associates); 9/5/06 American Banker (Money Management Institute (MMI)); 7/19/06 MMI Brochure; Tiburon Research & Analysis 3 3

Separately Managed Account (SMA) Programs Market Background Separately Managed Accounts (SMA) Program Market Background Comments -- Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Programs The Economic Value Chain of a Separately Managed Account (SMA) Programs can be a Helpful Point of Context, with the Largest Share of the Fee Going to the Financial Advisor and His or Her Firm Another source said that program sponsor fees generally include the costs of marketing, due diligence, account monitoring, reconciliation, and reporting Separately Managed Accounts (SMAs) Programs Economic Value Chain Example (Basis Points) 175 43 Another source said that many clearing firms have inaugurated asset-based pricing, starting at 25 bps to replace traditional $15-$25 ticket charges 26 18 88 X% Firm Y% Financial Advisor Client Fee Manager Fee Program Sponsor Fee Clearing Costs Advisory Fee Source: 6/03 Financial Advisor; 3/03 Financial Planning; 9/18/00 Northwestern Mutual Conference Presentation (Mendelson); 9/18/00 Citigroup Presentation (Waller); Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs can be Defined to Include Single Contract, Dual Contract, & Proprietary Programs Separately Managed Account (SMA) Programs Market Definition Separately Managed Account (SMA) Programs Market Definition Single Contract Programs Proprietary Programs Dual Contract Programs Source: Tiburon Research & Analysis 7 7 7

Managed Exchange Traded Funds (ETFs) Programs Separately Managed Account (SMA) Programs Includes 200 Sponsors, Including 100 Single Contract Programs Sponsors Needs real data Managed Exchange Traded Funds (ETFs) Programs Sponsors Source: Tiburon Research & Analysis 8 8

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Includes 200 Programs, Including 100 by Single Contract Programs Needs real data Separately Managed Account (SMA) Programs Source: 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; Tiburon Research & Analysis 9 9

Managed Exchange Traded Funds (ETFs) Programs Separately Managed Account (SMA) Programs Serve 20 Financial Advisor Clients, Including 10 by Single Contract Programs Needs real data Managed Exchange Traded Funds (ETFs) Programs Financial Advisor Clients Source: Tiburon Research & Analysis 10 10

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Serve 1.0 Million Clients, Including 500,000 by Single Contract Programs Needs real data Separately Managed Account (SMA) Programs Clients Source: Tiburon Research & Analysis 11 11

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Have Gathered 1.0 Million Accounts, Including 500,000 Single Contract Programs Needs real data Separately Managed Account (SMA) Programs Accounts Source: 12/15/06 Money Management Institute (MMI); 12/06 Boomer Market Adviser; 6/23/06 Wall Street Journal Money Management Institute (MMI); 8/23/05 Fund Fire; 2/19/04 Money Management Executive; 7/7/03 Wall Street Journal (Cerulli Associates); 7/03 Ticker; 4/3/03 Mutual Fund Market News (FRC); 3/10/03 American Banker; 2/23/03 New York Times; 8/12/02 Fund Marketing Alert (Celent); 6/02 Ticker; Tiburon Research & Analysis 12 12

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Gather 100,000 Net New Accounts, Including 50,000 by Single Contract Programs Needs real data Separately Managed Account (SMA) Programs Net New Accounts Source: Tiburon Research & Analysis 13 13

Separately Managed Account (SMA) Programs Assets Under Management Separately Managed Account (SMA) Programs Have Gathered $1.0 Trillion Assets Under Management, Including $530 Billion by Single Contract Programs Needs real data Needs real data Separately Managed Account (SMA) Programs Assets Under Management ($ Billions) Source: 10/26/18 Vestmark Press Release; 4/1/18 Vestmark Press Release (Money Management Institute (MMI)); 6/16 Cerulli Associates Brochure; 12/1/10 My Vest Presentation (Cerulli Associates); 10/29/07 Investment News (Money Management Institute (MMI)); 5/30/07 Fund Fire; 12/15/06 Money Management Institute (MMI); 12/06 Boomer Market Advisor; 9/26/06 MMI Conference Brochure; Tiburon Research & Analysis 14 14

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Gather $30 Billion Net Flows, Including $12 by Billion by Single Contract Programs Needs real data Separately Managed Account (SMA) Programs Net Flows ($ Billions) Source: 12/1/10 MyVest Presentation (Cerulli Associates); 10/29/07 Investment News; 5/1/06 Financial Planning; 8/23/05 Fund Fire; 1/24/05 Money Management Executive; 9/22/03 Money Management Executive; 7/03 Ticker; 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; Tiburon Research & Analysis 15 15

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Generate $2.0 Billion Revenues, Including $1.0 Billion by Single Contract Programs Needs real data Separately Managed Account (SMA) Programs Revenues ($ Billions) Source: Tiburon Research & Analysis 16 16

Managed Exchange Traded Funds (ETFs) Programs Separately Managed Account (SMA) Programs Earn $2.0 Billion, Including $1.0 Billion by Single Contract Programs Needs real data Managed Exchange Traded Funds (ETFs) Programs Net Profits ($ Billions) Source: Tiburon Research & Analysis 17 17

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Accounts (SMAs) Market Growth Separately Managed Accounts (SMA) Program Market Growth Comments -- Source: Tiburon Research & Analysis

20 Separately Managed Accounts (SMAs) Programs Market Growth Measures Separately Managed Accounts (SMAs) Programs Market Growth can Specifically be Measured by the Number of Sponsors, and their Number of Programs, Financial Advisors, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Programs Market Growth Measures Separately Managed Accounts (SMAs) Programs Market Growth Measures Sponsors Financial Advisors Clients Programs Accounts Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 20

There are 100 Separately Managed Account (SMA) Programs Sponsors Needs update Separately Managed Account (SMA) Programs Sponsors Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Sponsors Offer 200 Programs, Up From Nineteen in 1995 Alternative Data: 1994 (29; 1997 (32 Separately Managed Account (SMA) Programs Source: 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Serve 20,000 Financial Advisors Needs update Separately Managed Account (SMA) Programs Financial Advisors (Thousands) Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Serve 1.0 Million Clients (Millions) Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Accounts Separately Managed Account (SMA) Programs Have Gathers 1.0 Million Accounts, Down From 1.6 Million in 2001 & its Peak of 2.5 Million in 2006 2.5 million in 2006 Separately Managed Account (SMA) Programs Accounts (Millions) Source: 12/15/06 Money Management Institute (MMI); 12/06 Boomer Market Adviser; 6/23/06 Wall Street Journal Money Management Institute (MMI); 8/23/05 Fund Fire; 2/19/04 Money Management Executive; 7/7/03 Wall Street Journal (Cerulli Associates); 7/03 Ticker; 4/3/03 Mutual Fund Market News (FRC); 3/10/03 American Banker; 2/23/03 New York Times; 8/12/02 Fund Marketing Alert (Celent); 6/02 Ticker; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Net New Accounts Separately Managed Account (SMA) Programs Gather 100,000 Net New Accounts, Down From 500,000 in 2002 Average Assets Under Management (2002): $206,000 Separately Managed Account (SMA) Programs Net New Accounts Source: 12/15/06 Money Management Institute (MMI); 12/06 Boomer Market Adviser; 6/23/06 Wall Street Journal Money Management Institute (MMI); 8/23/05 Fund Fire; 2/19/04 Money Management Executive; 7/7/03 Wall Street Journal (Cerulli Associates); 7/03 Ticker; 4/3/03 Mutual Fund Market News (FRC); 3/10/03 American Banker; 2/23/03 New York Times; 8/12/02 Fund Marketing Alert (Celent); 6/02 Ticker; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs The Average Separately Managed Account (SMA) Programs is $322,422, Up From $206,600 in 2002 Needs update Separately Managed Account (SMA) Programs Average Account Size Another source said that the average separately managed account is $500,000; still another said it was $400,000; still another said it was $206,000; still another said it was $190,000 Source: 9/26/06 MMI Conference Brochure; 9/8/06 Dow Jones Newswire (Cerulli Associates); 9/5/06 American Banker (Money Management Institute (MMI)); 7/19/06 MMI Brochure; 7/11/05 Fund Marketing Alert; 7/10/06 Fund Action (FRC); 12/18/03 Financial Planning Newsletter (Money Management Institute (MMI)); 12/1/03 Money Management Executive (Cerulli Associates); 11/03 On Wall Street (Cerulli Associates); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs One Study Showed that Program Sponsors Have an Average Account Size of About $275,000 Separately Managed Account (SMA) Programs Program Sponsors Average Account Sizes ($ Thousands) Average $275,000 Source: 4/14/04 SEI Investments Conversation (Smith); 4/12/04 LPL Conversation (Lopez); 4/12/04 Powell Johnson Conversation (Johnson); 4/5/04 Prudential Financial Conversation (Rice); 3/30/04 Morgan Stanley Conversation (Haynes); 3/25/04 AdvisorPort Conversation (DeAngelis); Tiburon Research & Analysis

Money Managers Have an Average Account Size of $350,000 Too High Relative to Sponsor Page Separately Managed Account (SMA) Programs Money Managers Average Account Sizes ($ Thousands) Average $350,000 Source: 4/8/04 Nuveen Rittenhouse Conversation (Nersesian); 4/1/04 PIMCO Conversation (Patrick); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Banks Have the Highest Average Account Size Amongst Leading Separately Managed Account (SMA) Programs Markets Needs update Separately Managed Account (SMA) Programs Average Account Size By Market ($ Thousands) Average $237,000 Source: 2/16/04 Money Management Executive; 12/18/03 Financial Planning Newsletter (Money Management Institute (MMI)); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Assets Under Management Separately Managed Account (SMA) Programs Have Gathered $1.0 Trillion Assets Under Management, Up from $79 Billion in 1992 But Relatively Steady Since 2007 2018 = 4/1/18 Separately Managed Account (SMA) Programs Assets Under Management ($ Billions) Alternative Data: 1996 ($161 or $185); 1997 ($220); 1998 ($290); 1999 ($350); 2000 ($417); 2001 ($400); 2002 ($391); 2003 ($443); 2006 ($734) Source: 10/26/18 Vestmark Press Release; 4/1/18 Vestmark Press Release (Money Management Institute (MMI)); 6/16 Cerulli Associates Brochure; 12/1/10 My Vest Presentation (Cerulli Associates); 10/29/07 Investment News (Money Management Institute (MMI)); 5/30/07 Fund Fire; 12/15/06 Money Management Institute (MMI); 12/06 Boomer Market Advisor; 9/26/06 MMI Conference Brochure; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Net Flows ($ Billions) Separately Managed Accounts Gather $42 Billion Net Flows, Up from $18 Billion in 2001 But Down from its Peak of $81 Billion in 2005 Alternative Data: 2003 ($53); 2004 ($43) Separately Managed Account (SMA) Programs Net Flows ($ Billions) Source: 12/1/10 MyVest Presentation (Cerulli Associates); 10/29/07 Investment News; 5/1/06 Financial Planning; 8/23/05 Fund Fire; 1/24/05 Money Management Executive; 9/22/03 Money Management Executive; 7/03 Ticker; 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; Tiburon Research & Analysis

Separately Managed Account Programs Generate $4.0 Billion Revenues Separately Managed Account (SMA) Programs Revenues ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Account Programs Earn $2.0 Billion Separately Managed Account (SMA) Programs Net Profits ($ Billions) Source: Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Accounts (SMAs) Program Leaders Separately Managed Accounts (SMA) ProgramLeaders Comments -- Source: Tiburon Research & Analysis

37 Separately Managed Accounts (SMAs) Programs The Leading Separately Managed Accounts (SMAs) Programs Sponsors can Specifically be Ranked by their Number of Programs, Financial Advisors, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Programs Leading Sponsor Measures Separately Managed Accounts (SMAs) Leading Sponsor Measures Programs Clients Accounts Financial Advisors Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 37 37

Separately Managed Accounts (SMA) XXXX is the Leading Separately Managed Account (SMA) Program Sponsor Measured by its Number of Programs Separately Managed Accounts (SMA) Program Sponsors By Programs Source: Tiburon Research & Analysis 38 38

Separately Managed Accounts (SMA) XXXX is the Leading Separately Managed Account (SMA) Program Sponsor Measured by its Number of Financial Advisors Separately Managed Accounts (SMA) Program Sponsors By Financial Advisors Source: Tiburon Research & Analysis 39 39

Separately Managed Accounts (SMA) XXXX is the Leading Separately Managed Account (SMA) Program Sponsor Measured by its Number of Clients Separately Managed Accounts (SMA) Program Sponsors By Clients Source: Tiburon Research & Analysis 40 40

Separately Managed Accounts (SMA) XXXX is the Leading Separately Managed Account (SMA) Program Sponsor Measured by its Number of Accounts Separately Managed Accounts (SMA) Program Sponsors By Accounts Source: Tiburon Research & Analysis 41 41

Separately Managed Accounts (SMA) XXXX is the Leading Separately Managed Account (SMA) Program Sponsor Measured by its Number of Net New Accounts Separately Managed Accounts (SMA) Program Sponsors By Net New Accounts Source: Tiburon Research & Analysis 42 42

Separately Managed Account (SMA) Program Sponsors Smith Barney and Merrill Lynch Dominate the Other Players in Separately Managed Account (SMA) Assets, With Smith Barney Having Over $200 Billion Needs update Separately Managed Account (SMA) Program Sponsors By Assets Under Management (With Proprietary Managers) ($ Billions) Separately managed account (SMA) programs assets under management by manager: top 35 separate account managers (73%); all other separate account managers (another source said that smaller managers and new entrants have been chipping away at the larger managers’ market share in recent years) (another source said that the top 25 managers have 64% of assets and the top ten managers have 43% of assets; additionally, managers ranked #51-#100 combine for only 3% of assets) (Another source said that the top twenty managers account for 80% of assets) (another source said that 30% of assets are with the top ten managers; still another source said that 42% of assets are with the top fifteen managers) Source: 9/5/08 Schwab Institutional Email (Carlin); 12/18/06 Investment News; 5/1/06 Financial Planning (Cerulli Associates); 9/05 Registered Rep Money Management Institute (MMI); 8/05 Bob Veres Newsletter; 6/7/05 Wachovia Conversation (McElhaney); 5/31/05 Trivium Consulting Analysis; 5/30/05 Raymond James Web Site; 5/9/05 AG Edwards Web Site; 7/28/04 Morgan Stanley Analysis; 5/17/04 American Banker; Tiburon Research & Analysis

Separately Managed Account (SMA) Program Sponsors Smith Barney Dominates Separately Managed Account (SMA) Assets Under Management, Especially Due to the Boost Given it By Selling off Its Asset Management Business to Legg Mason when Excluding Proprietary Managers Needs update Separately Managed Account (SMA) Program Sponsors By Assets Under Management (Without Proprietary Managers) ($ Billions) Source: 5/1/06 Financial Planning (Cerulli Associates); 7/05 Merrill Lynch Rep Presentation (Barry); 6/20/05 LPL Letter (Dwyer); 6/7/05 Wachovia Conversation (McElhaney); 6/05 Financial Advisor; 5/28/05 Northwestern Mutual Conversation (Robinson); 5/17/05 Citigroup Web Site; 5/9/05 AG Edwards Web Site; 5/4/05 American Banker; 1/24/05 Fund Marketing Alert; 7/24/04 Morgan Stanley Analysis; 7/6/04 Wall Street Journal; Tiburon Research & Analysis

Separately Managed Account (SMA) Program Managers Legg Mason is the Leading Separate Account Manager (SMA) with $63 Billion in Assets Under Management, After Having Fallen from Over $70 Billion After the Smith Barney Deal Separately Managed Account (SMA) Program Managers By Assets Under Management ($ Billions) Unbundle Another source said that Nuveen Rittenhouse had $29 billion assets under management, Alliance had $17 billion, 1838 had $14 billion, Lazard had $12 billion, Old Mutual had $12 billion, and Lord Abbett had $8 billion Other firms: Neuberger Berman ($12 billion); UBS ($11 billion); Dreyfus (Mellon Financial) ($11 billion); TCW ($11 billion); Natixis ($11 billion); & Eagle Asset Management ($7 billion) Excluding proprietary managers, Nuveen Rittenhouse, Brandes, and Lord Abbett are the largest separate account managers, each having over $13 billion AUM; however, each of these firms are still about one-fifth the size of industry leader Citigroup Another source said that Citigroup had $73 billion assets under management and another said $65 billion Source: 7/19/04 Barron’s; 12/15/03 Investment News (Cerulli Associates); 11/03 On Wall Street (Cerulli)10/03 Registered Representative; 7/03 Ticker; 3/31/03 Investment News (Cerulli Associates); 3/13/03 Financial Planning Email (Cerulli Associates); 2/23/03 New York Times; 10/2/02 Citigroup Presentation (Parker); 9/30/02 Fund Fire; 9/10/02 Financial Advisor; 6/02 Ticker (Cerulli Associates); Tiburon Research & Analysis

Separately Managed Account (SMA) XXXX is the Leading Separately Managed Account (SMA) Program Sponsor Measured by Net Flows Separately Managed Account (SMA) Program Sponsors By Net Flows ($ Billions) Source: Tiburon Research & Analysis 46 46

Separately Managed Account (SMA) XXXX is the Leading Separately Managed Account (SMA) Program Sponsor Measured by Revenues Separately Managed Account (SMA) Program Sponsors By Revenues ($ Billions) Source: Tiburon Research & Analysis 47 47

Separately Managed Account (SMA) XXXX is the Leading Separately Managed Account (SMA) Program Sponsor Measured by Net Profits Separately Managed Account (SMA) Program Sponsors By Net Profits ($ Billions) Source: Tiburon Research & Analysis 48 48

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA) Programs’ Market Segments Separately Managed Accounts (SMAs) Market Segments Comments -- Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs can be Segmented to Include Single Contract, Dual Contract, & Proprietary Separately Managed Account (SMA) Programs Market Segments Separately Managed Account (SMA) Programs Market Segments Single Contract Proprietary Dual Contract Source: Tiburon Research & Analysis 51 51 51

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs by Program Type Needs data Separately Managed Account (SMA) Programs By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Financial Advisors by Program Type Needs data Separately Managed Account (SMA) Programs Financial Advisors By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Clients by Program Type Needs data Separately Managed Account (SMA) Programs Clients By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Accounts by Program Type Needs data Separately Managed Account (SMA) Programs Accounts By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Net New Accounts by Program Type Needs data Separately Managed Account (SMA) Programs Net New Accounts By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Assets Under Management Separately Managed Account (SMA) Programs Assets Under Management by Program Type Needs data Separately Managed Account (SMA) Programs Assets Under Management By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Programs Assets Under Management Nearly Two-Thirds of Assets Under Management Today are in Bundled Programs, with the Other One-Third from Old Unbundled Programs Separately Managed Accounts (SMAs) Programs Assets Under Management By Program Type Source: 9/8/06 Dow Jones Newswire (Cerulli Associates); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Programs Assets Under Management While the Standard View of a Separately Managed Account Program Involve Non-Proprietary Managers One Also Needs to Take into Account the Proprietary Separately Managed Account (SMA) Programs which Account for Almost One-Quarter of All Assets Under Management Smith Barney data needs to be changed Separately Managed Accounts (SMAs) Programs Assets Under Management By Manager Another source said that proprietary managers emerged in 1998-1999, opening up industry data to some confusion; the leading proprietary manager programs include Merrill Lynch and Raymond James Source: 4/19/04 Manulife Financial Brochure (Cerulli Associates); 12/15/03 Investment News (Cerulli Associates); 11/1/02 SunTrust Presentation (O’Reilly) (Cerulli Associates); 11/02 Bloomberg Personal Finance; 6/02 Ticker; 5/27/02 Merrill Lynch Presentation (Doe) (Cerulli Associates); 11/01 On Wall Street; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Net Flows by Program Type Needs data Separately Managed Account (SMA) Programs Net Flows By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Revenues by Program Type Needs data Separately Managed Account (SMA) Programs Revenues By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Net Profits by Program Type Needs data Separately Managed Account (SMA) Programs Net Profits By Type Proprietary Dual Contract Single Contract Source: Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

SMA Single Contract Programs Separately Managed Account (SMA)’s First Market Segment is Single Contract SMA Single Contract Programs Comments -- Source: Tiburon Research & Analysis

65 Separately Managed Accounts (SMAs) Single Contract Programs Separately Managed Accounts (SMAs) Single Contract Programs Market Growth can Specifically be Measured by the Number of Sponsors, and their Number of Programs, Financial Advisor Clients, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Single Contract Programs Market Growth Measures Separately Managed Accounts (SMAs) Single Contract Programs Market Growth Measures Sponsors Financial Advisor Clients Clients Programs Accounts Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 65

Separately Managed Accounts (SMAs) Single Contract Programs Sponsors Needs data Separately Managed Accounts (SMAs) Single Contract Programs Sponsors Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Needs data Separately Managed Accounts (SMAs) Single Contract Programs Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Separately Managed Accounts (SMAs) Single Contract Programs Serve Clients Needs data Separately Managed Accounts (SMAs) Single Contract Programs Clients (Millions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Accounts Separately Managed Accounts (SMAs) Single Contract Programs Have Gathered __ Accounts Needs data Separately Managed Accounts (SMAs) Single Contract Programs Accounts (Millions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Gather Net New Accounts Needs data Separately Managed Accounts (SMAs) Single Contract Programs Net New Accounts Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Separately Managed Accounts (SMAs) Single Contract Programs Average Account Size Needs data Separately Managed Accounts (SMAs) Single Contract Programs Average Account Size Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Separately Managed Accounts (SMAs) Single Contract Programs Have Gathered Assets Under Management Needs data Separately Managed Accounts (SMAs) Single Contract Programs Assets Under Management ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Bundled Programs Separately Managed Account (SMA) Programs Have Gathered $497 Billion Assets Under Management, From $470 Billion in 2003 Needs update Separately Managed Accounts (SMAs) Bundled Programs Assets Under Management ($ Billions) Municipal bonds = 9.1% in 2007 & 20.5% in 2010 Leading managers (8/12): BlackRock ($56 billion); Nuveen Investments ($44 billion); Legg Mason; PIMCO; Eaton Vance; & Neuberger Berman Source: 8/27/12 Money Management Executive (Money Management Institute (MMI)); 5/18/11 The Bond Buyer (Cerulli Associates); 9/8/06 Dow Jones Newswire (Cerulli Associates); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Assets Under Management Separately Managed Account (SMA) Programs Have Gathered $497 Billion Assets Under Management, From $470 Billion in 2003 Needs update Separately Managed Accounts (SMAs) Assets Under Management (Without Proprietary Managers) ($ Billions) Delete? Source: 7/05 Merrill Lynch Rep Presentation (Barry); 6/20/05 LPL Letter (Dwyer); 6/7/05 Wachovia Conversation (McElhaney); 6/05 Financial Advisor; 5/28/05 Northwestern Mutual Conversation (Robinson); 5/17/05 Citigroup Web Site; 5/9/05 AG Edwards Web Site; 5/4/05 American Banker; 1/24/05 Fund Marketing Alert; 7/24/04 Morgan Stanley Analysis; 7/6/04 Wall Street Journal; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Separately Managed Accounts (SMAs) Single Contract Programs Gather Net Flows Needs data Separately Managed Accounts (SMAs) Single Contract Programs Net Flows ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Separately Managed Accounts (SMAs) Single Contract Programs Generate Revenues Needs data Separately Managed Accounts (SMAs) Single Contract Programs Revenues ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs Earn $__ Needs data Separately Managed Accounts (SMAs) Single Contract Programs Net Profits ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Program Leaders Separately Managed Accounts (SMA) ProgramLeaders Comments -- Source: Tiburon Research & Analysis

