Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management GREED IS NOT GOOD! Presented by Richard G. Stone Founder & President, Stone & Co. Limited

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management The point is, ladies and gentleman, is that greed -- for lack of a better word -- is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind. And greed -- you mark my words -- will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Michael Douglas as Gordon Gekko in Wall Street

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management In The News Over 15 Years Later …

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management What Went Wrong?

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Executive compensation grossly disproportionate to corporate results  Stock promotion (IPOs) that has gone to an extreme in the creation of very questionable or unproven business concepts *Source: “Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Misuse of corporate funds  Trading on insider information, particularly by managers exercising stock options that have rewarded short-term thinking *Source: “Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Misrepresentation of the true earnings and financial condition of too many companies  Obstruction of justice by concealing activities or destroying evidence *Source: “Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management Who Were the Transgressors?

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Passive, non-independent and rubber- stamping boards of directors  Non-accountable CEOs and senior management involved in serious conflicts of interest *Source: “Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Transaction-driven investment bankers and market makers, and biased and non- independent analysts  Non-independent public accounting firms *Source: “Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Regulators paying more attention to the manifestations of the problem than to the systemic conflicts of interest that are at the core of poor governance practices *Source: “Corporate Governance” (McGraw-Hill Executive MBA Series 2003, p. 229, authors John L. Colley, Jr. et al.)

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Shoot the messenger  Media always dodges bullet  Investor questions trustworthiness of Advisor  Advisor feels little control Result:

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Canada is ahead of the U.S.  NI  FundSERV Canadian Reality:

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management  Not a game of statistics  Simple due diligence  Educate your clients that there is a Due Diligence Process Solution: Take control!

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management 6 Questions to Ask to Ensure Good Corporate Governance

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management What is your company’s policy on the responsibilities you have toward unitholders? 

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management What is your company’s policy on their role as representing unitholders with respect to the voting of shares, and other shareholder issues? 

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management Do you publicly disclose how your company has voted their shares in all holdings? If so, where do I find this information? If not, Why?

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management What is your company’s viewpoint toward executive and management option plans? 

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management What initiatives is your company taking to deal with the shareholder issues we face?

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management In general, please explain what you see as the issues facing your unitholders and shareholders today? Can you define your policies and attitudes toward these issues? 

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management “…a man with a briefcase can steal more money than any man with a gun …” - Don Henley

Greed is NOT Good! CIFP Four Educational Streams: Wealth Management Tax Planning Estate Planning Risk Management Sample corporate governance due diligence questions: What is your company’s policy and/or viewpoint on the responsibilities you have toward unitholders? What is your company’s policy and/or viewpoint on their role as representing unitholders with respect to the voting of shares, and other shareholder issues? Do you publicly disclose how your company has voted their shares in all holdings? If so, where do I find this information? If not, Why? What is your company’s viewpoint toward executive and management option plans? Do you agree or disagree with these plans? What have you done to change them? What have you done to properly account for them in the research of your holdings of the portfolios? How have you voted shares in the past with respect to option compensation plans? What initiatives (if any) is your company taking to deal with the shareholder issues we face? For example: poor corporate governance, option compensation plans, poor dividend policies, complex and misleading accounting policies, lack of disclosure of material information, and any other issues that you feel are important? Provide specific examples of how your company has dealt with these issues in the past? And/or initiatives to be taken in the future? In general, please explain what you see as the issues facing your unitholders and shareholders today? Can you define your policies and attitudes toward these issues?