79 Separately Managed Accounts (SMAs) Single Contract Programs The Leading Separately Managed Accounts (SMAs) Single Contract Programs Sponsors can Specifically be Ranked by their Number of Programs, Financial Advisors, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Single Contract Programs Leading Sponsor Measures Separately Managed Accounts (SMAs) Single Contract Programs Leading Sponsor Measures Programs Clients Accounts Financial Advisors Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 79 79

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by its Number of Programs Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Programs Source: Tiburon Research & Analysis 80 80

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by its Number of Financial Advisors Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Financial Advisors Source: Tiburon Research & Analysis 81 81

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by its Number of Clients Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Clients Source: Tiburon Research & Analysis 82 82

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by its Number of Accounts Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Accounts Source: Tiburon Research & Analysis 83 83

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by its Number of Net New Accounts Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Net New Accounts Source: Tiburon Research & Analysis 84 84

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by its Assets Under Management Needs data Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Assets Under Management ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by Net Flows Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Net Flows ($ Billions) Source: Tiburon Research & Analysis 86 86

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by Revenues Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Revenues ($ Billions) Source: Tiburon Research & Analysis 87 87

Separately Managed Accounts (SMAs) Single Contract Programs XXXX is the Leading Separately Managed Account (SMA) Single Contract Program Sponsor Measured by Net Profits Separately Managed Accounts (SMAs) Single Contract Programs Program Sponsors By Net Profits ($ Billions) Source: Tiburon Research & Analysis 88 88

Separately Managed Account (SMA) Single Contract Programs Have Future Predictions Separately Managed Accounts (SMAs) Single Contract Programs Future Predictions Comments -- Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Single Contract Programs’ Future Predictions Include… Source: Tiburon Research & Analysis 90 90 90

Separately Managed Account (SMA) Single Contract Programs’ First Future Prediction is… Comments -- Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Single Contract Programs’ Second Future Prediction is… Comments -- Source: Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

SMA Dual Contract Programs Separately Managed Account (SMA)’s Second Market Segment is Dual Contract Programs SMA Dual Contract Programs Comments -- Source: Tiburon Research & Analysis

95 Separately Managed Accounts (SMAs) Dual Contract Programs Separately Managed Accounts (SMAs) Dual Contract Programs Market Growth can Specifically be Measured by the Number of Sponsors, and their Number of Programs, Financial Advisor Clients, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Dual Contract Programs Market Growth Measures Separately Managed Accounts (SMAs) Dual Contract Programs Market Growth Measures Sponsors Financial Advisor Clients Clients Programs Accounts Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 95

Separately Managed Accounts (SMAs) Dual Contract Programs Sponsors Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Sponsors Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Separately Managed Accounts (SMAs) Dual Contract Programs Serve Clients Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Clients (Millions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Accounts Separately Managed Accounts (SMAs) Dual Contract Programs Have Gathered __ Accounts Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Accounts (Millions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Gather Net New Accounts Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Net New Accounts Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Separately Managed Accounts (SMAs) Dual Contract Programs Average Account Size Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Average Account Size Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Separately Managed Accounts (SMAs) Dual Contract Programs Gather Assets Under Management Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Assets Under Management ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Separately Managed Accounts (SMAs) Dual Contract Programs Gather Net Flows Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Net Flows ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Separately Managed Accounts (SMAs) Dual Contract Programs Generate Revenues Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Revenues ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs Earn $__ Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Net Profits ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMA) Dual Contract Programs Leaders Separately Managed Accounts (SMAs) Dual Contract Programs Program Leaders Separately Managed Accounts (SMA) Dual Contract Programs Leaders Comments -- Source: Tiburon Research & Analysis

107 Separately Managed Accounts (SMAs) Dual Contract Programs The Leading Separately Managed Accounts (SMAs) Dual Contract Programs Sponsors can Specifically be Ranked by their Number of Programs, Financial Advisors, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Dual Contract Programs Leading Sponsor Measures Separately Managed Accounts (SMAs) Dual Contract Programs Leading Sponsor Measures Programs Clients Accounts Financial Advisors Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 107 107

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by its Number of Programs Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Programs Source: Tiburon Research & Analysis 108 108

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by its Number of Financial Advisors Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Financial Advisors Source: Tiburon Research & Analysis 109 109

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by its Number of Clients Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Clients Source: Tiburon Research & Analysis 110 110

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by its Number of Accounts Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Accounts Source: Tiburon Research & Analysis 111 111

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by its Number of Net New Accounts Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Net New Accounts Source: Tiburon Research & Analysis 112 112

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by its Assets Under Management Needs data Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Assets Under Management ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by Net Flows Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Net Flows ($ Billions) Source: Tiburon Research & Analysis 114 114

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by Revenues Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Revenues ($ Billions) Source: Tiburon Research & Analysis 115 115

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Dual Contract Program Sponsor Measured by Net Profits Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Net Profits ($ Billions) Source: Tiburon Research & Analysis 116 116

Separately Managed Account (SMA) Dual Contract Programs Have Future Predictions Separately Managed Accounts (SMAs) Single Contract Programs Future Predictions Comments -- Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Dual Contract Programs’ Future Predictions Include… Source: Tiburon Research & Analysis 118 118 118

Separately Managed Account (SMA) Dual Contract Programs’ First Future Prediction is… Comments -- Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Dual Contract Programs’ Second Future Prediction is… Comments -- Source: Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA)’s Third Market Segment is Proprietary SMA Proprietary Programs Comments -- Source: Tiburon Research & Analysis

123 Separately Managed Accounts (SMAs) Proprietary Programs Separately Managed Accounts (SMAs) Proprietary Programs Market Growth can Specifically be Measured by the Number of Sponsors, and their Number of Programs, Financial Advisor Clients, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Proprietary Programs Market Growth Measures Separately Managed Accounts (SMAs) Proprietary Programs Market Growth Measures Sponsors Financial Advisor Clients Clients Programs Accounts Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 123

Separately Managed Accounts (SMAs) Proprietary Programs Sponsors Needs data Separately Managed Accounts (SMAs) Proprietary Programs Sponsors Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Separately Managed Accounts (SMAs) Proprietary Programs Needs data Separately Managed Accounts (SMAs) Proprietary Programs Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Proprietary Programs Serve Clients Needs data Separately Managed Accounts (SMAs) Proprietary Programs Clients (Millions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Proprietary Programs Accounts Separately Managed Accounts (SMAs) Proprietary ProgramsHave Gathered Accounts Needs data Separately Managed Accounts (SMAs) Proprietary Programs Accounts (Millions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Proprietary Programs Gather Net New Accounts Needs data Separately Managed Accounts (SMAs) Proprietary Programs Net New Accounts Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Proprietary Programs Separately Managed Accounts (SMAs) Proprietary Programs Average Account Size Needs data Separately Managed Accounts (SMAs) Proprietary Programs Average Account Size Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Proprietary Programs Separately Managed Accounts (SMAs) Proprietary Programs Have Gathered Assets Under Management Needs data Separately Managed Accounts (SMAs) Proprietary Programs Assets Under Management ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Separately Managed Accounts (SMAs) Proprietary Programs Gather Net Flows Needs data Separately Managed Accounts (SMAs) Proprietary Programs Net Flows ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Proprietary Programs Separately Managed Accounts (SMAs) Proprietary Programs Generate Revenues Needs data Separately Managed Accounts (SMAs) Proprietary Programs Revenues ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Proprietary Programs Earn $__ Needs data Separately Managed Accounts (SMAs) Proprietary Programs Net Profits ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMA) Proprietary Programs Leaders Separately Managed Accounts (SMAs) Proprietary Programs Program Leaders Separately Managed Accounts (SMA) Proprietary Programs Leaders Comments -- Source: Tiburon Research & Analysis

135 Separately Managed Accounts (SMAs) Proprietary Programs The Leading Separately Managed Accounts (SMAs) Proprietary Programs Sponsors can Specifically be Ranked by their Number of Programs, Financial Advisors, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Proprietary Programs Leading Sponsor Measures Separately Managed Accounts (SMAs) ProprietaryPrograms Leading Sponsor Measures Programs Clients Accounts Financial Advisors Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 135 135

Separately Managed Accounts (SMAs) Proprietary Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by its Number of Programs Separately Managed Accounts (SMAs) Proprietary Programs Program Sponsors By Programs Source: Tiburon Research & Analysis 136 136

Separately Managed Accounts (SMAs) Proprietary Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by its Number of Financial Advisors Separately Managed Accounts (SMAs) Proprietary Programs Program Sponsors By Financial Advisors Source: Tiburon Research & Analysis 137 137

Separately Managed Accounts (SMAs) Proprietary Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by its Number of Clients Separately Managed Accounts (SMAs) Proprietary Programs Program Sponsors By Clients Source: Tiburon Research & Analysis 138 138

Separately Managed Accounts (SMAs) Proprietary Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by its Number of Accounts Separately Managed Accounts (SMAs) Proprietary Programs Program Sponsors By Accounts Source: Tiburon Research & Analysis 139 139

Separately Managed Accounts (SMAs) Proprietary Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by its Number of Net New Accounts Separately Managed Accounts (SMAs) Proprietary Programs Program Sponsors By Net New Accounts Source: Tiburon Research & Analysis 140 140

Separately Managed Accounts (SMAs) Proprietary Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by its Assets Under Management Needs data Separately Managed Accounts (SMAs) Proprietary Programs Program Sponsors By Assets Under Management ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Proprietary Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by Net Flows Separately Managed Accounts (SMAs) Proprietary Programs Program Sponsors By Net Flows ($ Billions) Source: Tiburon Research & Analysis 142 142

Separately Managed Accounts (SMAs) Dual Contract Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by Revenues Separately Managed Accounts (SMAs) Dual Contract Programs Program Sponsors By Revenues ($ Billions) Source: Tiburon Research & Analysis 143 143

Separately Managed Accounts (SMAs) Proprietary Programs XXXX is the Leading Separately Managed Account (SMA) Proprietary Program Sponsor Measured by Net Profits Separately Managed Accounts (SMAs) Proprietary Programs Program Sponsors By Net Profits ($ Billions) Source: Tiburon Research & Analysis 144 144

Separately Managed Account (SMA) Proprietary Programs Have Future Predictions Separately Managed Accounts (SMAs) Proprietary Programs Future Predictions Comments -- Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Separately Managed Account (SMA) Separately Managed Account (SMA) Proprietary Programs’ Future Predictions Include… Separately Managed Account (SMA) Proprietary Programs Future Predictions Separately Managed Account (SMA) Proprietary Programs Future Predictions Future Prediction #1 Future Prediction #2 Source: Tiburon Research & Analysis 146 146 146

Separately Managed Account (SMA) Proprietary Programs’ First Future Prediction is… Comments -- Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Proprietary Programs’ Second Future Prediction is… Comments -- Source: Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA) Programs Have Future Predictions Separately Managed Account Programs Future Predictions Comments -- Source: Tiburon Research & Analysis

151 151 Separately Managed Account (SMA) Programs Future Predictions Separately Managed Account (SMA) Programs’ Future Predictions Include Slow Growth for Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Future Predictions Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees Modest Manager Opportunities Incorporation of Alternative Investments Source: 1/18/12 Fund Fire (Sottosanti); Tiburon Research & Analysis 151 151 151

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA) Programs’ First Future Prediction is Slow Growth for Separately Managed Account (SMA) Programs Slow Growth Comments -- Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Programs Surprisingly, Program Sponsors & Money Managers Rate the Future of Separately Managed Accounts (SMAs) as Only Moderate, with an Average Score of 6.2 Separately Managed Accounts (SMAs) Programs Program Sponsors & Money Managers Ratings of the Future (1-10; 10 = High) Average 6.2 Source: 11/10/06 SEI Investments Conversation (Schaeffer); 11/10/06 Envestnet Conversation (Fowler); 11/10/06 Envestnet Conversation (Hardwick); 11/9/06 US Fiduciary Conversation (MacKillop); 11/9/06 Capital Markets Consultants Conversation (Mendelson); 11/9/06 Harpeth Partners Conversation (Johnson); 11/7/06 Envestnet Conversation (Harris); 11/7/06 Envestnet Conversation (O’Brien); Tiburon Research & Analysis

Program Sponsors & Money Managers Have Mixed Comments on the Future of Separately Managed Account (SMA) Programs, Pointing to Numerous Reasons for Expected Slowed Growth Comments Positive Comments “High net worth consumers are still interested in this” “They will continue to be the dominant application just like now” “They are the foundation” “This is the only type of program that can be customized” Negative Comments “Clients do not wake up needing separate accounts” “Brokers still chase the hot dots in these programs” “The methodology does not answer the clients’ need; this product leaves it up to the client to put the portfolio together” “Things will move to the unified managed account platform instead” “More programs will use separate accounts, mutual funds, & exchange traded funds based on account size” “There are so many other products; when I first started working at a TAMP, this was our primary product; now we have MSPs, mutual funds, etc.” “The independent broker/dealers have been talking about but not using separate accounts” “People like the thought more than the actuality” “Account minimums are a barrier” Source: 11/10/06 SEI Investments Conversation (Schaeffer); 11/10/06 Envestnet Conversation (Fowler); 11/10/06 Envestnet Conversation (Hardwick); 11/9/06 US Fiduciary Conversation (MacKillop); 11/9/06 Capital Markets Consultants Conversation (Mendelson); 11/9/06 Harpeth Partners Conversation (Johnson); 11/7/06 Envestnet Conversation (Harris); 11/7/06 Envestnet Conversation (O’Brien); Tiburon Research & Analysis

Tiburon CEO Summit Attendees Content Survey Feedback Tiburon CEO Summit Attendee on the Decline of Separately Managed Accounts (SMAs) Programs Tiburon CEO Summit Attendees Content Survey Feedback Future of Separately Management Account (SMA) Programs “Separately managed accounts (SMA) programs are dying” Jim Seuffert Managing Director, Envestnet Source: 3/9/17Tiburon CEO Summit XXXII Content Survey (Seuffert); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Programs Full-Service Brokers Full-Service Brokers Seem to be Extremely Excited About Separately Managed Accounts (SMAs), Rating their Future as a 9.6 Separately Managed Accounts (SMAs) Programs Full-Service Brokers Ratings of the Future (1-10; 10 = High) Average 9.6 Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Comments Optimism About the Future Full-Service Brokers See the Future of Separately Managed Accounts (SMAs) as Very Bright, Specifically Mentioning their Ability to Help them Manage their Own Businesses More Effectively Comments Optimism About the Future “Separately managed accounts serve the needs of a very large segment of investors” “They are the wave of the future” “They are a very important part of my business now, and the future is bright as well” “A big trend in the industry” Advantage of Task Division “I cannot both bring clients in and manage their portfolios effectively; separately managed accounts allow me to do both” “Offering strong managers makes me the quarterback of my clients’ entire portfolios” Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

159 Separately Managed Accounts (SMAs) Programs Market Growth Measures Separately Managed Accounts (SMAs) Programs Market Growth can Specifically be Measured by the Number of Sponsors, and their Number of Programs, Financial Advisor Clients, Clients, Accounts, Net New Accounts, Assets Under Management, Net Flows, Revenues, & Net Profits Separately Managed Accounts (SMAs) Programs Market Growth Measures Separately Managed Accounts (SMAs) Programs Market Growth Measures Sponsors Financial Advisor Clients Clients Programs Accounts Assets Under Management Revenues Net Profits Net Flows Net New Accounts Source: Tiburon Research & Analysis 159

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs will Have 130 Sponsors by 2023, Up From 100 in 2017 Separately Managed Account (SMA) Programs Sponsors Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Program Sponsors will Offer 260 Programs by 2023, Up From 200 in 2017 Separately Managed Account (SMA) Programs Source: 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs will Serve 26,000 Financial Advisors by 2023, Up From 20,000 in 2017 Separately Managed Account (SMA) Programs Financial Advisors (Thousands) Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs will Serve 1.6 Million Clients by 2023, Up From 1.0 Million in 2017 Separately Managed Account (SMA) Programs Clients (Millions) Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Accounts Separately Managed Account (SMA) Programs will Have Gathered 1.6 Million Accounts by 2023, Up From 1.0 Million in 2017 Separately Managed Accounts (Millions): 2015 (5.3); 2016 (6.2); 2017 (7.9) 2018 (10.0); 2019 (12.4); 2020 (16.4); 2022 (16.4) Separately Managed Account (SMA) Programs Accounts (Millions) Source: 12/15/06 Money Management Institute (MMI); 12/06 Boomer Market Adviser; 6/23/06 Wall Street Journal Money Management Institute (MMI); 8/23/05 Fund Fire; 2/19/04 Money Management Executive; 7/7/03 Wall Street Journal (Cerulli Associates); 7/03 Ticker; 4/3/03 Mutual Fund Market News (FRC); 3/10/03 American Banker; 2/23/03 New York Times; 8/12/02 Fund Marketing Alert (Celent); 6/02 Ticker; 5/02 On Wall Street (FRC); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Net New Accounts Separately Managed Account (SMA) Programs Will Gather 160,000 Net New Accounts by 2023, Up From 100,000 in 2017 Separately Managed Account (SMA) Programs Net New Accounts Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs will Have an Average Account Size of $350,000 in 2023, Consistent Since 2017 $322, 422 in 2006 Separately Managed Account (SMA) Programs Average Account Size Source: 9/26/06 MMI Conference Brochure; 9/8/06 Dow Jones Newswire (Cerulli Associates); 9/5/06 American Banker (Money Management Institute (MMI)); 7/19/06 MMI Brochure; 7/11/05 Fund Marketing Alert; 7/10/06 Fund Action (FRC); 12/18/03 Financial Planning Newsletter (Money Management Institute (MMI)); 12/1/03 Money Management Executive (Cerulli Associates); 11/03 On Wall Street (Cerulli Associates); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Assets Under Management Separately Managed Account (SMA) Programs will Have Gathered $11.5 Trillion Assets Under Management by 2023, Up from $882 in 2016 Separately Managed Accounts Assets Under Management (With Proprietary Managers) ($ Billions): 2015 ($805); 2016 ($889; ($1,200); 2018 ($1,450); 2019 ($1,800); 2020 ($2,250); 2021 ($2,850); 2022 ($2,850) Separately Managed Account (SMA) Programs Assets Under Management ($ Billions) Separately Managed Accounts 2010 Assets Under Management Projections ($ Billions): Money Management Institute (MMI) ($1,800); McKinsey & Company ($1,500); Aite Group ($1,501); Financial Research Corporate ($1,500); Cerulli Associates ($1,000) Separately Managed Accounts (Without Proprietary Managers) ($ Billions): 2015 ($650); 2016 ($800); 2017 ($1,005); 2018 ($1,250); 2019 ($1,490); 2020 ($1,725); 2021 ($1,960); 2022 ($1,960) Source: 10/26/18 Vestmark Press Release; 6/16 Cerulli Associates Brochure; 6/16 Cerulli Associates Brochure; 12/1/10 My Vest Presentation (Cerulli Associates); 12/1/10 My Vest Presentation (Cerulli Associates); 10/29/07 Investment News (Money Management Institute (MMI)); 5/30/07 Fund Fire; 12/15/06 Money Management Institute (MMI); 12/06 Boomer Market Advisor; 9/26/06 MMI Conference Brochure; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Accounts will Gather $72 Billion Net Flows by 2023, Up From $37 Billion in 2016 Separately Managed Account (SMA) Programs Net Flows ($ Billions) Source: 12/1/10 MyVest Presentation (Cerulli Associates); 10/29/07 Investment News; 5/1/06 Financial Planning; 8/23/05 Fund Fire; 1/24/05 Money Management Executive; 9/22/03 Money Management Executive; 7/03 Ticker; 8/19/02 Investment News; 6/02 Ticker; 2/7/02 Prudential Financial Presentation (Kinne); 8/9/99 Investment News; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs will Generate $4.6 Billion Revenues by 2023, Up From $3.9 Billion in 2016 Separately Managed Account (SMA) Programs Revenues ($ Billions) Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs will Earn $2.6 Billion by 2023, Up From $1.9 Billion in 2016 Separately Managed Account (SMA) Programs Net Profits ($ Billions) Source: Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA) Programs’ Second Future Prediction is Increase Usage of Model Portfolios Separate Account Managers will Need to Provide Models: Multiple style portfolios have started this trend; but even more broadly, separately managed account programs may move to model-based operating protocols, offering cost advantages and re-positioning investment management organizations more narrowly Comments -- Model Portfolios: Improve SMAs; some managers claimed to have proprietary trading strategies; use of model portfolios allows overlay tax & position management to be managed far better; this should drive down taxes & trading costs for clients; delivering models is less expensive than managing portfolios so costs for clients should decline Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Sponsors by Program Type Needs data Separately Managed Account (SMA) Programs Sponsors By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 173

Separately Managed Account (SMA) Programs by Program Type Needs data Separately Managed Account (SMA) Programs By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 174

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Financial Advisors by Program Type Needs data Separately Managed Account (SMA) Programs Financial Advisors By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 175

Separately Managed Account (SMA) Programs Clients by Program Type Needs data Separately Managed Account (SMA) Programs Clients By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 176

Separately Managed Account (SMA) Programs Accounts by Program Type Needs data Separately Managed Account (SMA) Programs Accounts By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 177

Separately Managed Account (SMA) Programs Separately Managed Account (SMA) Programs Net New Accounts by Program Type Needs data Separately Managed Account (SMA) Programs Net New Accounts By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 178

Separately Managed Account (SMA) Programs Assets Under Management Separately Managed Account (SMA) Programs Assets Under Management by Program Type Needs data Separately Managed Account (SMA) Programs Assets Under Management By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 179

Separately Managed Account (SMA) Programs Net Flows by Program Type Needs data Separately Managed Account (SMA) Programs Net Flows By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 180

Separately Managed Account (SMA) Programs Revenues by Program Type Needs data Separately Managed Account (SMA) Programs Revenues By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 181

Separately Managed Account (SMA) Programs Net Profits by Program Type Needs data Separately Managed Account (SMA) Programs Net Profits By Program Type Model Portfolios Traditional Programs Source: Tiburon Research & Analysis 182

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA) Programs’ Third Future Prediction is Declining Fees for Separately Managed Account (SMA) Programs Declining Fees Comments The most frequent criticism of separately managed accounts (SMAs) in the old days was pricing; they were originally marketed at 3.00% (vulnerable to critics who insisted that they were overpriced; separately managed accounts were compared as a product to mutual funds at 1.00%-1.50%) -- Every program sponsor has a discount grid that enables financial advisors to lower fees for competitive purposes in reality (discount capabilities were widely used; also a more fair comparison would have been to mutual fund wrap accounts) Separately managed accounts (SMAs) fees pricing philosophies: Charge Highest fee possible (see separately managed accounts as a great way to deliver value, and are not scared to charge for them); discount (use volume discounts to attract wealthier clients; advisors seeking to keep their asset levels up which oftentimes drive payout rates; younger financial advisors may under price) Technology has been bringing down costs for program sponsor & money managers, some of which has been passed on to clients Source: 10/25/02 Legg Mason Conversation (Hanes); 10/22/02 Legg Mason Advisor Conversation (Davidov); 8/12/02 Investment News; 1/02 Financial Planning; 11/01 On Wall Street; 7/9/01 EnvestnetPortfolio Management Consultants (PMC) Presentation (Crager); 7/01 Financial Advisor; Tiburon Research & Analysis

Separately Managed Account (SMA) The Average Separately Managed Account (SMA) Client Pays 1.75%, Down from 2.11% in 1998 Needs Update Separately Managed Account (SMA) Average Fee Source: 12/1/03 Money Management Executive (Cerulli Associates); 11/03 On Wall Street (Cerulli Associates); 10/03 Kiplinger’s; 8/11/03 Fund Marketing Alert; 6/03 Financial Advisor; 2/23/03 New York Times; 10/22/02 Legg Mason Advisor Conversation (Davidov); 6/02 Ticker; 4/14/03 Forbes; 2/01 Financial Planning; 11/12/01 Investment News; 11/01 On Wall Street; 10/01 Investment Consulting News; Tiburon Research & Analysis

Opinions About Importance of Pricing Full-Service Brokers Rate the Importance of Pricing in Actually Selling Separately Managed Accounts (SMAs) as Only a 6.2 Full-Service Brokers Opinions About Importance of Pricing In Selling Separately Managed Accounts (SMAs) (1-10; 10 = High) Average 6.2 Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Full-Service Brokers Mention Pricing it Not a Top Issue when it Comes to Selling Separately Managed Accounts (SMAs), Saying their Clients will Pay for Quality Comments Resistance to Price Negotiations “I hardly ever get into large pricing negotiations; if a person is going to want to go there, usually I screen them out before we ever hit that point” “We compete on service primarily, not as much on price” Focus on Value “Price is not nearly as important as quality – value is value” “Price is important, but people will pay for the right manager” Importance of Pricing “People are not going to quibble over 10 basis points, but you have to be competitive” “Pricing is big – separately managed accounts tend to be cheaper than mutual funds which helps in selling them” Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Modest Manager Opportunities Separately Managed Account (SMA) Programs’ Fourth Future Prediction is Modest Manager Opportunities Modest Manager Opportunities Comments -- Source: Tiburon Research & Analysis

By Importance of Historical Manager Performance Only Half of Financial Advisors Consider Historical Manager Performance to be Extremely Important in the Recommendation Process Financial Advisors By Importance of Historical Manager Performance Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Many Full-Service Brokers Say that Access to Quality Managers is a Key Reason for Clients to Utilize Separately Managed Accounts (SMAs) Comments Important Feature “I recognized that I was not an expert a long time ago; it makes sense to place my clients’ assets in the hands of a quality money manager who’s better informed to make investment decisions” “The number one reason I use separately managed accounts is the ability to access the best managers from a variety of investment styles” “I am an asset allocator, not a stock or fund picker… separately managed accounts are a great tool in my business” “As an advisor, you have to recognize where your strengths and weaknesses are; in my case, I know that others are better equipped to select individual stocks than me” “I tell my clients that the best way to increase their portfolio is to give their money to the best managers in various asset classes” Source: 1/8/04 RW Baird Advisor Conversation (Busey); 1/8/04 RW Baird Advisor Conversation (Michels); 1/8/04 RW Baird Advisor Conversation (Garrett); 1/8/04 RW Baird Advisor Conversation (Mertens); 1/7/04 RW Baird Advisor Conversation (Carter); 1/7/04 RW Baird Advisor Conversation (Zeidler); 11/7/03 Legg Mason Advisor Conversation (Rosenfield); 11/7/03 Legg Mason Advisor Conversation (Castle); Research & Analysis

Full-Service Brokers Opinions About Importance of Superior Manager Full-Service Brokers Rate the Importance of Superior Manager Menus in Selling Separately Managed Accounts (SMAs) as a 9.6 Full-Service Brokers Opinions About Importance of Superior Manager (1-10; 10 = High) Average 9.6 Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Full-Service Brokers are Genuine Believers that Having a Strong Manager Menu is of the Utmost Importance, Mentioning Ample Benefits to Clients Comments General Importance “A good stable of managers is so important” “With lousy managers, you do not have much of a product” “Just as important as understanding my clients’ goals and objectives” “Having access to quality managers that not everybody has allows you to distinguish yourself” Beneficial to Clients “I need to have choices to fit different clients, from those in the ultra high net worth to those ready to retire” “We do not always have time to let an underperformer catch up, so it is important to have a strong variety of mangers when it comes time to change” Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

The Amount of Access to Portfolio Managers May Interestingly Vary by Manager Some managers are used to dealing with huge institutions while others are more familiar with the needs of high net worth individuals Comments -- Some managers will be more familiar with family dynamics, tax issues, estate planning, and charitable contributions Sometimes clients can participate in conference calls but managers can not talk to 4,000 $25,000 accounts to get to $100 million Source: 10/14/02 Bob Veres Newsletter (Financial Planning); 11/01 Financial Planning; Tiburon Research & Analysis

It is Important to Evaluate a Separate Account Managers List From Financial Advisors’ Perspective Comments -- Source: 12/00 Investment Advisor; Tiburon Research & Analysis

Separate Account Managers List Considerations Financial Advisors Should Consider Evaluating Separate Account Managers Lists Based on Adequate Asset Class Coverage, the Variety of Managers, the Inclusion of Managers that Cover Special Needs, if Managers Pay to Play, and the Process for Requesting New Managers Separate Account Managers List Considerations Adequate Coverage Variety of Managers Cover Special Needs Managers Pay to Play New Manager Process Adequate asset class coverage? Adding products such as hedge funds, venture capital, and private equity? Variety of managers in each class? Managers cover special needs such as tax-efficient, concentrated portfolios, or willingness to accept existing securities? Do managers pay to play? Process for requesting a new manager? Source: Tiburon Research & Analysis 196 196

The Process of Completing Due Diligence on Separately Managed Accounts (SMAs) Managers is Difficult Comments -- Source: 11/2/02 SunTrust Presentation (O’Reilly); Tiburon Research & Analysis

Number of Managers Used Per Client Almost Half of Full-Service Brokers Use One Separate Account Manager Per Client, and Another One-Third Use Just Two or Three, Hence Clients Get Limited Diversification Another source said that half of accounts use a maximum of three managers Number of Managers Used Per Client Another source said that one potential result of using too few managers is being caught on the wrong side of style drift; the best advisors use a combination of separately managed accounts and mutual funds to cover all asset classes Source: 11/7/03 Legg Mason Advisor Conversation (Rosenfield); 11/7/03 Legg Mason Advisor Conversation (Castle); 11/7/03 Legg Mason Advisor Conversation (Graham); 11/6/03 Legg Mason Advisor Conversation (Barnhill); 11/6/03 Legg Mason Advisor Conversation (Davidov); 11/6/03 Legg Mason Advisor Conversation (Lopez); 11/5/03 Legg Mason Advisor Conversation (Rafalko); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) are Less Regulated and Generally Lack Audited Performance Track Records Comments Regulation Not Needed “We have taken steps to insure that these products are actually more conservative than mutual funds; we overstate our net fees in all literature so that investors are not taken by surprise” Regulation on the Horizon “Separately managed accounts may be less regulated today, but tomorrow could bring sweeping change” Source: 4/1/04 PIMCO Conversation (Patrick); 3/30/04 Morgan Stanley Conversation (Haynes); 6/02 Ticker; 8/9/00 Money; Tiburon Research & Analysis

Reasons for Similar Manager Lists Between Sponsors Many of the Leading Separately Managed Account (SMA) Program Sponsors Have Similar Manager Lists Because Both New Sponsors Tend to Pick the Same Managers as Previously Established Sponsors and Costs Lead to Sponsors Concentrating their Efforts Separate general pages that follow from program specific pages Reasons for Similar Manager Lists Between Sponsors New Sponsors Pick Established Sponsor’s Managers Costs Lead to Sponsor Concentration The new sponsors see which managers are being used by the large established sponsors and gravitate to them If the same money manager is offered in two separate programs, it becomes simpler to move a client from one program to another Wirehouses can only work with the largest managers who can handle their flow Adding managers has a cost for the sponsors so many concentrate their efforts Source: 11/01 On Wall Street; 12/26/00 Business Week; 11/13/00 Mutual Fund Market News; 11/00 On Wall Street; 9/18/00 Institute for International Research (IIR) Conference Presentation (Reinhart); 9/18/00 Institute for International Research (IIR) Conference Presentation (Reinhart); 8/9/99 Investment News; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Over Two-Thirds of the Managers Across Programs are Consistent at the End of the Day Separately Managed Account (SMA) Programs Manager Overlap Across Leading Programs Source: 7/01 Inside Institutions Newsletter; Tiburon Research & Analysis

Many Program Sponsors Feature Some of their Own In-House Offerings, Further Limiting Available Slots to Outside Managers Program sponsors increase profits through in-house managers as they are able to collect both the sponsor fee as well as the asset management fee; the trend toward use of in-house managers is expected to grow Comments -- Source: 3/19/03 Wealth Management Letter (Cerulli Associates); 7/01 Inside Institutions Newsletter; Tiburon Research & Analysis

Opportunities for New Managers can Appear Limited Because Sponsors are Hesitant to Drop Managers Sponsors like to view managers as long-term partners Comments Sponsors invest a great deal of time in each manager -- Source: 7/01 Inside Institutions Newsletter; Tiburon Research & Analysis

Separately Managed Accounts Managers By Propensity to be Terminated One-Third of Money Managers are Terminated from their Position with Companies Old data Separately Managed Accounts Managers By Propensity to be Terminated Source: 11/1/07 Dow Jones Newswire; Tiburon Research & Analysis

The Increased Focus on the Core & Explore Strategy could Also Limit Available Assets Delete? Comments Financial advisors build portfolio that tracks one of the indexes (core) and then hires active managers for the less picked-over asset classes (explore); typically allocates 30%-60% of assets to the core and the rest is spread among no more than six active managers -- Source: 11/03 On Wall Street; 10/13/03 Money Management Executive; 7/03 Money; 5/03 Bloomberg Wealth Manager; Tiburon Research & Analysis

206 Core & Explore Strategy Benefits The Benefits of the Core & Explore Strategy Include Performance, Decreased Paperwork, More Efficient Transactions, Lower Costs, and Decreased Rebalancing Complexities Delete? Core & Explore Strategy Benefits Performance Advantage Decreased Paperwork Efficient Transactions Decreased Rebalancing Lower Costs Performance advantage of combining active and passive investment styles in one account Decreased amount of paperwork Avoids inefficient transactions (e.g., growth manager sells slow performer at the same time a value manager buys the same stock) Lower overall cost (index funds and exchange traded funds (ETFs) have lower expense ratios) Decreases rebalancing complexities Source: 11/03 On Wall Street; 10/13/03 Money Management Executive; 7/03 Money; 5/03 Bloomberg Wealth Manager; Tiburon Research & Analysis 206 206

Core & Explore Strategy Concerns The Core & Explore Strategy Has Two Concerns, Including that Clients Tend to Favor Either Active or Passive Investing, and Clients May Question the Value of the Financial Advisors Delete? Core & Explore Strategy Concerns Concentrated Investment Style Question Advisor Value Most clients tend to be interested in either active or passive investing, not both Clients may question the value of the advisor Source: 11/03 On Wall Street; 10/13/03 Money Management Executive; 7/03 Money; 5/03 Bloomberg Wealth Manager; Tiburon Research & Analysis

Managed Account Program Managers Program Fortification But there are Numerous Opportunities for Managers, Including Larger Rosters, Program Fortification, Scandal Vacancies, & the Need for Performance (Page 1) Managed Account Program Managers Opportunities Larger Rosters Program Fortification Scandal Vacancies Need for Performance Three-quarters of programs increased manager rosters in 2003 Sponsors want to fortify programs to protect against blow ups Recent mutual fund scandals have led to openings Poor investment performance leads to some openings Source: 12/16/03 FRC Presentation (Evans); Tiburon Research & Analysis 208 208

Opportunities for Managed Account Program Managers (Page 2) Expanding Programs Differentiation Managers Pulling Out Maintain Control Sponsors are expanding their programs in areas outside of large cap equities Sponsors are trying to find unique managers to differentiate their programs A few managers are pulling out of programs or deciding not to enter at all Program sponsors want to maintain control by managing asset flows to managers Source: 12/16/03 FRC Presentation (Evans); Tiburon Research & Analysis 209 209

Opportunities for Managed Account Program Managers (Page 3) New Programs -- -- -- There are dozens of new programs being formed for new distribution channels like independent broker/dealers, insurance companies, CPA & law firms, and banks -- -- -- Source: 12/16/03 FRC Presentation (Evans); Tiburon Research & Analysis 210 210

Almost Three-Quarters of Programs Increased Manager Rosters Another source said that the programs that were adding managers increased by an average of 4.3 relationships in 2003 Separately Managed Account (SMA) Programs Manager Roster Changes Another source said that the programs that scaled back manager lists terminated an average of 4.5 relationships in 2003 Source: 12/16/03 FRC Presentation (Evans); Tiburon Research & Analysis

Many Program Sponsors are Seeking to Fortify their Programs to Cover any Unexpected Problems with their Managers Sponsors want to make sure that each asset class has multiple managers in case of blow-ups Comments -- Source: 10/10/02 Fund Fire; Tiburon Research & Analysis

Poor Investment Performance Leads to Some Openings Replace poor performing managers Comments -- Source: 7/01 Inside Institutions Newsletter; Tiburon Research & Analysis

Many Separately Managed Account (SMA) Programs Use Six-to-Twelve Asset Classes; Large Cap Equity is the Dominant Category in Terms of Assets Under Management Comments Large Cap Equity Domination “The leading asset class for us is clearly large cap equities and we are probably a little more value oriented” “I would say that we are top heavy on large-cap value products with about 20% of our assets in this asset class” “We use twelve asset classes; large cap equities dominate” “We probably cover a dozen asset classes, with large cap core and increasingly large cap value being the largest asset classes” “Definitely large cap is by far the biggest portion of our assets. Within our model portfolios, large cap value funds over large cap growth. It is the same on the separate account side” “For the most part, our accounts favor large cap funds and specifically we are more value oriented” “We probably have about 45% of our assets in large cap core equity” “On the both the mutual fund as well as the separate account side, the large cap equity products have the largest concentration” “I would say that about 35% of our assets are in domestic large cap equity products” “I think we have about 20% of our assets in a large cap value product Other Asset Classes “We have just started so we only use six asset classes” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/19/01 Wachovia Securities Conversation (Oreilly); 10/19/01 Assante Conversation (Carson); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/18/01 BAM Conversation (Swedroe); 10/18/01 Fund Quest Conversation (Clift); Tiburon Research & Analysis

Program Sponsors Added a Wide Variety of New Investment Strategies to Programs in Recent Years Attempting to fill out the investment choices in their programs and capture more of investors’ asset allocation pie Comments -- Source: 9/30/02 Institute for International Research (IIR) Conference Brochure; 12/24/01 Fund Marketing Alert; 7/01 Inside Institutions Newsletter; Tiburon Research & Analysis

Financial advisors may also request Program Sponsors are Rapidly Increasing the Variety of Asset Classes Used within Separately Managed Account (SMA) Programs Those that bring new investment styles to the sponsor’s attention will succeed Comments -- Financial advisors may also request Source: 9/30/02 Institute for International Research (IIR) Conference Brochure; 12/24/01 Fund Marketing Alert; 7/01 Inside Institutions Newsletter; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Assets Under Management Large Cap Equity Managers Dominate All Programs, Capturing Half of All Assets Under Management Copy to SMA issues? Separately Managed Account (SMA) Programs Assets Under Management By Investment Style Another source suggested that large cap equity accounts for 40% of separately managed account assets, followed by international/global (21%), balanced (11%), mid-cap (3%), and small-cap (2%), with the remaining 23% in various other classes Source: 11/03 On Wall Street (Cerulli Associates); 9/22/03 Money Management Executive; 10/16/01 CDC Email (Jarrett); Tiburon Research & Analysis

Separately Managed Account (SMA) Program Additionally, Large Cap Equity Continues to Gather Over Half of Separately Managed Account (SMA) Net Flows Separately Managed Account (SMA) Program Net Flows By Investment Style Source: 7/03 Ticker Money Management Institute (MMI); Tiburon Research & Analysis

Separately Managed Account Program Managers In Separately Managed Account (SMA) Programs, the Number of Managers is Highest in Large Cap Equities Separately Managed Account Program Managers By Investment Style Large Cap Equities Small Cap Equities Fixed Income International Smith Barney 23 8 5 3 Wells Fargo Advisors 16 12 6 Source: 10/19/01 Legg Mason Conversation (Lavin); 10/19/01 Wachovia Securities Conversation (Oreilly); 10/16/01 CDC Email (Jarrett); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Twenty-Three Different Firms Received at Least One Vote as Favorite Separate Account Manager; Four Firms Received Two Votes, Including Brandes, Lazard, Navalier, & Rittenhouse Other firms received one mention, including Martingale Asset Management, McKinley Capital, MJ Whitman, National Asset Management, Parametric, Rorer, Roxbury Capital, Systematic, TCW, Tom Johnson, & Wasatch Separately Managed Account (SMA) Programs Favorite Separate Account Managers Source: 10/19/01 Assante Conversation (Carson); 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/18/01 BAM Conversation (Swedroe); 10/18/01 Fund Quest Conversation (Clift); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Van Arkel); 10/16/01 Prima Conversation (Watson)); Tiburon Research & Analysis

Comments Helped Explain the Wide Variety of Favorite Separate Account Managers, with Some Pointing to Performance and Others to Service Comments Nuveen Rittenhouse “Rittenhouse would be my favorite because they really support the separately managed account business; they are very strong at educatING Group Brokers about their products and help build their business” “I think my three favorite managers are Brandes, Rittenhouse, and Rorer. I like all three for the same reasons. They are high quality people, with consistent performance, who hold well in down markets, they provide great support to our brokers, and they are very responsive” Others “John Hancock has great experience and a solid track record; they also listen to the clients’ needs” “I like Roxbury Capital, Davis, and Navalier, because they each do a great job of wholesaling to our brokers and helping them market” “My favorite separate account manager currently is MJ Whitman. They have a great value product that will do extremely well in this environment” “My favorite manager is a small fixed income shop in Madison, Wisconsin called Holdsmith & Yates. I like their process and their principles for investing” “Capstone Asset Management would probably be my favorite separate account manager” “Lazard does a really good job in the global equity market and they have a very tenured management team. Systematic does a great job in the small and small to mid cap area, with a very quantitative process. Finally, we also like National Asset Management. I have had a relationship with them for about six years, they have a great ability to think differently than the Wall Street firms” “I like Brandes because of their international strategy of investing into beaten down countries, trying to find the one or two good products. I like Martingale because it is very easy to fit into a portfolio. And I like Keeley because they are a unique niche player” “My three favorite managers are: Parametric, Navellier, and Wasatch Advisor” “TCW (large cap growth), Lazard (large cap value), and Brinson Partners (international equity), are the three preferred managers by Rogers Casey in their asset classes” Source: 10/19/01 Assante Conversation (Carson); 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/18/01 BAM Conversation (Swedroe); 10/18/01 Fund Quest Conversation (Clift); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Van Arkel); 10/16/01 Prima Conversation (Watson)); Tiburon Research & Analysis

Separate Account Managers Investment Performance Separate Account Managers will Win Market Share through Marketing Assistance, Service, Problem Resolution, & Investment Performance Separate Account Managers Competitive Factors Marketing Assistance Problem Resolution Investment Performance Service -- -- -- -- Source: 11/12/04 Citigroup Presentation (Parker); Tiburon Research & Analysis

Separately Managed Account Program Sponsors By Share of Assets Favorite Separate Account Managers Tend to Get 5%-to-25% of Assets in Separately Managed Account (SMA) Programs Separately Managed Account Program Sponsors By Share of Assets With Favorite Separate Account Manager Source: 10/19/01 Assante Conversation (Carson); 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/18/01 BAM Conversation (Swedroe); 10/18/01 Fund Quest Conversation (Clift); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Van Arkel); 10/16/01 Prima Conversation (Watson)); Tiburon Research & Analysis

The Reliance on Favorite Separate Account Managers can be Explained through Comments, with Some Saying they Try to Limit Concentration Comments Heavy Concentration “We have about 20% of our total assets with John Hancock Advisors” “Rittenhouse probably has about 20% of our separate account assets; they are the most popular manager we use” “Brandes has about 20% of our assets and Rorer has another 10%” Limited Concentration “I think Roxbury has the most assets with about 12%, Davis has 9%, and Navalier has 4%” “Since it is more difficult to transition out of a separate account manager, we try not to concentrate assets; we probably only have less than 5% with our favorite manager” “We have about 4% of our assets with Holdsmith & Yates” “Capstone probably has about 10% of our assets but they are by far the biggest concentration” “We probably have about 10% of our assets with Lazard, since global investing has been a fairly recent mandate for us. Systematic probably has about 20% of our assets and National Asset Management has only about 3-4% of our assets, but they are a recent addition for us” “We have about 10% of our assets with Brandes; they are probably the largest concentration; we have about 2-3% with Martingale and 1% with Keeley Asset Management” “We have about 14% of our assets with Lazard and 13% each with TCW and Brinson” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 Centurion Conversation (Brown); 10/17/01 Run Money Conversation (Kitchens); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Van Arkel) 10/15/01 LPA Conversation (Zentner); 10/15/01 Wachovia Securities (Granzow); 10/12/01 Thomas Weisel Partners Conversation (Braitberg); Tiburon Research & Analysis

Financial Advisors Agree that About 15% of Assets Go to their Favorite Manager Share of Separately Managed Account Assets Placed with Favorite Manager Average 15% Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 Centurion Conversation (Brown); 10/17/01 Run Money Conversation (Kitchens); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Van Arkel) 10/15/01 LPA Conversation (Zentner); 10/15/01 Wachovia Securities (Granzow); 10/12/01 Thomas Weisel Partners Conversation (Braitberg); Tiburon Research & Analysis

Discretionary Versus Non-Discretionary Program Offers Many Program Sponsors Offer Both Discretionary and Non-Discretionary Programs Unbundle Discretionary Versus Non-Discretionary Program Offers Discretionary Both Non-Discretionary “We manage money” “We are given the discretion from our clients to pick managers and mutual funds and to allocate them across asset classes” “We have programs set up where we are the one with the discretionary powers to choose mutual funds for the broker and we also have a product where the broker chooses these products” “We offer our mutual fund wrap where we have the discretion and in the separate account wrap it is the broker that retains the discretion” “We really do both types of money management. Our institutional clients generally decide whether they are looking for discretionary or non-discretionary management” “We manage money both ways, however, even when we have discretion over an account, we’ll act as if we do not; we only like to trade funds or rebalance portfolios once we have talked to the advisor” “ We manage money on both a discretionary basis as well as on a non-discretionary basis. For separate accounts, it is the advisor who makes the investment selection, we just present them with options, while on the mutual fund side we have full-discretion” “We allow the advisor to retain the discretion over an account or to transfer the discretion to us” “The client is in control” “On both our mutual fund and SAM wrap it is the client who makes the final decision” “The ultimate decision is made by the advisor, we just present a set of investment options to the advisor” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/19/01 Wachovia Securities Conversation (Oreilly); 10/19/01 Assante Conversation (Carson); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/18/01 BAM Conversation (Swedroe); 10/18/01 Fund Quest Conversation (Clift); Tiburon Research & Analysis

Many Program Sponsors Have Difficulty Filling Capacity Constrained Asset Classes Few small cap managers are willing to participate at the fee levels demanded Comments -- Source: 9/30/02 Institute for International Research (IIR) Conference Brochure; Tiburon Research & Analysis

There Seems to be Some Difficulties in Finding Both High-Yield Bond and Tax-Efficient Managers Another source said that other areas in need include momentum growth, deep value, mid-cap equities, and small-cap equities Manager Gaps -- -- -- -- Source: 10/1/02 Smith Barney Presentation (Campanale); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

On the Other Hand, it is Possible that All Fixed Income Slots Have Been Filled Investors have flooded the fixed income market due to the risky equity markets Comments Overall market share for fixed-income vehicles with the universe of investment options for separately managed accounts may have finally maxed out -- Source: 10/16/03 Investment Management Weekly; 9/30/02 Institute for International Research (IIR) Conference Brochure; Tiburon Research & Analysis

There is Some Industry Discussion About whether Program Sponsors Should Diversify and Use a Wider Variety of Separate Account Managers Comments -- Source: 9/30/02 Institute for International Research (IIR) Conference Brochure; Tiburon Research & Analysis

Former Separate Account Managers Trainer, Wortham, & Company Several High Profile Managers Have Pulled Out of the Separately Managed Accounts (SMA) Market, Including Ashland Management & John Hancock (Page 1) Former Separate Account Managers Ashland Management State Street Research Trainer, Wortham, & Company John Hancock CEO: Charles Hickox Sold $600 million assets under management managed accounts managed through Merrill Lynch to Mellon because it was too labor intensive for the financial return Believed that brokers were too demanding of the time of portfolio managers Based in Boston, MA $19 billion assets under management 138 employees in department Decided to allocate all resources into institutional money management (core business) Limited layoffs; many transfers Based in Boston, MA Subsidiary of Met Life $46 billion assets under management 2/3 of assets are institutional CEO: Dick Davis CIO: Kim Goodwin Recent performance issues Small staff Exited the separately managed accounts business Gave money back Left business in 2002 Source: 12/16/03 Champion Partners Presentation (Champion); 11/03 On Wall Street; 1/6/03 Fund Marketing Alert; 12/9/02 Investment News; 10/7/02 Barron’s; 10/1/02 Forward Presentation (Duff); Tiburon Research & Analysis

Former Separate Account Managers (Page 2) -- -- -- -- -- -- -- -- Source: Tiburon Research & Analysis

Some Managers Have Decided Not to Enter the Separately Managed Accounts (SMA) Business Because it is Not Profitable Enough Separately Managed Accounts (SMAs) Managers Deciding Not to Enter Business Scudder Investments -- $55 billion in mutual fund assets Determined that the significant financial commitment necessary to succeed in separately managed accounts was not profitable -- Source: 4/7/03 Investment News; Tiburon Research & Analysis

Leading Mutual Fund Companies and Separate Account Managers Very Few Money Managers are Leaders in Both Mutual Funds and Separate Accounts Engemann Asset Management and Rittenhouse took Major Pay Cuts to Capture the First Mover Advantage During the Early Days of Separately Managed Account (SMA) Programs Leading Mutual Fund Companies and Separate Account Managers Leading Mutual Fund Companies Leading Separate Account Managers American Funds Fidelity Investments The Vanguard Group Brandes Nuveen Rittenhouse Roger Engemann Another source said that Legg Mason is one of the few firms that is a strong competitor in both markets Source: 11/12/04 Citigroup Presentation (Parker); 9/01 Investment Consulting News; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Manager Fees Across All Program Sponsors and in All Investment Styles Have Decreased in Recent Years Needs Update Separately Managed Account (SMA) Programs Average Manager Fees (Basis Points) Another source said that high performing managers in some select asset classes may be able to demand higher fees Source: 2/06 McKinsey Quarterly; 12/15/03 Trivium Consulting Presentation (MacKillop); 9/29/03 Trivium Consulting Presentation (MacKillop); 9/22/03 Money Management Executive; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Fees Paid to Separate Account Managers Average 45-to-50 Basis Points for Equity Managers and 30-to-35 Basis Points for Fixed Income Managers Separately Managed Account (SMA) Programs Average Manager Fees by Investment Style (Basis Points) Average 45 Source: 9/22/03 Money Management Executive; 10/21/02 Investment News; 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/16/01 CDC Email (Jarrett); 10/15/01 Wachovia Securities Conversation (Granzow); 10/12/01 Thomas Weisel Partners Conversation (Braitberg); 10/12/01 HD Vest Financial Services Conversation (Smith); Tiburon Research & Analysis

Wirehouses Have Been the Most Successful at Driving Down Manager Fees Needs Update Separately Managed Account (SMA) Programs Average Wirehouse Manager Fees (Basis Points) Unbundle Another source said that the norm for large cap equity managers had been 50 basis points but now it is quickly approaching 30 basis points; institutional investment managers contemplating entering a separately managed account program have to consider the fact that they will be offering their investment capabilities that have been priced at 75-100 basis points for large institutions to this new, and arguably more demanding, retail audience for just 30-50 basis points Another source said that in 2001, Merrill Lynch lowered large cap equity managers from 50 basis points to 41 basis points, small cap equity managers to 46 basis points, and fixed income managers to 29 basis points; in 2001, Wachovia cut large cap equity managers to 45 basis points on the first $100 million and 40 basis points thereafter ; in 2002, Merrill Lynch and Morgan Stanley moved to paying just 37 basis points on large cap equities; others will likely follow; Source: 9/29/03 Trivium Consulting Presentation (MacKillop); 3/03 Financial Planning; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Wirehouses Pay 38 Basis Points for Equity Managers while Many TAMPs Pay 50 Basis Points Separately Managed Account (SMA) Programs Average Equity Manager Fees by Market (Basis Points) Source: 12/15/03 Trivium Consulting Presentation (MacKillop); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs Wirehouses Pay 25 Basis Points for Fixed Income Managers While Many TAMPs Pay 35 Basis Points Separately Managed Account (SMA) Programs Average Fixed Income Manager Fees by Market (Basis Points) Source: 12/15/03 Trivium Consulting Presentation (MacKillop); Tiburon Research & Analysis

Program Sponsors are Keeping the Money Generated by Manager Fee Cuts to Maintain Revenues and Margins Instead of Passing the Subsequent Savings on to Clients Will likely result in a compromise in product quality or manager departures Comments -- Source: 3/03 Financial Planning; Tiburon Research & Analysis

Boutique Managers do Not Want to Depend on Hot Dollars from Brokers Comments -- Source: 6/02 Ticker; Tiburon Research & Analysis

Some Best in Class Managers are Not Participating Comments -- Source: 10/1/02 Forward Presentation (Duff); Tiburon Research & Analysis

Larger Managers are Not Emphasizing the Independent Advisor Markets Comments -- Source: 12/15/03 Financial Research Associates (FRA) Conference Brochure; Tiburon Research & Analysis

As each manager raises more assets, program sponsors pay less Program Sponsors want Managers to Get Enough Money from their Programs to be Happy But Not too Much to Have Power As each manager raises more assets, program sponsors pay less Comments -- Fewer managers raising more assets is more economical for the program sponsors Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

The Number of New Slots is Substantial; with Eight New Programs and 30 Slots Each, there are 240 New Opportunities Annually Comments -- Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Money Managers Must Market to Program Sponsors in Order to Win Approval and Gain Access Set realistic goals Comments Need to have staying power; may take 3-5 years to successfully gain access to sponsor programs -- Source: 12/16/03 Champion Partners Presentation (Champion); Tiburon Research & Analysis

Program Sponsors Evaluation Factors Managers Need to Consider Many Factors in Evaluating Potential Sponsors, Including their Commitment & Stability, Fee Structure, Pricing & Minimums, Technology, Training, & Back-Office Support, and Due Diligence Requirements Program Sponsors Evaluation Factors Commitment and Stability Technology, Training, & Back-Office Support Due Diligence Requirements Fee Structure Pricing & Minimums -- -- -- -- -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); Tiburon Research & Analysis

Managers Should Focus Efforts and Consider the Right Number of Programs to Enter Comments -- Source: 4/7/03 Investment News; 1/6/03 Fund Marketing Alert; Tiburon Research & Analysis

Several Years Ago, Manager Success was Dependent Upon Getting on the Maximum Amount of Sponsor Programs Smaller managers had an average of five relationships; larger managers had an average of 31 relationships Comments -- Source: 4/7/03 Investment News; 1/6/03 Fund Marketing Alert; Tiburon Research & Analysis

Rising Costs Play a Significant Role in How Managers Distribute their Offerings Today The average number of relationships is shrinking, especially amongst larger managers Comments -- Source: 4/7/03 Investment News; 1/6/03 Fund Marketing Alert; Tiburon Research & Analysis

Constantly reevaluate the number of relationships with sponsor firms Due to the Increased Pricing Pressure, Managers Need to be More Thoughtful About Rationalizing Each of their Relationships Constantly reevaluate the number of relationships with sponsor firms Comments -- Source: 4/7/03 Investment News; 1/6/03 Fund Marketing Alert; Tiburon Research & Analysis

252 Firms Limiting Program Relationships Some Firms are Beginning to Limit their Number of Program Relationships, Including Independence Investments and Century Capital Management Firms Limiting Program Relationships Independence Investments Century Capital Management -- -- -- -- -- -- Source: Tiburon Research & Analysis 252 252

Separate Account Managers The Average Number of Sponsor Relationships Ranges from Fourteen-to-34 Depending on Manager Size Not Tiburon format Separate Account Managers Average Number of Program Sponsor Relationships By Manager Size Source: 4/7/03 Investment News; 3/31/03 Investment News (FRC); 1/6/03 Fund Marketing Alert; Tiburon Research & Analysis

Separate Account Managers The Largest Managers Have Increased their Number of Program Sponsor Relationships in Recent Years from 31-to-34 Needs Update Separate Account Managers Average Number of Sponsor Relationships Amongst Managers with at Least $5 Billion Assets Under Management Source: 4/7/03 Investment News; 3/31/03 Investment News (FRC); 1/6/03 Fund Marketing Alert; Tiburon Research & Analysis

Separate Account Managers Mid-Tier Managers Have Doubled their Number of Sponsor Relationships in Recent Years from Seven-to-Fourteen Needs Update Separate Account Managers Average Number of Sponsor Relationships Amongst Managers with $5.0 Billion Assets Under Management Source: 4/7/03 Investment News; 3/31/03 Investment News (FRC); 1/6/03 Fund Marketing Alert; Tiburon Research & Analysis

Separate Account Managers By Status of Program Sponsor Relationships Almost Three-Quarters of Managers Plan to Increase their Number of Sponsor Relationships Separate Account Managers By Status of Program Sponsor Relationships Source: 4/7/03 Investment News; 3/31/03 Investment News (FRC); 1/6/03 Fund Marketing Alert; Tiburon Research & Analysis

Managers Tasks for Ease of Sponsors Managers Need to Make it Easy for Program Sponsors to Find them by Participating in Vendor Databases, Keeping Data Updated, and Participating in Organizations Managers Tasks for Ease of Sponsors Vendor Databases Updated Data Organizations Mobius Morningstar Nelson’s PSN Keep data updated or otherwise sponsors will see this as a message of non-interest Participate in industry organizations like MMI and IMCA Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Separate Account Programs Separate Account Managers Screening is the Dominant Way that Program Sponsors Find New Separate Account Managers Separate Account Programs By Method of Finding Separate Account Managers Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation; (Van Arkel); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

Some Comments Help Explain the Reliance on Screening for Separate Account Managers, with Some Saying they Add Managers Based on a Screening Process Only Comments Add Managers Based on Screening Alone “We add new managers based on our screening process only” “We only use screens to find new separate account managers” “Most of the time we use screens to find managers, but we also seek out ones that we know other programs have to be competitive in recruiting” “The way we find most of our managers is through quantitative analysis. Beyond this, however, we also add managers which are very popular and exist in most TAMP programs; we have these managers so advisors can easily transfer their assets onto our platform” “We really just use screens to find new managers; we seldom take a manager who calls on us” Add Managers Based on Other Methods “For the most part, we just took our Level 1 mutual fund sponsors that had platforms for separately managed accounts, then we added a few other managers we heard about to round out the asset classes” “I would say that in the majority of the cases we find managers through our research looking for them, but in some cases they come to us” “We uses databases to find suitable candidates and then we go to them” “We have probably three ways in which we find managers. Probably most often we find managers through our searches. We also find managers when they call us; we are very open to talking to managers. Finally, we have clients coming to us with special needs; in which case we attempt to find them solutions for their specific needs” “We have Barra Rogers Casey do all the screening for the managers; they than come back to us and give us a list in each asset class that we have to decide on” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation; (Van Arkel); 10/17/01 Greenrock Conversation (Malone); 10/17/01 Run Money Conversation (Kitchens); Tiburon Research & Analysis

Separate Account By Sources of Clients Separate Account Managers Point to Platforms and Databases as the Primary Sources for New Clients Separate Account By Sources of Clients Source: 1/00 Financial Advisor; Tiburon Research & Analysis

Separate Account Managers Point to Platforms and Databases as the Primary Sources for New Clients Comments Platforms “I expect via similar organizations such as Schwab and Smith Barney there are others like Bear Stearns and Dain Rauscher and others. Schwab is appealing to the smaller RIAs” “Most get it from Money Manager Review or Schwab, probably they do the research from the platform they are on. I think most of them look at straight performance not things like volatility; and we have done well on performance lately, but they should be looking into it better” Database “There are databases like Mobius and PSN. PSN is probably not as well known, it is mostly for institutional investors and is made by Effron. Many also find out about us through the platforms. We are marketing to them and directly. Nelsons and Intersec, but primarily it is Mobius and Nelson’s” “Some use Mobius through MAC. Most prefer to bypass Schwab's MAC cost and do not think Schwab cares as long as Schwab gets the AUM and trades. Right now MAC is half pregnant with Schwab” “I get the feeling that we get a lot of referrals from Nelson's; they call us cold” “We provide a due diligence package, but the majority do not do due diligence. I would say that it is based more on relationships. Lots of people get the data from MAC and go from there. They do a good job presenting data. I think the bigger the name, the less due diligence that will be done. It is really based on relationships. Most of the people are used to mutual fund sheets and assume that the data is correct. Most people assume that Schwab is checking the data because their reputation is on the line” Source: 1/00 Financial Advisor; Tiburon Research & Analysis

By Technology Used to Screen Separate Account Managers A Wide Variety of Technology Resources are Used to Screen Separate Account Managers, Including Mobius, Nelson’s, & PSN Program Sponsors By Technology Used to Screen Separate Account Managers (Number of Mentions) Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation; (Van Arkel); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

Comments Help Explain the Reliance on Mobius, Nelson’s, and PSN/Effron for Separate Account Manager Selection Comments Databases “We use Barra Rogers Casey to screen for separate account managers” “We use Plan Sponsor Network, Nelson, Mobius, and even Security APL” “On the separate account side we use Mobius and Zephyr” “We screen most of our managers predominantly through PSN/Effron” “We predominantly use M-search by Mobius and Nelson’s Directory” “We use several databases. We use Mobius, Nelson, PSN, and we also have access to Citigroup’s research department on separate accounts” “We use predominantly Mobius; we used to use Nelson but we do not anymore” “We use probably four or five different databases such as Barra Rogers Casey” “We use Mobius and we used to use Nelson to screen for managers. We also get a download from S&P Compustat, which provides us with all the managers’ holdings. We import this holdings data electronically on the back-end and then we work with this data” “We use Barra Rogers Casey to do all the due diligence on the managers” Other Methods “We just look to our Level 1 sponsors to offer separate account management” “We predominantly use Mobius and Vestec to do most our research; they are on our system today” “We really try to look to as many sources as we can in order to get a wide range of managers” “A lot of companies are now trying to do this like AssetMark. Separately managed accounts are becoming more and more popular. We like to get our hands dirty and do all the leg work ourselves. The typical advisor does not have the experience to filter through all the managers. Information on Schwab is too minimal, while the data on Mobius is too much for the average advisor. It is not as easy as Morningstar and 5-star funds. I think there is a need for it out there. The only question is if the advisors would use a Lockwood or Portfolio Management Consultants (PMC)” “I used to sit on Russell Investment Group's advisory board and I know what it takes to research separate accounts so I can not understand why people would do it when they can get great information from Morningstar” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation; (Van Arkel); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

Most Desirable Services in Manager Selection Tools Due Diligence & Advisory Comments and Attribution Analysis are the Most Desirable Services for a Manager Selection Tool Most Desirable Services in Manager Selection Tools (Number of Mentions) Source: 1/00 Financial Advisor; Tiburon Research & Analysis

Comments Help Explain the Importance of Requests for Proposal, Attribution Analysis, and Due Diligence & Advisory Comments Comments Requests for Proposal “The RFP, the risk and return analysis, and the best managers list, that is all very important” “The RFP would be quite useful” “The RFP is of limited value; that stuff is kind of a giveaway” Attribution Analysis “I really want attribution analysis and the qualitative on the managers” “The Big five and MyCFO.com would be interested in the attribution analysis” “Very positive to have the attribution analysis, but it is something advisors need to know more about because they do not know what is driving performance” Due Diligence and Advisory Comments “I love things like the feedback from interviews, also love the mutual fund-type version of analysis based on the interviews. You need historical performance info and this is hard to find on separate account managers, as well as attribution. I would hope that interviews were done fairly often” “I think the advisory comments would be helpful. Anyone can make a recommendations list” “The due diligence is some thing that is important but we do that in house or we have a guy who does it” General Comments “Backtesting- you can throw that in the garbage. I would not spend two seconds looking at backtesting. The rest sounds like a typical laundry list” “You've got to have model portfolios and back testing as far back as you can go” “I think they sound all very appealing and very necessary” Source: 1/00 Financial Advisor; Tiburon Research & Analysis

Managers Should be Clear About what Makes their Firm Unique Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Need to Establish Credibility in the Eyes of Sponsors Manager Credibility Factors History & Experience Employee Ownership Tenure of Staff Commitment -- -- -- Long-term commitment to separately managed account business Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Need to Align their Product Offering with their Firm’s Uniqueness Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Need to Emphasize the Unique Aspects of their Firm Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Must Show Consistency and Discipline in their Investment Process Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Should Demonstrate Stability and Lack of Surprise Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers also Need to Differentiate from the Competition Managers with depth in multiple disciplines and products will ultimately win over the managers offering a single product Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Economies of scale in sales More productive meetings There is a Lot of Leverage with Offering More than One Product in a Sponsor’s Program From a Manager’s Perspective Economies of scale in sales Comments More productive meetings -- Source: 10/10/02 Fund Fire; Tiburon Research & Analysis

Managers Should Show Insights into the Sponsor’s Program and Manager Slate; Knowing the Competition is Key Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Should be Able to Identify Sponsor Program’s Strengths & Weaknesses and Have the Ability to Fill them Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Manager Sales & Education Process Areas Managers Must be Able to Clarify the Sales & Education Process, Including Needs, Ability to Fill, Unique Value Added, & Sales Model Manager Sales & Education Process Areas Needs Ability to Fill Unique Value Added Sales Model -- -- -- -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Need to Spend More Time Studying the Competition Knowing other managers in the program will allow for better positioning Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Must do their Homework on Operational Expectations; Experience is the Best Story Comments -- Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Need to be Proficient with Portfolio Management Systems Comments -- Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Should Have Specific Plans to Expand their Staff and Space to Accommodate Increased Assets Under Management Comments -- Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers Should Understand How Investment Models will be Deployed (e.g., own 250 stocks in a mutual fund versus 60 in a separately managed account) Comments -- Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Know the people and their personalities Managers Should Know the Materials that the Program Sponsors Give to Clients Explaining their Research Process Know the people and their personalities Comments -- Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Separate Account Manager Selection Includes Style Analysis and Quantitative Analysis Comments Style Analysis “We try to understand the manager’s style and understand how they make decisions on equities they buy. Also, we talk to the investment professionals at the firms to evaluate whether their thoughts are consistent with what they claim to be their investment style. Finally, we also do quantitative studies on managers, such as returns- and holding-based style analysis” “We do our SAM research much the same way we do our mutual funds research. The difference is that in this case we look for managers that have had conservative growth, we make sure that the manager’s holdings match their style, and finally we evaluate whether the manager understands the separate account business and their willingness to take smaller sized accounts” Quantitative Analysis “We start with running screens for quantitative aspects of managers to get a realistic list together. Then we have each manager still remaining fill out a lengthy questionnaire about their business, things like regulatory actions, the size of the firm, etc. After this step, we have the managers come to our office. In this case, you can tell a lot about the managers based on who they send to meet with us. We look for them to have an easily explainable story that our brokers can present to their clients. After this phase, we send one of our investment analysts to do some onsite due diligence and to write up the manager. At this point if the outcome is favorable, the manager is presented to the investment committee. This process on average takes about three months” “We have a three step process for selecting new separate account managers. First, we do a quantitative screening across the different asset classes looking for the top performers in each universe. Second, we will do a qualitative analysis by talking to their managers and employees. Finally, we perform a correlation analysis from the top managers to see how they will fit within our model portfolios” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/19/01 Wachovia Securities Conversation (Oreilly); 10/15/01 Wachovia Securities Conversation (Granzow); 10/12/01 Thomas Weisel Partners Conversation (Braitberg); 10/12/01 HD Vest Financial Services Conversation (Smith); Tiburon Research & Analysis

Experience, Track Record, & Interviews are Also Key Parts of Separate Account Manager Selection Comments Experience and Track Record “We first start with some sort of screening mechanism, checking for criteria like manager experience, PPS compliance on track record, SEC/legal issues, and their turnover rates. Then we make a list of viable candidates and finally we do some on-site due diligence” Manager Interviews “The first step in our process is to identify a mandate and we identify the appropriate benchmark. Then we use various databases and Citigroup’s research department to get a list of suitable candidates. Then we run a series of tests, to try to shrink the list. For separate account managers, we also do onsite due diligence and interviews with their investment professionals. After this phase, we submit our final candidates to the iMAC committee who makes the final decision” General Comments “On the separate account side the two steps are the same, however, in the quantitative phase we try to zero in on the manager’s portfolio holdings, since this data is more available and on the qualitative side we try to do a due diligence trip to their office to kick the tires a little” “We first construct a list of managers through the use of various databases; then we perform a returns based style analysis to narrow the list of managers; then we look to Barra to get their monthly portfolios for the past five to ten years, to be able to score their stock selection ability. Finally, when we have a narrow list, we perform a very lengthy interview process with the personnel at the firm to make sure that their investment thesis is concise and can be followed and to ensure that the firm is stable” “I think Barra Rogers Casey has a 52 step process in evaluating managers. I know they have about 1,800 managers reporting to them on a monthly basis reporting quantitative facts. On the qualitative side they also perform about 1,000 manager interviews every year. They have a really comprehensive and thorough process” “We have a five step process for selecting managers. First, we screen for a list of preliminary candidates; second, we do a rigorous performance analysis; third, we evaluate some qualitative factors; fourth, we have our investment committee review the managers; and finally we do on-going review of the managers once we selected them” Source: 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 Run Money Conversation (Kitchens); 10/17/01 Greenrock Conversation (Malone); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Van Arkel); 10/16/01 Prima Conversation (Watson); 10/15/01 LPA Conversation (Zentner); Tiburon Research & Analysis

Separately Managed Accounts Investment Selection is Different for Separately Managed Account (SMA) and Mutual Fund Programs Investment Selection Separately Managed Accounts (SMA) Mutual Funds Much harder to evaluate Few sources of reliable data -- Source: 9/30/02 Institute for International Research (IIR) Conference Brochure; 9/29/02 Morningstar Mailing; Tiburon Research & Analysis

Due Diligence is Both an Art and a Science, Including Both Quantitative and Qualitative Factors Due Diligence Factors Quantitative Factors Qualitative Factors Fundamental analysis Single-factor models Multi-factor models Added value Characteristics and returns-based style analysis Dispersion across accounts Management team/organization Experience Operations Defined investment process Systems & processes Legal & compliance issues Stability of employees Ownership structure Client servicing Compliance & ethics Source: 10/03 Registered Representative; 7/01 Financial Advisor; 6/30/00 Portfolio Management Consultants (PMC) Presentation (Yanari); 5/22/00 Northwestern Mutual Presentation (Mendelson); Tiburon Research & Analysis

Manager Selection Due Diligence Key Points Assets Under Administration The Center for Fiduciary Studies Highlights Several Key Points in the Due Diligence Process for Manager Selection, Including Performance, Product Inception Date, Correlation to Peer Group, and Assets Under Management (Page 1) Manager Selection Due Diligence Key Points Product Inception Date Correlation to Peer Group Assets Under Administration Performance Performance Relative to peer group Relative to assumed risk Inception date of product Holdings consistent with style Expense ratios or fees Stability of organization -- Source: 10/03 Center for Fiduciary Studies Report; Tiburon Research & Analysis

Manager Selection Due Diligence Key Points Manager Selection Due Diligence Key Points (Page 2) Manager Selection Due Diligence Key Points Holdings Consistent with Style Expense Ratios or Fees Stability of Organization -- -- -- -- -- Source: 10/03 Center for Fiduciary Studies Report; Tiburon Research & Analysis

Manager Selection Questions Additional Questions in Selecting Managers Should be Asked Regarding Performance Figures, Management, Time Until Fully Invested, Trading Procedures, & Tax Advantages Manager Selection Questions Performance Figures Trading Procedures Management Fully Invested Tax Advantages What are the manager’s retail versus institutional performance figures? Who will actually manage the account? How long will it take to be fully invested? What are the manager’s trading procedures? What particular tax-advantaged strategies are used? Source: 10/03 Registered Representative; Tiburon Research & Analysis

Separately Managed Account (SMA) Programs The Selection Process is Complicated But Performance, Style Adherence, and Manager Experience are the Most Important Criteria In Separately Managed Accounts (SMAs) Separately Managed Account (SMA) Programs By Single Most Important Criteria For Selecting Separate Account Managers Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation; (Van Arkel); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

Comments Support the Reliance on Performance, Style Adherence, and Manager Experience for Separate Account Manager Selection Comments Performance “Our most important criteria is a manager’s risk adjusted return as compared to a customized benchmark” “Probably the most important criteria for us is the manager’s probability of outperforming its benchmark (PSTAT)” Style Adherence “Style adherence is very important for us” “I would say that style consistency would be the most important criteria” “The most important criteria for us in evaluating managers is style consistency” “I would say that first and foremost we look for managers with a consistent style for investing” “The most important criteria for us is that the manager has to have a well defined, clearly articulated, and systematically implemented process. We want to make sure that the manager is systematic about their investment selection” “I think the most important criteria for choosing separate accounts is the consistency of style” “First and foremost we want a manager that has a very clearly defined investment thesis, with a rigorous process. We also want to make sure that they have the staff to support that” Experience “Probably the most important criteria for us was the level of experience our Level 1 sponsors had with their respective asset classes” “For us, the experience of the portfolio manager is the most important criteria” “We really look for the depth and experience of the investment team and organization when choosing SAM” Other “I think what it really comes down to for us is how much will the separate account manager will help distribute the product in the channel. We look for strong wholesaling and marketing assistance, all of which should help our brokers sell” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation; (Van Arkel); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

Separate Account Manager & Mutual Fund Company Style Adherence is the Dominant Separate Account Managers & Mutual Fund Companies Selection Criteria with Management Team Taking Second Place Separate Account Manager & Mutual Fund Company Selection Criteria (1-10; 10 = High) Other selection criteria ratings included three year performance (6.4), wholesaler support (5.3), value added (5.3), firm reputation (5.3), key account person (4.7), marketing literature (4.5), firm breadth (4.5), & one year performance (4.5) Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation; (Van Arkel); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

Comments Support the Reliance on Style Adherence Across Separate Account Manager and Mutual Fund Selection Comments Style Adherence “I think by far the most important criteria is style adherence” Management Team “I think the quality of the management team is very important, since their decisions will impact performance” “I think the quality of the management team is the most important because they are the ones who ensure that the investment discipline is implemented” Manager Longevity “I think a manager’s tenure only matters in certain asset classes” “We want to know that the manager is stable and that they do not have high employee turnover rates” Tax Sensitivity “Since our client base tends to be fairly tax conscious, this usually is a fairly important” 5 Year Performance “Five year performance for us is pretty important criteria. Specifically, it is important that the managers have consistent performance, who perform well in a down market” 3 Year Performance “Three year performance is often times more important to us than a five year performance, because there have been a lot of new funds that have popped up over the last couple of years. Also, a lot of time, it is hard to find managers that have been at the firm for five years” “I think it is a mistake to look at performance measures at one, three, or even five years because that is not even a complete market cycle. I do not think this timeframe allows us to evaluate repeatability” Wholesaler Support “To us wholesaler support is very important. On both the mutual fund and on the separate account side we want to know that the firms will help distribute their products” Key Account Manager “This criteria is pretty important. I need to know that I am able to get in contact with the manager” Marketing Literature “I think in the separate account world marketing literature really matters because at times it is pretty hard to find information on certain Separate Account Managers” “I think things like marketing literature, wholesalers and value-added services could all provide potential problems if we remove a manager from our platform. We do not want our advisors to develop too strong ties because of this potential issue” SAM/Mutual Fund Company Breadth “We only look for specific asset classes in fund families so it does not really mater how many asset classes they cover” “We do not care about how many products a given manager has; we are more focused on the quality of the product we select” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/18/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation (Behan); 10/17/01 EnvestnetPortfolio Management Consultants (PMC) Conversation; (Van Arkel); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

Manager Due Diligence Process Tasks Managers Must Manage the Due Diligence Process Like a Hawk, Including Review RFP, Build Agenda, Review Agenda Ahead of Time, Answer Difficult Questions, & Prepare Team Manager Due Diligence Process Tasks Review Agenda Ahead of Time Answer Difficult Questions Review RFP Build Agenda Prepare Team Personally review the RFP response Answer the questions More is better Build an agenda for visits that suits the research team’s needs Respond to all requests Schedule on a day where everyone is available -- -- Prepare the team on the due diligence criteria and the firm’s positions Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Managers May Want to Offer Some Limited Term Exclusivity to One or a Few Program Sponsors Comments -- Source: 2/7/02 Prudential Financial Presentation (Kinne); Tiburon Research & Analysis

Create focused sales effort Once in the Program, Managers Need to Get Wholesalers in the Field to Meet with Financial Advisors Create focused sales effort Comments -- Source: 12/15/03 Trivium Consulting Presentation (MacKillop); Tiburon Research & Analysis

Almost 400 Separate Account Managers Compete in the Separately Managed Accounts Market, Up Over 100% Since 2001 Needs Update Separately Managed Account (SMA) Programs Managers Another source said that there were only 100 managers Another source indicated that there were 250 managers in 2002; still another source indicated that there were 350 managers Source: 12/1/03 Money Management Executive; 11/03 On Wall Street (Cerulli Associates); 6/03 On Wall Street Money Management Institute (MMI); 4/21/03 Fund Marketing Alert; 8/19/02 Investment News; 11/01 On Wall Street; 11/28/00 HD Vest Financial Services Meeting (Klein); Tiburon Research & Analysis 297 297

Program Sponsors & Money Managers’ Money Manager Strategic Advice Program Sponsors & Money Managers Said that Maintain Good Performance & Helping with Wholesaling Efforts are Some of the Best Strategies for Money Managers Program Sponsors & Money Managers’ Money Manager Strategic Advice (Number of Mentions) Source: 11/14/06 Envestnet Conversation (Grinis); 11/10/06 SEI Investments Conversation (Schaeffer); 11/10/06 Envestnet Conversation (Hardwick); 11/9/06 US Fiduciary Conversation (MacKillop); 11/9/06 Capital Markets Consultants Conversation (Mendelson); 11/9/06 Harpeth Partners Conversation (Johnson); 11/7/06 Envestnet Conversation (O’Brien); 11/7/06 Greenrock Research Conversation (Malone); Tiburon Research & Analysis

Program Sponsors & Money Managers Said that Money Manager Strategic Should Focus on Performance and Wholesaling Comments Maintain Good Performance “Nothing replaces eye popping numbers” “You have got to have a flagship product” “Only the best products will sell” “Find a way to be best in your class” Help with Wholesaling Efforts “Aggressively help with the wholesaling efforts” “It does not happen unless you are in front of the financial advisors” “Do training & education” “Investment management is becoming commoditized” Accept Price Compression “Fees will continue to be compressed at Merrill Lynch” “Get over price compression” “There are high hurdle rates to profitability; fees are low; minimums are low; and administrative costs are high” Target Efforts “Target your efforts” “Recognize the places where you will be valued” Accept the Movement to MSPs & Models “Embrace models; you are not selling out” “Get rid of people” Be Willing to Customize “Must meet the needs of platforms” Focus on the Gatekeepers “The world has been platformized” “Put your resources on the gatekeepers” Focus on the RIA Market “Focus on the RIA part of the business” Leverage Technology “Use technology to do better”” Just Say No “Be willing to say no” “Too many managers feel like they have to get in and they are not suited infrastructurally for it” Source: 11/14/06 Envestnet Conversation (Grinis); 11/10/06 SEI Investments Conversation (Schaeffer); 11/10/06 Envestnet Conversation (Hardwick); 11/9/06 US Fiduciary Conversation (MacKillop); 11/9/06 Capital Markets Consultants Conversation (Mendelson); 11/9/06 Harpeth Partners Conversation (Johnson); 11/7/06 Envestnet Conversation (O’Brien); 11/7/06 Greenrock Research Conversation (Malone); Tiburon Research & Analysis

Envestnet Executive on TAMP Programs One TAMP Executive Noted that Managers are Reaching Out Beyond the Proprietary Programs Envestnet Executive on TAMP Programs “The playing field is becoming a lot more balanced; managers who want to play only at wirehouses now want in the TAMPs as well” Lori Hardwick Envestnet 2006 Source: 11/10/06 Envestnet Conversation (Hardwick); Tiburon Research & Analysis

Outline Separately Managed Account (SMA) Programs Market Evolution Market History Market Definition Market Growth Leading Separately Managed Account (SMA) Programs Sponsors Separately Managed Account (SMA) Programs Market Segments Single Contract Programs Dual Contract Programs Proprietary Programs Separately Managed Account (SMA) Programs Future Predictions Slow Growth for Separately Managed Account (SMA) Programs Increase Usage of Model Portfolios Declining Fees for Separately Managed Account (SMA) Programs Moderate Manager Opportunities Incorporation of Alternative Investments

Separately Managed Account (SMA) Programs’ Fifth Future Prediction is Incorporation of Alternative Investments Comments -- Source: Tiburon Research & Analysis

Technology Issues Arising from Technology and Other Enhancements are Needed to Incorporate Alternative Investments into Separately Managed Accounts (SMAs) Technology Issues Arising from Alternative Investments Incorporated in Separately Managed Accounts (SMAs) Performance Fees Transparency Tracking Systems Education -- -- Currently very costly -- Source: 4/2/03 Wealth Management Letter; 10/1/02 Citigroup Presentation (Parker); Tiburon Research & Analysis

Full-Service Brokers Opinions Full-Service Brokers Rate the Importance of Alternative Investments in Separately Managed Account (SMA) Programs as Only a 6.2 Out of 10 Full-Service Brokers Opinions About Importance of Alternative Investments In Separately Managed Account (SMA) Programs (1 – 10; 10 = High) Average 6.2 Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Full-Service Brokers Mention Alternative Investments in Separately Managed Accounts (SMAs) are Increasing in Importance, But Still Have a Ways to Go Comments Increasing Importance “Alternatives are becoming more and more important, but I am not sure they will ever become mainstream” “They are growing in importance for sure; they may be a five out of ten in terms of importance today, but will likely be an eight in the future” “Most of my clients do not need them, but sure enough as they hear about them will want them” Still a Ways to Go “I do not use them too often, only for clients above $5 million if at all” “Not something we have not looked at – I am not even sure we even have the platform to do that” “The major issue is that it is hard to get under the hood of a hedge fund in the research process” “I just think their current popularity is driven by the awful performance of large cap type stocks over the past five years; when those returns improve again I would think their popularity could wane some” Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Full-Service Broker Ratings of Full-Service Brokers Have Mixed Views on the Inclusion of Alternative Investments in Separately Managed Account (SMA) Programs How Reconcile with Previous Pages? Full-Service Broker Ratings of Alternative Investments in Separately Managed Account (SMA) Programs (1 – 10; 10 = High) Average 6.3 Source: 1/9/04 RW Baird Advisor Conversation (Farron); 1/8/04 RW Baird Advisor Conversation (Busey); 1/8/04 RW Baird Advisor Conversation (Michels); 1/8/04 RW Baird Advisor Conversation (Garrett); 1/8/04 RW Baird Advisor Conversation (Mertens); 1/8/04 RW Baird Advisor Conversation (Ater); 1/7/04 RW Baird Advisor Conversation (Zeidler); 1/7/04 RW Baird Advisor Conversation (Carter); Tiburon Research & Analysis

Some Full-Service Brokers See Alternative Investments as Appropriate for a Select Group of Clients How Reconcile with Previous Pages? Comments Hedge Funds “I am sure hedge funds will play a bigger role in a few years, but there are too many questions about the products right now that need to be answered, such as possible regulation” “Portfolios can benefit from products that are not directly correlated to equity and fixed-income markets” “Hedge fund-of-funds should do well on the retail level if they can figure out how to police the industry” “The move to increased disclosure amongst hedge funds could be a double-edged sword… on one hand, it will increase advisor and client confidence in the product, but increased disclosure may take away some of the allure of hedge funds by commoditizing them” Venture Capital & Private Equity “Private equity is only appropriate for clients with at least $5 million, and a minority of advisors have penetrated this market” “Venture capital and private equity will remain the choice of the ultra wealthy investor” Real Estate “REITs have been outstanding in the past two years” “Real estate may be the answer for a small percentage of clients, but I do not see this as a major trend; it is an individual decision” Source: 1/9/04 RW Baird Advisor Conversation (Farron); 1/8/04 RW Baird Advisor Conversation (Busey); 1/8/04 RW Baird Advisor Conversation (Michels); 1/8/04 RW Baird Advisor Conversation (Garrett); 1/8/04 RW Baird Advisor Conversation (Mertens); 1/8/04 RW Baird Advisor Conversation (Ater); 1/7/04 RW Baird Advisor Conversation (Zeidler); 1/7/04 RW Baird Advisor Conversation (Carter); Tiburon Research & Analysis

The Use of Alternative Investment Managers is Just Beginning Comments No Usage “None” “We do not offer access to alternative investments” “We do not offer alternative investments yet, but there is significant discussion of this topic currently” Some Usage “We offer our brokers access to two different types of alternative investments; we have a hedge funds-of-funds product through Tremont Advisors and we also have a private equity offer” “We do a bit of this” “We are planning on coming out with an alternative investment product by the end of this year” “We are planning on beginning to offer access to money managers in alternative asset classes early next year, probably the first quarter” Source: 10/19/01 US Bancorp Piper Jaffray Conversation (Grahek); 10/19/01 Legg Mason Conversation (Lavin); 10/19/01 Wachovia Securities Conversation (Oreilly); 10/19/01 Assante Conversation (Carson); 10/18/01 AssetMark Conversation (Cordes); 10/16/01 CDC Email (Jarrett); 10/12/01 Thomas Weisel Partners Conversation (Braitberg); 10/12/01 HD Vest Financial Services Conversation (Smith); Tiburon Research & Analysis

However, the Skeptics Claim that while Industry Conferences are Heavy on Hedge Funds, Few Clients are Demanding them from Financial Advisors Add subtitles Comments “Not a lot of demand in this market” “Misunderstood” “Opportunity with less sophisticated boards” Source: 10/22/02 Legg Mason Advisor Conversation (Freeman); 10/22/02 Legg Mason Conversation (Adams); Tiburon Research & Analysis

A Handful of Alternative Investment Companies are Seeking to Participate in the Separately Managed Accounts (SMAs) Program Market Comments -- Source: Tiburon Research & Analysis

Additional Separately Managed Account (SMA) Pages to Blend In Comments -- Source: Tiburon Research & Analysis

Separately Managed Account (SMAs) Programs Assets Under Management Nearly Half of Separately Managed Account (SMA) Program Assets Under Management are Held in Individual Retirement Accounts (IRAs) Accounts Separately Managed Account (SMAs) Programs Assets Under Management By Account Type Source: 9/04 Financial Research Corporation (FRC) Newsletter (FRC); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Programs Over Half of Separately Managed Accounts’ (SMAs’) Programs Net Flows are New Cash from IRA Rollovers & Other Needs update Separately Managed Accounts (SMAs) Programs Net Flows By Source Other New Cash IRA Rollovers Conversion from Mutual Fund Holdings Conversion from Individual Securities Source: 12/08 Cerulli Associates Research Report; Tiburon Research & Analysis 313 313

Separately Managed Accounts (SMAs) Industry Experts Attribute Much of Separately Managed Accounts’ (SMAs’) Programs Growth to Individual Retirement Accounts (IRAs) Rollovers, Contributing to 25% of Net Flows Unbundle SMAs & MSPs Separately Managed Accounts (SMAs) Net Flows By Source Source: 4/05 CPA Wealth Provider; 2/7/05 Money Management Institute (MMI); 9/04 Financial Research Corporation (FRC) Newsletter; Tiburon Research & Analysis

Separately Managed Account (SMA) Program Investors Nearly All Separately Managed Account (SMA) Program Investors are Pleased with their Investments Move? Separately Managed Account (SMA) Program Investors By Satisfaction with their Investment Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Programs Key Growth Drivers Separately Managed Accounts’ (SMAs’) Programs Growth Over the Past Ten Years Has Been Driven by Both Perceived Benefits Over Mutual Funds, and a Variety of Other Converging Forces Very long section coming Separately Managed Accounts (SMAs) Programs Key Growth Drivers Perceived Benefits Over Mutual Funds Other Converging Forces Increased visibility Manager access Tax benefits Customization Falling fees Falling account minimums Brokers serving richer clients Higher client retention Program sponsors benefits Better performance (possibly) Source: 11/14/05 Business Wire (Citigroup); 3/13/03 Financial Planning Magazine Email (Doe); 11/1/02 SunTrust Presentation (O’Reilly) (Cerulli Associates); 9/30/02 Institute for International Research (IIR) Conference Brochure (Cerulli Associates); 12/14/00 HD Vest Financial Services Brochure; 9/27/99 Portfolio Management Consultants (PMC) Conversation (MacKillop); 9/27/99 SG Cowen Conversation (Heald); Tiburon Research & Analysis

Perceived Benefits to Separately Managed Accounts (SMAs) There are Four Perceived Benefits to Separately Managed Accounts (SMAs) Over Mutual Funds, Including Manager Access, Increased Visibility, Tax Benefits, & Customization Perceived Benefits to Separately Managed Accounts (SMAs) Over Mutual Funds Manager Access Increased Visibility Tax Benefits Customization Perceived to grant access to better money managers Visibility on holdings Visibility of fees Increased communication Do not “buy into” capital gain Ability to time the taking of capital gains and loses at year end Ability to avoid employer or some “sin” stocks Able to build around an existing portfolio Source: 11/14/05 Business Wire (Citigroup); 3/13/03 Financial Planning Magazine Email (Doe); 11/1/02 SunTrust Presentation (O’Reilly) (Cerulli Associates); 9/30/02 Institute for International Research (IIR) Conference Brochure (Cerulli Associates); 12/14/00 HD Vest Financial Services Brochure; 9/27/99 Portfolio Management Consultants (PMC) Conversation (MacKillop); 9/27/99 SG Cowen Conversation (Heald); Tiburon Research & Analysis

Program Sponsors & Money Manager Ideas on Not Surprisingly, Separately Managed Account (SMA) Program Sponsors are Eager to Tout the Perceived Benefits of Separately Managed Accounts (SMAs); However, Many are Realistic with their Comments Program Sponsors & Money Manager Ideas on Perceived Benefits of Separately Managed Accounts (SMAs) Manager Access Increased Visibility Tax Benefits Customization “Sponsor programs that focus on getting a strong package of managers do not necessarily need to have the best managers, but each slot needs to be solid; the choices can be limited as long as clients can feel good knowing that there is not a single bad apple in the whole bunch” “As with customization, it is compelling to say that sponsors can offer any manager in the world; the reality is that most advisors and clients will still stick with a core group of managers” “An advisor can fire a separate account manager faster than a client can fire an advisor; clients realize that advisors can quickly respond to poor performance by pulling out managers and inserting new ones” -- “More investors are focusing on tax-sensitive money management, which is another key component of separately managed accounts” “I am not sure if tax-efficiency alone will drive growth; for the small investor, we are talking about savings in the hundreds of dollars, which is not compelling… for the larger investors, tax savings make a better argument” “The customization features of separately managed accounts are a key selling point for investors; mutual funds can not deliver on this front” “Customization is an important by-product of wealth; wealthy people customize their homes and their cars… the same will be true of their investments” “Only 10%-15% customize their accounts; the ability to offer customized options is more important than the customization itself” Source: 4/14/04 SEI Investments Conversation (Smith); 4/12/04 LPL Conversation (Lopez); 4/12/04 Powell Johnson Conversation (Johnson); 4/8/04 Nuveen Rittenhouse Conversation (Nersesian); 3/25/04 Citigroup Conversation (Parker); 3/22/04 Money Management Institute (MMI) Conversation (Davis); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Difference in Advantages Opinions Overall, While Separately Managed Account (SMA) Investors Value Manager Access and Visibility, Financial Advisors Focus on Tax Advantages & Customization Separately Managed Accounts (SMAs) Difference in Advantages Opinions Consumers Financial Advisors Manager Access Increased Visibility Tax Advantages Customization Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

The First Core Perceived Benefit of Separately Managed Accounts (SMAs) is Access to Superior Money Managers Money managers previously only available to institutions & ultra high net worth clients are available to retail investors through separately managed account programs Comments -- Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs The Median Number of Managers in Separately Managed Account (SMA) Programs is 40, with a Range of 8-to-85 Separately Managed Account (SMA) Programs By Number of Managers 40 Median Source: 10/19/01 Legg Mason Conversation (Lavin); 10/15/01 Wachovia Securities (Granzow); 10/12/01 Thomas Weisel Partners Conversation (Braitberg); 10/12/01 HD Vest Financial Services Conversation (Smith); 10/8/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/18/01 Fund Quest Conversation (Clift); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs By Number of Products The Median Number of Products in Separately Managed Account (SMA) Programs is 70, with a Range of 32-to-200 Another source said that Wachovia Securities offers 115 products Separately Managed Account (SMA) Programs By Number of Products 70 Median Source: 10/19/01 Legg Mason Conversation (Lavin); 10/15/01 Wachovia Securities (Granzow); 10/12/01 Thomas Weisel Partners Conversation (Braitberg); 10/12/01 HD Vest Financial Services Conversation (Smith); 10/8/01 AssetMark Conversation (Cordes); 10/18/01 Centurion Conversation (Brown); 10/18/01 Fund Quest Conversation (Clift); 10/17/01 Greenrock Conversation (Malone); Tiburon Research & Analysis

High Net Worth Investors by The Biggest Draw of High Net Worth Investors to Separately Managed Account (SMA) Programs is the Access to Otherwise Unavailable Money Managers High Net Worth Investors by Propensity to Value Separately Managed Accounts (SMA) Access To Otherwise Unavailable Money Managers Source: 2/02 Registered Rep (Merrill Lynch; Prince & Associates); Tiburon Research & Analysis

Separately Managed Account (SMA) Three-Quarters of Separately Managed Account (SMA) Investors Said that Access to Good Portfolio Managers was a Very Important Overall Feature Separately Managed Account (SMA) Investors by Importance of Portfolio Manager Access Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

By Importance of Portfolio Manager Access Amazingly, Very Few Financial Advisors Feel that Manager Access is Extremely Important in their Separately Managed Account (SMA) Recommendation Process Financial Advisors By Importance of Portfolio Manager Access Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

The Second Perceived Benefit of Separately Managed Accounts (SMAs) is Increased Visibility Comments -- Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Visibility Benefits of Separately Managed Accounts (SMAs) The Increased Visibility of Separately Managed Accounts (SMAs) Includes that of Holdings, Fees, & Communications Visibility Benefits of Separately Managed Accounts (SMAs) Increased Communications Visibility of Holdings Visibility of Fees Hold individual securities versus mutual funds No hidden 12b-1 or other fees Clients receive all securities order confirms Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Separately Managed Account (SMA) Investors By Importance of Visibility Nearly Two-Thirds of Separately Managed Account (SMA) Investors Consider Visibility as a Very Important Separately Managed Accounts Advantage In this chart, visibility includes that of holdings, fees, visibility of holdings, and better communication and performance reporting Separately Managed Account (SMA) Investors By Importance of Visibility Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

High Net Worth Investors However, Less than One-Fifth of All High Net Worth Investors are Drawn to Separately Managed Account (SMA) Programs for their Asset-Based Fee Structure High Net Worth Investors By Importance of Separately Managed Accounts (SMAs) Asset-Based Fee Structure Source: 2/02 Registered Rep (Merrill Lynch; Prince & Associates); Tiburon Research & Analysis

High Net Worth Investors Less than One-Fifth of High Net Worth Investors are Drawn to Separately Managed Account (SMA) Programs for their All-Inclusive Fee Structure High Net Worth Investors By Importance of Separately Managed Accounts (SMAs) All-Inclusive Fee Structure Source: 2/02 Registered Rep (Merrill Lynch; Prince & Associates); Tiburon Research & Analysis

Less Than Half of Financial Advisors Consider Visibility of Fees to be a Very Important Separately Managed Account (SMA) Program Advantage Financial Advisors By Importance of Separately Managed Account (SMA) Programs Visibility of Fees Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

The Third Perceived Benefit of Separately Managed Account (SMA) Programs it Tax Benefits Comments -- Source: Tiburon Research & Analysis

High Net Worth Investors Less than Half of All High Net Worth Investors are Drawn to Separately Managed Account (SMA) Programs for their Tax Efficiency High Net Worth Investors By Importance of Separately Managed Accounts (SMAs) Tax Efficiency Source: 2/02 Registered Rep (Merrill Lynch; Prince & Associates); Tiburon Research & Analysis

Separately Managed Account (SMA) Investors Over Half of Separately Managed Account Program (SMA) Investors Say Tax Management Features are a Very Important Advantage Separately Managed Account (SMA) Investors By Importance of Tax Management Features Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

By Attitudes Regarding the Tax Efficiency of their Investments Almost Two-Thirds of Clients are Paying More Attention to Tax Efficiency than they did a Year Ago Clients By Attitudes Regarding the Tax Efficiency of their Investments Source: 12/27/02 Keefe, Bruyette, & Woods Report; Tiburon Research & Analysis

Some Believe that Separately Managed Accounts (SMAs) are More Tax Efficient and that Tax Management Can Yield 50-100 Basis Points More Per Year After-tax investor returns have trailed pre-tax results by about 2.5% per year since 1926 (at prevailing tax rates, applied to an unmanaged stock index) Comments -- Source: 7/7/03 Wall Street Journal; 11/02 ING Group Brochure; 10/23/02 Wealth Management Letter; 12/01 Scott & Stringfellow Brochure; Tiburon Research & Analysis

Some Financial Advisors Use Separately Managed Account (SMA) Holdings to Offset Tax Liabilities in Other Areas of Clients’ Portfolio Such as a Real Estate Transaction Comments -- Source: 7/7/03 Wall Street Journal; 11/02 ING Group Brochure; 10/23/02 Wealth Management Letter; 12/01 Scott & Stringfellow Brochure; Tiburon Research & Analysis

Investors Pay Ordinary Tax Rates on Dividends & Interest and Lower Capital Gains Tax Rates when they Sell Investors can direct managers to realize losses or gains in order to maximize their personal tax position Comments -- Source: 7/7/03 Wall Street Journal; 11/02 ING Group Brochure; 10/23/02 Wealth Management Letter; 12/01 Scott & Stringfellow Brochure; Tiburon Research & Analysis

Factors that Affect After-Tax Returns There are Four Factors that can Affect After-Tax Returns, Including Turnover, Cash Flows, and External Gains Factors that Affect After-Tax Returns Turnover Cash Flows External Gains Clients’ Tax Position Stock selection Manager changes Rebalancing Contributions Withdrawals Mutual fund distributions Other investments Sales of businesses Loss carryovers State of residence Federal tax bracket AMT susceptibility (high state income tax and large capital gains) Source: 11/7/03 McDonald Presentation (Doe); Tiburon Research & Analysis

The Potential Tax Efficiency of Separately Managed Accounts (SMAs) can be Significant Not Tiburon format Returns on $100,000 Investment Over 20 Years by Tax Efficiency Savings of 100 Basis Points Source: 10/23/02 Wealth Management Letter; 12/01 Scott & Stringfellow Brochure; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Clients Clients who Have Access to Tax-Loss Harvesting in Separately Managed Accounts (SMAs) Use it Over Three-Quarters of the Time Separately Managed Accounts (SMAs) Clients By Use of Tax-Loss Harvesting Source: 7/05 Fund Fire (Money Management Institute (MMI)); Tiburon Research & Analysis

Interestingly, Some Argue that Mutual Funds are More Tax Aware Comments -- Source: 9/30/02 Fund Marketing Alert (Cerulli Associates); Tiburon Research & Analysis

Separate Account Managers By Propensity to Address Tax Issues Only Half of Separate Account Managers (SAMs) Have Addressed the Issue of Taxes Separate Account Managers By Propensity to Address Tax Issues Source: 9/30/02 Fund Marketing Alert (Cerulli Associates); Tiburon Research & Analysis 343 343

The Mutual Fund Industry Has Taken Steps to Address the Issue of Taxes The SEC required all mutual funds to publish after-tax performance Comments -- Source: 9/30/02 Fund Marketing Alert (Cerulli Associates); Tiburon Research & Analysis

Financial advisors must ask the right questions Separate Account Managers (SAMs) Still Need to Take Action to Address Tax Issues Asset managers must be aware of their role in managing clients’ tax burden Comments Financial advisors must ask the right questions -- Source: 9/30/02 Fund Marketing Alert (Cerulli Associates); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) May Benefit from Recent Changes in Tax Laws Needs Update Comments Tax law changes make it more important for advisors to help investors minimize short term gains now that long term capital gain rates have dropped to 15% -- Manulife, Lockwood, and AIM launched tax-harvesting campaigns in 2003 to explain the tax benefits of separately managed accounts Source: 12/1/03 Fund Marketing Alert; Tiburon Research & Analysis

Many Separately Managed Accounts (SMAs) Assets Under Management are in Individual Retirement Accounts which are Not Taxable Comments -- Source: Tiburon Research & Analysis

Views on the Importance of Tax Efficiency Consumers See the Importance of Tax Efficiency, Rating its Importance as a 7.4 Out of 10 Consumers Views on the Importance of Tax Efficiency (1-10; 10 = High) Average 7.4 Source: 4/5/04 Consumer Interview (Witte); 4/4/04 Consumer Interview (Gyomber); 4/4/04 Consumer Interview (Christman); 3/31/04 Consumer Interview (Gilbert); 3/31/04 Consumer Interview (Amboyan); Tiburon Research & Analysis

Consumer Comments on Tax Efficiency… -- Source: Tiburon Research & Analysis

Program Sponsors & Money Managers Believe that Tax Efficiency is Increasingly Becoming a Key Factor in Separately Managed Accounts (SMAs) Comments The Name of the Game “Tax sensitive money management is the name of the game today; separately managed accounts fulfill that need” Ideal for the High Net Worth “Especially among the higher net worth, taxes play a key role in weighing investment options; taxes can have a significant impact on larger portfolios” “After-tax performance is now the focus of high net worth investors” “Tax efficient investing is a key concern for the high net worth, especially in a market of moderate returns” Source: 4/8/04 Nuveen Rittenhouse Conversation (Nersesian); 3/25/04 Citigroup Asset Management Conversation (Parker); 3/22/04 Money Management Institute (MMI) Conversation (Davis); Tiburon Research & Analysis

Full-Service Brokers Opinions About Importance of Tax Efficiency Full-Service Brokers Rate the Importance of Tax Efficiency in Selling Separately Managed Accounts (SMAs) as an 8.2 Out of 10 Full-Service Brokers Opinions About Importance of Tax Efficiency In Selling Separately Managed Accounts (SMAs) (1-10; 10 = High) Average 8.2 Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Many Full-Service Brokers Believe Tax Efficiency is a Crucial Advantage of Separately Managed Accounts (SMAs), Whereas Others do Not Comments Importance of Tax Efficiency “Tax efficiency is very important to all my clients” “It depends – for individual retirement accounts (IRAs) accounts we do not care, but for taxable accounts it is terribly important since all my clients are in the top tax bracket” “We have often had clients come back to certain managers who are very efficient from a tax perspective to add money” “Tax efficiency is a point we make strongly in selling separately managed accounts” “We spend a lot of time at the end of the year matching up gains & losses” Not Crucial to Business “With all of the losses over the past few years, it is hard for me to really think about how to handle the gains” “I love the idea of having that control over taxes, but do not use it as much as others because of my business mix” Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

The Fourth Perceived Benefit of Separately Managed Accounts (SMAs) is the Ability to Customize Accounts Comments -- Source: Tiburon Research & Analysis

Customization Allowed in Separately Managed Accounts (SMAs) Customization is Possible in Separately Managed Accounts (SMAs) in the Realms of Avoiding Certain Individual Stocks and Building Around Existing Portfolios Customization Allowed in Separately Managed Accounts (SMAs) Avoid Certain Individual Stocks Build Around Existing Portfolios Employer stocks Sin stocks (tobacco, guns, etc) Clients with existing portfolio can build asset allocation around those holdings Source: 7/7/03 Wall Street Journal; 11/02 ING Group Brochure; 10/1/02 Lockwood Financial Group Presentation (Reinhart); 10/02 Financial Planning; Tiburon Research & Analysis

Industry Executive Comment on One Common Sales Analogy for the Decision Between Mutual Funds and Separately Managed Accounts (SMAs) is Building a House Industry Executive Comment on Exclusivity of Separately Managed Account (SMA) “Upscale people do not buy pre-manufactured houses; they custom design their houses” Len Reinhart Lockwood Advisors 2002 Source: 10/1/02 Lockwood Financial Group Presentation (Reinhart); Tiburon Research & Analysis

Reasons Why Some Managers May Not Offer The Amount of Allowable Customization in Practice Varies by Manager Due to Technology & Philosophy Constraints Reasons Why Some Managers May Not Offer Extensive Customization Abilities Technology Changing Investment Philosophy Unlike true separate accounts for institutional and ultra high net worth households, separately managed accounts have not focused on the technology needed to entirely customize accounts Some client customization requests make it difficult to stay true to the investment philosophy of the manager Source: 7/7/03 Wall Street Journal; 2/03 Journal of Financial Planning; 8/12/02 Investment News; 1/7/02 Fund Marketing Alert; 11/01 Financial Planning; Tiburon Research & Analysis

Program Sponsors & Money Managers Feel that Customization is a Key Feature Comments Key Selling Point “The customization features of separately managed accounts are a key selling point for investors; mutual funds can not deliver on this front” “I disagree with the assertion that only 10%-15% of separately managed accounts are customized; it is much more prevalent in our firm and I believe that to be the case with other firms as well… it is one of the main selling features of the product” “Clients need to feel that each investment they make is suited to their individual needs and goals… customization, whether it is used or not, is a key feature of separately managed accounts” Clients Like that it is Reserved for the Rich “Customization is an important by-product of wealth; wealthy people customize their homes and their cars… the same will be true of their investments” “The ability to customize is more important than the customization itself; if you offer a client a customized option alongside other models, they are more likely to pick a model because it is easier; that’s why only 10%-15% of accounts are customized” Source: 4/14/04 SEI Investments Conversation (Smith); 4/8/04 Nuveen Rittenhouse Conversation (Nersesian); 3/25/04 Citigroup Asset Management Conversation (Parker); 3/22/04 Money Management Institute (MMI) Conversation (Davis); Tiburon Research & Analysis

Full-Service Broker Comments on Customization While Overall Customization of Separately Managed Accounts (SMAs) Amongst Full-Service Brokers is Low, there are Mixed Reponses on the Individual Level Full-Service Broker Comments on Customization Higher Level of Customization Lower Level of Customization “My clients like to take advantage of the customization capabilities of separately managed accounts” “Many of our clients like to limit purchases of certain stocks, such as their own company or companies they’d prefer not to own” “Only a handful of my clients are interested in actively customizing their separately managed accounts” “Our clients have not taken advantage of customization of separately managed accounts” “Although customization of separately managed accounts is one of the big selling points, I have not seen a lot of customization among my client accounts” Source: 11/7/03 Legg Mason Advisor Conversation (Rosenfield); 11/7/03 Legg Mason Advisor Conversation (Castle); 11/7/03 Legg Mason Advisor Conversation (Graham); 11/6/03 Legg Mason Advisor Conversation (Barnhill); 11/6/03 Legg Mason Advisor Conversation (Davidov); 11/6/03 Legg Mason Advisor Conversation (Lopez); 11/5/03 Legg Mason Advisor Conversation (Rafalko); Tiburon Research & Analysis

Full-Service Brokers Opinions About Importance of Customization Full-Service Brokers Rate the Importance of Customization in Selling Separately Managed Accounts (SMAs) as a 6.8 Out of 10 Full-Service Brokers Opinions About Importance of Customization in Selling Separately Managed Accounts (1-10; 10 = High) Average 6.8 Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Full-Service Brokers Have Differing Opinions About the Importance of Customization to Clients, with Some Saying Clients Like to Know the Option to Customize is there But Do not Use it Comments Value of Customization “Customization allows me to move money out of sectors a client may work in, or away from stock he owns as an insider” “The customization advantages from a flexibility perspective are important when comparing separately managed accounts to mutual funds” Lack of Customization “The customization angle is often overdone” “Clients typically think their accounts are more customized than they really are” “Customization issues such as avoiding sin stocks or company holdings have never been an issue with any of our clients” “It is good for a client to know they have that option, but they do not typically use it” “Most clients will not use it – why should not they profit from emphysema?” Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

CPAs Tend to Love the Customization Features of Separately Managed Accounts (SMAs) Because they can Add Value Comments -- Source: 10/1/02 Lockwood Financial Group Presentation (Reinhart); Tiburon Research & Analysis

Characteristics of Mutual Funds & Separately Managed Accounts Overall, the Relative Characteristics of Separately Managed Accounts (SMAs) and Mutual Funds can be Debated Another source said that an argument also exists that mutual funds would get more attention of the top executives of a money manager due to sheer size Characteristics of Mutual Funds & Separately Managed Accounts Criteria Mutual Funds Separately Managed Accounts Professional Management Investment Discipline Regular Performance Reporting Diversification Ease (Ability to Diversify Smaller Accounts and Amount of Diversification for Medium Size Accounts) Public Information Access on Pool Ease of Redemption/Liquidity Appropriate Regulation Cost Direct Ownership Tax Planning (Avoid Built-In Capital Gains & Ability to do Year-End Tax Planning) Customization Ability Information Access on Individual Holdings Source: 12/15/03 Curian Capital Presentation (Vitalie); 7/2/01 Run Money Quarterly Report; 4/01 AIM Presentation (Doe); 12/26/00 Business Week; 12/14/00 HD Vest Financial Services Brochure; 11/30/00 UBS Presentation; 11/13/00 Fortune; 11/00 HD Vest Financial Services Presentation (Pinion); 11/00 HD Vest Financial Services Presentation (Smith); 11/00 Investment Advisor; 9/25/00 Mutual Fund Market News; Tiburon Research & Analysis

Competitive Advantages Separately Managed Accounts Mutual Funds and Separately Managed Accounts Each Have Some Key Advantages Competitive Advantages By Product Characteristics Mutual Funds Separately Managed Accounts Cost  Convenience Brand Customization Minimum Account Tax Efficiency Transparency Source: 11/03 On Wall Street; 7/2/01 Run Money Quarterly Report; 4/01 AIM Presentation (Doe); 9/27/99 Portfolio Management Consultants (PMC) Conversation (MacKillop); 9/27/99 SG Cowen Conversation (Heald); 2/99 Greenrock Research Meeting (Malone); Tiburon Research & Analysis

Other Converging Forces Driving Separately Managed Accounts (SMAs) Four Other Converging Forces Have Been Helping Drive Separately Managed Accounts (SMAs) Market Growth, Beginning with Falling Fees & Falling Account Minimums Align to earlier list of six Other Converging Forces Driving Separately Managed Accounts (SMAs) Falling Account Minimums Brokers’ Excitement About them Better Performance (Possibly) Falling Fees Average fees paid by clients has been on a steady decline Account minimums, once $1.0 million & above, are now as low as $25,000 Brokers are targeting richer, more profitable clients, making them good candidates to use separate accounts more than other products Client retention rates in separately managed accounts program is arguably higher Separate accounts have advantages that could deliver better results, leading to faster increase in assets Source: 12/1/03 Fund Marketing Alert; 8/12/02 Investment News; 1/02 Financial Planning; Tiburon Research & Analysis

Investor Demand for Advice Drives Fee-Based Structure Fees charged are usually 25% less than the 1.5% average maximum charged for mutual fund wrap providers because of rep flexibility Comments Increasing practice of augmenting wraps with outside funds to create asset allocation models -- High net-worth clients are pursuing consultant wraps because they customize for tax efficiency Regional brokerages and independent broker/dealers are gaining market share over the wirehouses IBDs saw market share grow from 1.6% to 2.3 % The internet plays an increasing role in advice and guidance Fee-based brokerage assets grew from $3.1 billion in 1994 to $41.1 billion in 1999\ RIAs turning to consultant wrap programs to provide wealthier clients with greater service Regional brokerages grew to 14.8% Source: 8/99 Cerulli Report Summary: The State of the Wrap and Managed Accounts Industry; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Program Minimum Account Sizes Account Minimums on Separately Managed Accounts (SMAs) Have Fallen Significantly Not Tiburon format Separately Managed Accounts (SMAs) Program Minimum Account Sizes Source: 10/03 Kiplinger’s; 4/17/03 Financial Planning Newsletter; 3/13/03 Financial Planning Email (Doe); 11/02 ING Group Brochure; 10/12/02 Bob Veres Newsletter; 6/02 Ticker; 9/01 Financial Advisor; 8/13/01 Fund Fire; 7/9/01 EnvestnetPortfolio Management Consultants (PMC) Presentation (Crager); 7/2/01 Run Money Quarterly Report; 7/01 Financial Advisor; 6/25/01 Investment News; 12/00 Investment Advisor; 11/00 HD Vest Financial Services Conference Presentation (Pinion); Tiburon Research & Analysis

Minimum Account Sizes are Not Always as they Appear; Many Firms Quote a Minimum Account Size in their Marketing Materials, But that May Not be Applicable for All Managers in their Programs Comments -- Source: 10/03 Kiplinger’s; 4/17/03 Financial Planning Newsletter; Tiburon Research & Analysis

Minimums Quoted at $100,000 or Lower Should be Closely Examined; Managers May Handle Accounts Below this Level Differently than they Manage Larger Accounts Managers may include fewer sectors or a sponsor may use ETFs like Lockwood Comments -- Source: 10/03 Kiplinger’s; 4/17/03 Financial Planning Newsletter; Tiburon Research & Analysis

Some Believe that Minimums May Again Go Back Up Some firms may be buying market share at unprofitable levels Comments -- Source: 9/10/02 Financial Advisor; 6/24/02 Investment News; Tiburon Research & Analysis

Separately Managed Accounts Three-Quarters of Separate Account Managers Now Set their Minimums at $100,000 Another source said that there is a small, but potentially growing, segment of programs offering $25,000 minimums Separately Managed Accounts Minimum Account Sizes Source: 8/6/01 Investment News (Cerulli Associates); Tiburon Research & Analysis

Some accounts were moved, others were closed Due to the Depressed Market of 2000-to-2002, Some Separately Managed Accounts (SMAs) Fell Below Managers’ Minimums Outdated? Comments Some accounts were moved, others were closed -- Source: 10/27/03 Legg Mason Conversation (Hanes); 10/22/02 Legg Mason Conversation (Adams); Tiburon Research & Analysis

Debate Regarding Lowering Separately Managed Accounts Minimums There is Debate Over Whether Lower Minimums are Even Suitable for Separately Managed Accounts, with Proponents Saying Smaller Accounts can Now be Managed with Ease and Contrarians Saying Smaller Accounts are Difficult to Diversify Debate Regarding Lowering Separately Managed Accounts Minimums Pros Cons Technology innovations have made it possible to lower account minimums without sacrificing much in terms of features Decreases costs on all levels (e.g., managers, program sponsors, clearing, financial advisors) Possible to create separately managed accounts that provide comparable level of diversification regardless of account size Some other folks argue that one separately managed account can be combined with several mutual funds to round out portfolios Smaller accounts are difficult to diversify Difficult to provide proper asset allocation (e.g., potentially leaves clients with single-digit holdings in some positions) While manager minimums can be lowered, transaction fees may get out of hand Financial advisors are less likely to devote personal attention to smaller accounts On the manager side, it becomes difficult to maintain profitability on smaller accounts Sponsors lowering managers’ fees Fixed cost of record-keeping regardless of account size Source: 12/15/03 Curian Capital Presentation (Vitalie); 11/03 On Wall Street; 7/7/03 Wall Street Journal; 6/1/03 New York Times; 5/03 Financial Planning; 4/03 Financial Planning; 11/01 On Wall Street; Tiburon Research & Analysis

Program Sponsor & Money Manager Feedback on Minimum Account Strategy Program Sponsor & Money Managers Believe that Technology will Allow for Lower Account Minimums Program Sponsor & Money Manager Feedback on Minimum Account Strategy Program Sponsors Money Managers Technology will Help Lower Minimums “Technology will take care of the some of the problems associated with lower minimums, but fee compression will remain” Wonder If Minimums Should be Lower “The question remains whether clients can achieve proper diversification and customization with less than $200,000” “Just because we can lower the minimum account size does not mean that we should; we have held fast to the idea that in order to be effective, separately managed accounts need to have $150,000-$200,000” Staying the Same “Our minimums are not going down; we are keeping them at $100,000” “I think the programs offering lower account minimums are misleading investors; smaller separately managed accounts are getting a lot of press, but they’re glossing over the fact that that you can not do proper diversification with a small amount of money” Rising Minimums “If anything, we have increased our minimums lately, mainly because we firmly believe that you need $250,000 to properly diversify” Source: 4/8/04 Nuveen Rittenhouse Conversation (Nersesian); 4/5/04 Prudential Financial Conversation (Rice); 4/1/04 PIMCO Conversation (Patrick); 3/30/04 Morgan Stanley Conversation (Haynes); 3/25/04 Citigroup Asset Management Conversation (Parker); 3/22/04 Money Management Institute (MMI) Conversation (Davis); Tiburon Research & Analysis

Representative Client Portfolio For Instance, at $500,000, a Client Could Have Five Separate Account Managers for Proper Diversification; a $100,000 Account Would Have Trouble Achieving that Equally Representative Client Portfolio Source: 4/1/01 Advent Software Newsletter; Tiburon Research & Analysis

Reasons Brokers are Excited About Separately Managed Accounts (SMAs) Full-Service Brokers are Excited About Separately Managed Accounts (SMAs) Because they are Increasingly Serving Richer Clients, and Realizing Higher Client Retention Reasons Brokers are Excited About Separately Managed Accounts (SMAs) Serving Richer Clients Higher Client Retention Brokers are motivated to explain all of the aforementioned advantages of separately managed accounts as they are specifically appropriate for higher net worth clients (e.g., tax sensitivity, customization, manager access) while mutual funds lack the cachet Separately managed accounts have higher client retention rates Source: 7/9/01 EnvestnetPortfolio Management Consultants (PMC) Presentation (Doe); 7/2/01 Run Money Brochure; 6/5/01 Run Money Presentation (Doe); Tiburon Research & Analysis

The Use of Separately Managed Accounts (SMAs) can Help Financial Advisors with Richer Clients Position themselves to Capture Entire Accounts Instead of Just a Portion Comments -- Source: 4/1/01 Advent Software Newsletter; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Have Reportedly Experienced Higher Client Retention Rates Comments -- Source: Tiburon Research & Analysis

Program Sponsor Comment on Separately Managed Accounts (SMAs) Program Sponsors Feel that Separately Managed Accounts’ (SMAs) Increased Value Proposition Helps Increase Client Retention Needs real source Program Sponsor Comment on Separately Managed Accounts (SMAs) “Separately managed accounts have an increased value proposition; I think clients stick with them as a result” Program Sponsor 2004 Source: 4/14/04 Program Sponsor Conversation (Doe); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Versus Mutual Funds Most Believe that Client Retention Rates are Higher with Separately Managed Accounts (SMAs) than with Mutual Funds… Not Tiburon format Separately Managed Accounts (SMAs) Versus Mutual Funds Average Holding Period (Years) Move to product & services research Another source said the average separately managed account turnover was 15% versus 25% for mutual funds while still another source said that annual redemption rates on separately managed accounts are as low as 8% to 10% Source: 6/02 Ticker (New River); 1/02 Lockwood Research (New River); 12/01 Financial Planning (FRC); 10/01 Investment Consulting News (FRC); 4/1/01 Advent Software Newsletter; Tiburon Research & Analysis

Redemption Rates of Separately Managed Account Versus Mutual Funds …But Surprisingly, Some Suggest that the Average Holding Period for a Separately Managed Account (SMA) May be Lower than for an Equity Mutual Fund Not Tiburon format Move to product & services research Redemption Rates of Separately Managed Account Versus Mutual Funds Another source said that the higher longer periods among mutual funds to the large amount of assets in retirement accounts which are traditionally good sources of steady assets Source: 11/03 On Wall Street (Cerulli Associates); 8/11/03 Fund Marketing Alert; Tiburon Research & Analysis

Reasons Separately Managed Accounts (SMAs) May Perform Separately Managed Accounts’ (SMAs) Performance Might be Better than Mutual Funds Long Term for Three Reasons; if this is True, then that would also Obviously Help Growth Not Tiburon format Reasons Separately Managed Accounts (SMAs) May Perform Better than Mutual Funds Tighten Cost Advantage Performance Advantage No Need to Hold Cash In one ten-year study of 320 broad equity separately managed accounts versus 410 broad equity mutual funds, had a 30 bps expense advantage In same study, separate accounts had a 70 bps performance advantage pre-tax Mutual funds must hold cash in accounts in order to fulfill sell orders, whereas separate accounts do not Source: 6/00 Portfolio Management Consultants (PMC) Conference Presentation (Yanari); Tiburon Research & Analysis

There are a Handful of Serious Concerns About How the Traditional Separately Managed Accounts (SMAs) Vision and its Reality Actually Match Up Comments -- Source: Tiburon Research & Analysis

Concerns Regarding Traditional Separately Managed Accounts (SMAs) The Serious Concerns Regarding Traditional Separately Managed Accounts (SMAs) Begin with Account Minimums (Page 1) Concerns Regarding Traditional Separately Managed Accounts (SMAs) Lack of Asset Allocation Long Transition Period Minimums Due Diligence Less Regulation Still substantial account minimums Difficulty in doing due diligence For example: single style, chasing hot dot Also generally lacking audited performance Possible long transition period of not being invested Source: 10/12/02 Bob Veres Newsletter; 10/1/02 Smith Barney Presentation (Campanale); 12/02 Senior Consultant; 6/02 Ticker; Tiburon Research & Analysis

Concerns Regarding Traditional Separately Managed Accounts (SMAs) Concerns Regarding Traditional Separately Managed Accounts (SMAs) (Page 2) Concerns Regarding Traditional Separately Managed Accounts (SMAs) Questionable Portfolio Manager Focus Possible Security Overlaps & Wash Sales Trading Execution Dispersion in Account Returns Paperwork Nightmare For example: may get junior portfolio manager Often, one money manager is buying a stock while another is selling Possibly not best execution Historical composite performance records can be suspect For example: account stalemates and confirms Source: 10/12/02 Bob Veres Newsletter; 10/1/02 Smith Barney Presentation (Campanale); 12/02 Senior Consultant; 6/02 Ticker; Tiburon Research & Analysis

Concerns Regarding Traditional Separately Managed Accounts (SMAs) Concerns Regarding Traditional Separately Managed Accounts (SMAs) (Page 3) Concerns Regarding Traditional Separately Managed Accounts (SMAs) Limited Customization & Tax Advantages Explaining the Product to Investors Cumbersome Rebalancing Lack of Portability Systems Incompatibility Hype but limited reality in customization & tax advantages Broker is not sufficiently motivated to rebalance across managers Difficult for clients to transfer separately managed accounts if they change firms Difficult to replace managers Different gauges of railroad tracks Consumers who know the mutual fund system may find the transition to separately managed accounts confusing, and firms are not explaining them well enough Source: 10/12/02 Bob Veres Newsletter; 10/1/02 Smith Barney Presentation (Campanale); 12/02 Senior Consultant; 6/02 Ticker; Tiburon Research & Analysis

Most Minimums are Still $100,000-to-$250,000 Some are $25,000 – $50,000 Comments Diversification becomes an issue with smaller accounts -- Source: 6/02 Ticker; Tiburon Research & Analysis

Leads to lagging performance Being Un-Invested when Accounts Transfer is an Issue with Separate Accounts Leads to lagging performance Comments -- Source: 10/22/02 Legg Mason Advisor Conversation (Davidov); Tiburon Research & Analysis

Portfolio Managers are Likely to Focus on Mutual Funds which they Manage Because those are Reported in the Newspaper Every Day From an organization stand point, it would be a surprise if the best managers were not put on the largest pools (mutual funds) Comments -- It is likely that some separately managed accounts will be managed by junior portfolio managers Source: 9/10/02 Fund Marketing Alert; 8/9/00 Money; Tiburon Research & Analysis

Multiple Separately Managed Accounts (SMAs) can Lead to Possible Security Overlaps and Wash Sales Managers with different strategies may be buying and selling the same set of securities simultaneously Comments -- Source: 11/1/02 SunTrust Presentation (O’Reilly); Tiburon Research & Analysis

Some Separately Managed Accounts (SMAs) May Receive Non-Timely Execution Due to their Broker-Centric Structure Trades are systematically sent to the brokerage firms that referred the accounts Comments -- Source: 9/10/02 Fund Marketing Alert; Tiburon Research & Analysis

Historical composite performance records can be suspect Dispersion in Separately Managed Accounts (SMAs) Account Performance can be Huge Historical composite performance records can be suspect Comments -- Source: 9/10/02 Fund Marketing Alert; Tiburon Research & Analysis

Paperwork for Separately Managed Accounts (SMAs) can be a Nightmare Typically offer monthly statements and performance reports from each manager Comments -- Constant trading notices for actively managed accounts Can be overwhelming for clients Source: 11/03 On Wall Street; 11/2/02 SunTrust Presentation (O’Reilly); Tiburon Research & Analysis

Separately Managed Account (SMA) Investors Most Separately Managed Account (SMA) Investors Say that they are Realizing All the Benefits Described Upon First Investing, But this is Open to Questioning… Separately Managed Account (SMA) Investors By Realization of Perceived Benefits Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

The Hype of Customization May Not be Fulfilled in Real Client Accounts; Less than One-Fifth of Full-Service Broker Clients Customize their Separately Managed Accounts (SMAs) Another source indicated that only 15% of separately managed accounts are customized at the time of set-up and yet another source indicated that proprietary programs sponsors customize 25%-35% of separately managed accounts Full-Service Broker Clients who Customize Their Separately Managed Accounts Source: 11/7/03 Legg Mason Advisor Conversation (Rosenfield); 11/7/03 Legg Mason Advisor Conversation (Castle); 11/7/03 Legg Mason Advisor Conversation (Graham); 11/6/03 Legg Mason Advisor Conversation (Barnhill); 11/6/03 Legg Mason Advisor Conversation (Davidov); 11/6/03 Legg Mason Advisor Conversation (Lopez); 11/5/03 Legg Mason Advisor Conversation (Rafalko); Tiburon Research & Analysis

Full-Service Broker Clients The Tax Benefits of Separately Managed Accounts (SMAs) May Also be Overstated Full-Service Broker Clients By Propensity to Seek Customized Year-End Tax Treatment Source: 5/03 Financial Planning; 1/23/03 Wealth Management Letter; 11/2/02 SunTrust Presentation (O’Reilly); Tiburon Research & Analysis

By Client Tax Loss Services Over Half of Financial Advisors Utilizing Separately Managed Account (SMA) Say Less than 20% of their Clients Have Had Managers Take a Tax Gain or Loss in the Last Three Years Odd data Financial Advisors By Client Tax Loss Services Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Separately Managed Account (SMA) Owners Amazingly, Over Half of Separately Managed Account (SMA) Owners Say they Have Never Had a Manager Take a Tax Loss or Gain Separately Managed Account (SMA) Owners By Propensity to Have Taken a Tax Loss or Gain Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Rebalancing in Separately Managed Accounts (SMAs) Needs to Happen Across Accounts and Managers Making it Cumbersome Comments “Sure, rebalancing needs to be done, but this is the perfect example of an issue that the advisor needs to address… as a manager, we have little interest in worrying about this portion of the process” Source: 4/1/04 PIMCO Conversation (Patrick); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Lack Portability Comments -- Source: 8/28/03 Financial Planning Newsletter (Cerulli Associates); 10/1/02 Lockwood Financial Group Presentation (Reinhart); Tiburon Research & Analysis

Separately Managed Account (SMA) Programs are Said to All Work on Different Gauges of Railroad Tracks Comments -- Source: Tiburon Research & Analysis

Another Issue for Separately Managed Accounts (SMAs) is Consumer Confusion; Many are Used to the Mutual Funds Model Example issues: there are fewer choices in separately managed accounts than in mutual funds and clients may not understand that an outside manager does not mean outside custody Comments -- Source: 11/1/02 SunTrust Presentation (O’Reilly); 9/23/02 Investment News; 9/10/02 Fund Marketing Alert; Tiburon Research & Analysis

The Separately Managed Accounts (SMAs) Industry Needs to Clarify its Marketing Message The industry has made some progress with advisors but has a long way to go with consumers Comments -- The Money Management Institute (MMI) has an initiative regarding branding Source: 11/1/02 SunTrust Presentation (O’Reilly); 9/23/02 Investment News; 9/10/02 Fund Marketing Alert; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Some Separately Managed Accounts (SMAs) Issues Include Fewer Choices and Definition Separately Managed Accounts (SMAs) Issues Choices Definitions There are fewer choices in separately managed accounts than in mutual funds Clients may not understand that an outside manager does not mean outside custody Source: Tiburon Research & Analysis

Separately Managed Account (SMA) Investors Less than Half of Separately Managed Account (SMA) Investors Say that they Understand their Separately Managed Account (SMA) Very Well Another source said that separately managed account owners understand separately managed accounts slightly less well than mutual funds (49%) but better than insurance, annuities, exchange traded funds or hedge funds Separately Managed Account (SMA) Investors By Comprehension of their Account Another source said that some data suggests separately managed accounts owners make better investors because they focus on the long-term and do not chase performance Another source said that another survey finds awareness and understanding of SMAs lag among general investor populations Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Direct minimums of $1.0 million versus $100,000 Sometimes, High Net Worth Households can Hire Institutional Money Managers Directly and Pay Lower Fees Direct minimums of $1.0 million versus $100,000 Comments -- Source: 9/8/06 Dow Jones Newswire; Tiburon Research & Analysis

Comment on Investing Directly with Money Managers Some See the Opportunity to Invest Directly as Simply a Way to Avoid Important Steps Such as Portfolio Construction and Manager Due Diligence Comment on Investing Directly with Money Managers “Clients can go through the brokerage house platform, which help them with the portfolio construction and manager selection, or they can go directly to the manager” Daniel Grater President, RNC Genter Capital Management Source: 9/8/06 Dow Jones Newswire; Tiburon Research & Analysis

Pros & Cons Regarding Investing Directly with Money Managers The Pros & Cons of Each Method of Accessing Separately Managed Account (SMA) Managers are Centered on Assistance Versus Fees Pros & Cons Regarding Investing Directly with Money Managers Separately Managed Account (SMA) Programs Direct Pros Assistance Lower Minimums Lower Fees Cons Higher Fees Lack of Assistance Higher Minimums Source: 9/8/06 Dow Jones Newswire; Tiburon Research & Analysis

Typical Separately Managed Account Platform Fees The Fees Cut Out by Investing with a Separate Account Manager Direct Can be as Much as Two-Thirds Typical Separately Managed Account Platform Fees By Distribution Source: 9/8/06 Dow Jones Newswire (Cerulli Associates); Tiburon Research & Analysis

Separate Account Managers Often Charge Higher Fees for Direct Access But Because of the Lack of a Broker, Overall Costs are Typically Lower Comments -- Source: 9/8/06 Dow Jones Newswire; Tiburon Research & Analysis

Another Issue is that Information About Separate Account Managers is Not Readily Available to Consumers Comments -- Source: 9/8/06 Dow Jones Newswire; Tiburon Research & Analysis

Assets for Direct Investments in Separate Accounts are Difficult to Come By Comments -- Source: 9/8/06 Dow Jones Newswire; Tiburon Research & Analysis

Reasons Managers Go Direct Too Small for National Platforms There are Typically Three Reasons Why Managers Go Direct to Clients, Including Being Too Small for National Platforms, Having Strong Regional Roots, & Because they Have Always Gone Direct Reasons Managers Go Direct Too Small for National Platforms Strong Regional Roots Always Done So -- -- -- Source: 9/8/06 Dow Jones Newswire; Tiburon Research & Analysis

Manager Selection is the Core of Many Programs Comments -- Source: Tiburon Research & Analysis

Wirehouses Separately Managed Accounts (SMA) The Proprietary Focus of the Leading Wirehouses Separately Managed Accounts (SMA) Program is Dwindling, More So at Smith Barney than Merrill Lynch Move? Delete? Relevant only to money managers? Wirehouses Separately Managed Accounts (SMA) Movement Away from Proprietary Focus Smith Barney Merrill Lynch Sold asset management division off to Legg Mason No longer has a presence in investment management, and does not own Legg Mason Sold asset management division to BlackRock However, owns a large share of BlackRock, so program could still to be considered largely proprietary Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Almost Half of Separately Managed Accounts (SMAs) Net Flows May Be Coming From IRA Rollovers by 2008 Separately Managed Accounts (SMAs) Predicted 2008 Net Flows By Source Source: 4/05 CPA Wealth Provider (Money Management Institute (MMI)); 9/04 Financial Research Corporation (FRC) Newsletter; Tiburon Research & Analysis

Separately Managed Account (SMAs) Program Sponsors Almost Half of Program Sponsors Expect Separately Managed Account (SMA) Sales to Grow at Least 10% Annually Not Tiburon format Separately Managed Account (SMAs) Program Sponsors Annual Sales Growth Expectations Source: 12/27/02 Keefe, Bruyette, & Woods Report; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Use The Share of Financial Advisors Using Separately Managed Accounts (SMAs) is Expected to Continue to Rise Well into the Future Needs real data; 40% seems too high if counting all FAs Separately Managed Accounts (SMAs) Use By Financial Advisors Do Not Use Use Source: Tiburon Research & Analysis

Financial Advisors by Share Who See their Most Financial Advisors See Their Separately Managed Account (SMA) Businesses Growing At Least a Moderate Amount in the Future Financial Advisors by Share Who See their Separately Managed Accounts (SMAs) Business Growing Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

By Talking Points Preference Many Financial Advisors Do Not Seem Too Excited About Explaining the Intricacies of Separately Managed Accounts (SMAs); Many Would Prefer to Give Civics Lessons Financial Advisors By Talking Points Preference Source: 11/17/06 Envestnet Conversation (Harris); Tiburon Research & Analysis

Driving Factors For Asset Growth in Separately Managed Accounts (SMAs) Asset Growth in Separately Managed Accounts (SMAs) will be Driven by Five Factors, Including Falling Minimums and Fees 401K repeated elsewhere; move 401 k & index points? Driving Factors For Asset Growth in Separately Managed Accounts (SMAs) Falling Account Minimums Falling Fees Mutual Funds Losing Favor Increased Usage Inside 401K Plans Emergence of Indexed Separate Accounts Product coming down market, driving up penetration Lowered costs to clients helping drive up usage Asset spread between mutual funds & separate accounts should narrow Mutual fund scandals tainting their reputation with the public The idea of management inside 401K assets is growing in popularity Might actually be mutual fund wrap accounts as opposed to separately managed accounts Might be used more in annuities sold to 401K plans Indexed separate accounts, a huge favorite with institutions, are a possible innovation on retail side If this happens, their lower fees may attract larger retail accounts Source: 7/3/06 Defined Contribution & Savings Plan Alert; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Falling Account Minimums in Separately Managed Accounts (SMAs) are Bringing the Products Down Market, which will Help Drive Up Assets Separately Managed Accounts (SMAs) Minimum Account Sizes ($ Thousands) Source: Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Falling Fees in Separately Managed Accounts (SMAs) will Also Help Drive Up Assets Under Management Separately Managed Accounts (SMAs) Average Fees Source: Tiburon Research & Analysis

By Expectations on Separately Managed Account (SMA) Fees in Future Almost Two-Thirds of Program Sponsors Agree that Separately Managed Account (SMA) Fees will Decline in the Future Program Sponsors By Expectations on Separately Managed Account (SMA) Fees in Future Source: 12/27/02 Keefe, Bruyette, & Woods Report; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Versus Mutual Fund As Mutual Funds Perhaps Continue to Lose Favor, the Spread in Assets Under Management Between them and Separately Managed Accounts (SMAs) is Likely to Narrow Not Tiburon format Separately Managed Accounts (SMAs) Versus Mutual Fund Assets Under Management ($ Billions) Source: 8/23/05 Fund Fire; 5/05 Advising Boomers; 7/19/04 Barron’s (Cerulli Associates); 4/04 Research Money Management Institute (MMI); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) & Mutual Funds Separately Managed Account (SMA) Assets Under Management are Expected to Outgrow Mutual Fund Assets in Percentage Terms, by a Nearly Three-to-One Margin Not Tiburon format Separately Managed Accounts (SMAs) & Mutual Funds Expected Percentage Growth Rates (2005-2010) Source: 5/7/03 American Banker; 10/02 US Banker (FRC); 7/02 On Wall Street; 5/27/02 Merrill Lynch Presentation (Cerulli) (Doe); 1/02 Lockwood Research; 12/01 Financial Planning (FRC); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) & Mutual Funds As Impressive as that Might Sound, Dollar Growth in Mutual Funds will Still Dominate that in Separately Managed Accounts (SMAs) Not Tiburon format Separately Managed Accounts (SMAs) & Mutual Funds Expected Dollar Growth Source: 5/7/03 American Banker; 10/02 US Banker (FRC); 7/02 On Wall Street; 5/27/02 Merrill Lynch Presentation (Cerulli) (Doe); 1/02 Lockwood Research; 12/01 Financial Planning (FRC); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Versus Mutual Mutual Funds Experienced $195 Billion in Net Flows in 2005, Compared to $52 Billion in Separately Managed Accounts (SMAs) Not Tiburon format Separately Managed Accounts (SMAs) Versus Mutual Net Flows ($ Billions) Source: 5/1/06 Financial Planning (Cerulli Associates; FRC); Tiburon Research & Analysis

Almost Two-Thirds of Program Sponsors Believe that Separately Managed Accounts (SMAs) will Take Market Share from Mutual Funds Program Sponsors by Expectations of Separately Managed Accounts’ (SMAs’) Ability to Take Market Share from Mutual Funds Source: 1/23/03 Wealth Management Letter; 12/27/02 Keefe, Bruyette, & Woods Report; 12/3/01 Fund Marketing Alert (FSC); 12/01 Financial Planning (FRC); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Program Sponsor Comment Some Program Sponsors Have Lofty Expectations of Separately Managed Accounts’ (SMAs’) Ability to Take Assets Away from Mutual Funds Needs a real source of the quote Separately Managed Accounts (SMAs) Program Sponsor Comment “As much as 30%-50% of the mutual fund assets controlled by the affluent will indeed switch to separately managed accounts over the next three to five years” - 2003 Source: 1/23/03 Wealth Management Letter; Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Program Sponsor Comment One Program Sponsor Says the Shift in Assets from Mutual Funds to Separately Managed Accounts (SMAs) Might Reach $1.0 Trillion Needs a real source of the quote Separately Managed Accounts (SMAs) Program Sponsor Comment “This shift could amount to as much as $600 billion to $1.0 trillion” - 2001 Source: 12/3/01 Fund Marketing Alert; Tiburon Research & Analysis

Three-Quarters of Financial Advisors Agree that More of their Gross Sales will come from Separately Managed Accounts (SMAs) than Mutual Funds within Five Years Financial Advisors By Agreement that More Sales will Come From Separately Managed Accounts (SMAs) than Mutual Funds Source: 11/14/05 Business Wire (Citigroup); Tiburon Research & Analysis

Sought More Transparency Advisor Accountability The Mutual Fund Scandals of the 2000s Reportedly Helped Instigate the Flow of Assets Under Management from Mutual Funds into Separately Managed Accounts (SMAs), as Investors Sought More Control, Transparency, & Accountability with their Investments Consequences of Mutual Fund Scandals on Investors that Have Helped Separately Managed Accounts (SMAs) Tighten Sought More Transparency Sought Higher Advisor Accountability Sought More Control Frustrated by mutual fund scandals, investors sought greater amounts of disclosure and control that they felt was offered by separate accounts Transparency became a primary focus for investors Separately managed accounts provide all trade confirmations and daily holdings information Mutual funds only provide quarterly reports on holdings which is typically stale information Investors felt separate accounts provided higher advisor accountability Source: 12/18/03 Financial Planning Newsletter; 12/15/03 Money Management Executive; 12/10/03 Wall Street Journal; Tiburon Research & Analysis

Advisor Accountability Despite Those Feelings, One Has to Question Whether Separately Managed Accounts (SMAs) Really Deliver the Higher Control, Transparency, and Advisor Accountability Investors Felt they were Getting Consequences of Mutual Fund Scandals on Investors that Have Helped Separately Managed Accounts (SMAs) Higher Advisor Accountability More Control More Transparency Separate accounts are still a largely unwieldy & difficult to understand idea to investors All the trade confirmations & daily holdings information provided by separately managed accounts can be overwhelming, in effect hindering clients’ understandings of what they held The advent of separately managed accounts actually added to the advisors’ information advantage, since they were initially a product that could only be bought through the wirehouses & other large firms Separate account performance data is harder to come by than mutual fund data Source: Tiburon Research & Analysis

Managed Accounts Program Sponsors Regardless, Over Half of Managed Account Program Sponsors Believe That the Wall Street Scandals Will Increase Clients’ Interest in Separately Managed Accounts (SMAs) Managed Accounts Program Sponsors By Opinions on the Impact of Wall Street Scandals On Separately Managed Accounts (SMAs) Source: 12/27/02 Keefe, Bruyette, & Woods Report; Tiburon Research & Analysis

Program Sponsors & Money Managers Alike Agree that Separately Managed Accounts (SMAs) May Benefit from Recent Mutual Fund Troubles Comments May Benefit Some “The recent scandals in the mutual fund world have provided opportunities to cross fertilize other investment channels such as separately managed accounts” “If 12b1 fees are pulled back, there will be a ton of free dollars floating around” Huge Benefit “I read somewhere that 80% of mutual fund dollars will eventually be moved into tax-advantaged accounts” Source: 3/25/04 Citigroup Asset Management Conversation (Parker); 3/22/04 Money Management Institute (MMI) Conversation (Davis); Tiburon Research & Analysis

Instances of Separately Managed Accounts (SMAs) Being Some Suggest That Separately Managed Accounts (SMAs) Sales Do not Steal Assets From Mutual Funds But Instead are Additive Instances of Separately Managed Accounts (SMAs) Being Additive To Mutual Funds Rather than Zero Sum Rising Manager Mutual Fund Use Supplement Mutual Fund Positions Other Sector Usage Stays Same As advisors become familiar with separately managed account manager strategies, they are more likely to use the same company’s mutual funds as well Separately managed accounts are often used as a supplement to mutual fund positions Advisors are able to tap into mutual fund strengths in certain strategies (e.g., sector rotation and emerging market investments) Source: 9/03 Registered Representative; 10/14/02 Fund Marketing Alert; Tiburon Research & Analysis

Frankly, Some Entity Should Eventually Study Performance of Separately Managed Account (SMA) Programs Versus Mutual Fund Wrap Account Programs Move? Comments -- Source: Tiburon Research & Analysis

Share of 401K Plan Sponsors Offering Investment Management Services 401K Plans are Another Opportunity; Today, Only One-Quarter of Plan Sponsors Offer Investment Management Services; Industry Experts Expect All will within Five Years Needs update Share of 401K Plan Sponsors Offering Investment Management Services Maybe should merge these pages to distribution chapter point on same issue Source: 12/04 Money (Hewitt Associates); Tiburon Research & Analysis

Firms Considering Using Separately Managed Accounts (SMAs) There are Several Notable Firms Considering Using Separately Managed Account (SMA) Inside of 401K Plan Annuities Firms Considering Using Separately Managed Accounts (SMAs) Inside of 401K Plan Annuities Tighten Gallatin Asset Management Mass Mutual AIG VALIC Said asset allocation portfolios used in 401K plans are easy to implement & for clients to understand, and SMAs may provide that same benefit -- -- Source: 7/3/06 Defined Contribution & Saving Plan Alert; Tiburon Research & Analysis

Reasons Separately Managed Accounts (SMAs) Despite the Excitement Over Separately Managed Accounts (SMAs) and Other Asset Drivers, there are Significant Factors that May Lead to Slowed Separately Managed Accounts (SMAs) Assets Under Management Growth Reasons Separately Managed Accounts (SMAs) Assets Under Management Growth May Be Slow Independent Reps’ Usage May Remain Low Great Managers May Bail on Separately Managed Accounts Fee-Only Financial Advisors’ Resistance -- As the fastest growing channel, their preferences will be huge Likely to prefer ETFs to separate accounts Low share of revenues come from fees now Not likely to use separately managed accounts any more because their average account size is $140,000 Great managers may tire of margin compression in separately managed account platforms, and go back to serving institutional & very high net worth clientele exclusively -- Source: Tiburon Research & Analysis

US Fiduciary Executive on One Industry Source Made the Point Visually About the Future of Separately Managed Accounts (SMAs) Tighten US Fiduciary Executive on the Future of Separately Managed Accounts (SMAs) “The separately managed accounts iceberg is melting” Scott MacKillop US Fiduciary 2006 Source: 11/9/06 US Fiduciary Conversation (MacKillop); Tiburon Research & Analysis

Multiple Style Portfolios Move to Unified Managed Accounts (UMAs)? Comments -- Source: Tiburon Research & Analysis

Multiple Style Portfolios Assets Under Management Multiple Style Portfolios May Soon Rival Mutual Fund Wrap Accounts in Assets Under Management, as they are Expected to Surpass $500 Billion in 2012 Multiple Style Portfolios Assets Under Management ($ Billions) Source: 9/18/06 Securities Industry News (Aite Group); 9/04 Financial Research Corporation (FRC) Newsletter; 1/23/03 Financial Research Associates (FRA) Conference Brochure (FRC); 10/02 Bank Investment Marketing (FRC); 9/30/02 AdvisorPort Presentation (DeAngelis); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Assets Under Management Multiple Style Portfolios are Expected to Gain on Separately Managed Accounts (SMAs) Fast, Growing from 14% of the Broad Separately Managed Account Market Today to 30% within Five Years Separately Managed Accounts (SMAs) Assets Under Management By Program Type Unified Managed Accounts Multiple Style Portfolios Separately Managed Accounts (SMAs) Source: 9/18/06 Securities Industry News (Aite Group); Tiburon Research & Analysis

Separately Managed Accounts (SMAs) Assets Under Management While Multiple Style Portfolios Now Represent Less than 10% of Separately Managed Accounts (SMAs) Assets Under Management Now, that Share is Expected to Double by 2012 Align to prior page? Separately Managed Accounts (SMAs) Assets Under Management By Product Type The source that claimed the 30% estimate for 2010, FRC, said that MSPs only represent 10% of separately managed accounts assets today Separately Managed Accounts Multiple Style Portfolios Source: 9/8/06 Dow Jones Newswire (Cerulli Associates); 9/5/06 American Banker (Money Management Institute (MMI)); 7/10/06 Fund Action (FRC); Tiburon Research & Analysis

Multiple Style Portfolio Proliferation Drivers Multiple Style Portfolios will Spread Across the Industry Due to a Continued Focus by Established Players, and the Entrance of New Ones, as Well as the Positive Evolution of the Programs Multiple Style Portfolio Proliferation Drivers Established Players New Players Program Evolution Firms with established multiple style portfolios are sending huge shares of all new fee-accounts assets into their programs Smith Barney Wells Fargo Advisors Number of programs estimated to reach 250 in 2007 Second generation programs to give financial advisors more control Source: 11/7/06 Envestnet Conversation (Nicolaou); 5/03 Registered Representative; 3/20/03 Investment Advisor; 10/22/02 Legg Mason Conversation (Adams); 10/1/02 Citigroup Presentation (Parker); Tiburon Research & Analysis

Assets Under Management Wells Fargo Advisors is Also Excited About Its Established Multiple Style Portfolio Program, Sending Nearly Half of All Its New Managed Accounts Assets Under Management to Such Appendix page? Wells Fargo Advisors New Managed Account Assets Under Management By Product Source: 5/03 Registered Representative (Cerulli Associates); Tiburon Research & Analysis

Multiple Style Portfolios Programs New Entrants will Also Help Drive Growth; the Number of Multiple Style Portfolio Programs May Reach as High as 1,850 by 2012 Needs update Multiple Style Portfolios Programs Source: 10/1/02 Citigroup Presentation (Parker); Tiburon Research & Analysis

Program Sponsors & Money Managers Program Sponsors & Money Managers Rate the Future of Multiple Style Portfolios Surprisingly Only Moderate, with an Average Score of Just 7.2 Program Sponsors & Money Managers Ratings of the Future of Multiple Style Portfolios (1-10; 10 = High) Average 7.2 Source: 11/10/06 SEI Investments Conversation (Schaeffer); 11/10/06 Envestnet Conversation (Fowler); 11/10/06 Envestnet Conversation (Hardwick); 11/9/06 US Fiduciary Conversation (MacKillop); 11/9/06 Capital Markets Consultants Conversation (Mendelson); 11/9/06 Harpeth Partners Conversation (Johnson); 11/7/06 Envestnet Conversation (Harris); 11/7/06 Envestnet Conversation (O’Brien); Tiburon Research & Analysis

Comments Positive Comments “It was all the buzz when started” Program Sponsors & Money Managers Had Generally Good Things to Say About the Future of Multiple Style Portfolios, with Some Lower Score be Explained by the Need for Generation Two and Three Products Comments Positive Comments “It was all the buzz when started” “Able to explain all managers together” “Less paperwork” “Helps to get advisors away from hot dot chasing” “Assets are growing” “Will play a greater role in the future” “Generations two and three will make this product rock” “This is the most profitable product for a TAMP” Negative Comments “Current generation products are not that good” “Many are not comfortable with a pre-packaged product” “More flexibility needs to be built in” “Generation two will help us overcome a lot” “Pretty soon you will be able to pick one of ten managers” “Some sponsors have been reluctant to lower pricing because they price based on trades, not accounts” “Less important because clients will have less money” Source: 11/10/06 SEI Investments Conversation (Schaeffer); 11/10/06 Envestnet Conversation (Fowler); 11/10/06 Envestnet Conversation (Hardwick); 11/9/06 US Fiduciary Conversation (MacKillop); 11/9/06 Capital Markets Consultants Conversation (Mendelson); 11/9/06 Harpeth Partners Conversation (Johnson); 11/7/06 Envestnet Conversation (Harris); 11/7/06 Envestnet Conversation (O’Brien); Tiburon Research & Analysis

Full-Service Brokers Opinions Despite Excitement For Such, Full-Service Brokers Have Not Bought Into Multiple Style Portfolios Quite Yet, Rating their Future As Only a 6.8, With Consistently Mediocre Scores Full-Service Brokers Opinions About Future of Multiple Style Portfolios (1 – 10; 10 = High) Average 6.8 Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Full-Service Brokers Mention that Multiple Style Portfolios are Valuable in Some Instances, But May Not Have a Bright Future as is Thought by Some Industry Leaders Comments Value of Simplification “I like the concept very much – less paperwork means my clients are much happier” “They have a very bright future” “Multiple style portfolios are terrific for young brokers; the young guys without a lot of experience in the business can deliver their clients the expertise of an overlay manager to handle the allocation” “They are very attractive for smaller accounts that can gain better diversification than in a traditional separately managed account program” Not Crucial to Future of Industry “No, I do not want to do that; I am too much of a control freak to give up that much responsibility” “Outsider overlay managers do not know my clients as well as I do” Source: 10/21/05 Legg Mason Rep Conversation (Jennings); 10/21/05 Legg Mason Rep Conversation (Freimen); 10/21/05 Legg Mason Rep Conversation (Donovan); 10/17/05 Legg Mason Rep Conversation (Rosenwald); 10/17/05 Legg Mason Rep Conversation (Strosnider); Tiburon Research & Analysis

Reasons Multiple Style Portfolios Asset Growth May Be Slow Despite the Excitement Over Multiple Style Portfolios and the Other Asset Drivers, there are Significant Factors to Watch that May Lead to Slowed Multiple Style Portfolios Asset Growth Reasons Multiple Style Portfolios Asset Growth May Be Slow Great Managers May Bail on Multiple Style Portfolios Fee-Only Financial Advisors’ Resistance Independent Reps’ Usage Will Remain Low -- With FOFAs being the fastest growing channel, their preferences will be huge Likely to prefer ETFs to separate accounts Low share of revenues come from fees now Not likely to use separately managed accounts any more because their average account size is $140,000 Great managers may tire of margin compression in separate account platforms, and go back to serving institutional & very high net worth clientele exclusively -- Source: Tiburon Research & Analysis

on Movement to Multiple Style Portfolios One TAMP Executive Raised a Word of Caution Regarding the Expected Movement to Multiple Style Portfolios TAMP Executive on Movement to Multiple Style Portfolios “Some custodians are reluctant to lower their pricing on multiple style portfolios because they price on trades, not accounts” Eric Fowler Envestnet 2006 Source: 11/17/06 Envestnet Conversation (Fowler); Tiburon Research & Analysis

Tiburon Strategic Advisors Comments Focus on corporate-level strategy Serve senior executives only at financial services companies Key services: market seminars, market research, & strategy consulting Served over 450 corporate clients and completed over 2,400 projects since 1998 Host semi-annual CEO Summits, offer free weekly research releases, and offer free business benchmarking tools for all types of advisors Chip Roame background McKinsey & Company Charles Schwab & Company Tiburon since 1998 Source: Tiburon Research & Analysis