JB&J TEAM WORKBOOK Decisions and Notes for Modules 1 – 5 BSMART Business Simulation Management and Relationship Training

Vision, Mission & Strategy The Foundation of a Business MODULE ONE

Your Vision Our vision is to develop an integrated firm and team by leveraging our individual talents to provide value to our clients, partners and associates. Collectively, the teams that serve our clients will have deep knowledge in the areas of accounting, tax, investments and planning. We will strive to be our clients most trusted advisor helping quarterback the myriad of complexities that come with wealth. We will offer all of these comprehensive services with personalized and prompt client service. Our goal is to simplify our clients wealth and financial situation so that they are able to do what they want to do. Over the next five years, we will position our business for growth and sustainability. Generating referrals from clients and developing our centers of influence will be central to our new business efforts. We will evolve our governance structure and establish a succession planning and compensation structure that will help grow the business and build our next generation of firm leaders. We will strengthen our team because we know that it is critical to our success and that of our clients. A vision statement describes the future state you are looking to create – your desired end-game for the firm in 2020.

Your Mission Our mission is to simplify the wealth and lives of our clients so they can pursue their passions. We will help you navigate all of the complexities that come with wealth. Our experience and dedicated team of professionals will help you build a comprehensive wealth plan to grow and protect your assets over the generations. Notes: In terms of our services, We offer customized solutions tailored to each client, their circumstances, and goals. We build and implement a comprehensive and individualized wealth plan and investment strategy towards the end of growing and protecting their assets. We are their concierge, always ready to help them with their unique request A mission statement describes why the organization exists – its core purpose.

Your Strategy 1.Professional partners with a minimum 30 years experience 2.Unique knowledge (tax, accounting, executive benefits and compensation) 3.Full end-to-end servicing of UHNW clients (i.e. Wealth Transfers, Legacy Planning and Integration of all Services) 4. High touch servicing around all our relationships Questions that may help: What makes us better than the competition? Why do customers choose us? What makes us unique? What do we have that others do not? What do we do that cannot be replicated? Why are we successful? What created our success to date? Our competitive advantage is…

SWOT Analysis 4 StrengthsWeaknesses 30 plus years experience Work in silos Comprehensive end to end offering, tax, planning, exec benefits, wealth transfer No succession plan Investment objectivity No growth Uniquely crafted relationships Age of clients Solid, stable, client base Age of partners Concierge services No career path/dependent on lead advisors Lack of referral network

SWOT Analysis 4 OpportunitiesThreats Rebranding efforts will differentiate us from our competition Less IPO’s and less deferred compensation plans Forming relationships with new CEO’s amongst both public and private corporations (to include Tech companies) Competitors winning business that we should be winning Building more Referral Growth & COI Alliances Diminishing amount of new referrals (Additionally, we are no longer part of Anderson which eliminates our previous referral (pipeline) Seeking talented external candidates to bolster our team (Succession Planning and Compensation Plan initiatives will enable a competitive advantage to secure talent) Aging client base is less influential and as a result our audience with COI’s has come to a halt. Leveraging our expertise to help companies structure different compensation plans (more equity). Market is likely more attractive elsewhere to our current employees because career paths are limited and Firm growth is stagnant.

Initiatives and Notes Initiatives for Improvement Notes: We will break down the silo’s in our organization, leverage the talents and expertise of each member of our team, and work together to serve our clients. We will establish Teams that are focused on delivering superior client service which means that we will be accessible to our clients, proactive in our efforts to serve them and keep their best interests in mind. We will put in place a succession plan (including a new compensation plan) that will ensure the sustainability of our business and solidify a governance plan Write down and agree on Strategy initiatives in your firm and elect a “champion” for each initiative. Notes Improvement OpportunityWho Will Complete 1. Re-branding of Company by going through an exhaustive Sales and Marketing engagement (result will be new Firm Name, collateral, and web-site). A Team. Led by Alice (new Owner) and including David (name is not on the door) and JJ (acting CEO) 2. Establish a Succession Plan that includes a new compensation strategy and governance. A Team. Led by Tico (Partner and degree in Economics) including Rachel (Co- Founder) and JJ (has already sold some equity) 3. Form Teams and establish workflows including process and technology to provide a comprehensive client experience. A Team. Led by Beth (acting CEO/COO) including Alice (Advisor) and Rachel (Co- Founder) 4. Drive organic growth including developing a referral network and evaluating new streams for diversification (Foundations? Retirement?) A Team. Led by JJ (Legacy co-founder) including Alice (Advisor) and Rachel (Co- Founder) 5. Initiate a client Advisory Board focused on client satisfaction (potentially a survey) and client retention. A Team. Led by David (former career in WM consulting) including Rachel (co- founder) and JJ (long term clients)

Growth Building the Firm MODULE TWO

CHARACTERISTICS OF THE IDEAL CLIENT CHARACTERISTICS OF THE NOT-SO-GREAT REFERRAL Business You Would Like To Win At least 5 million in assets Low investable assets, small accounts Executives at Fortune 500 firms Individuals that don’t need complex planning or related services High earning younger professionals to nurture Clients searching solely for yield/investment performance Business Owners Aging clients that are not accumulating assets but are depleting. Requiring complex services, CPA, taxes, estate planning CHARACTERISTICS OF THE IDEAL COI CHARACTERISTICS OF THE NOT-SO-GREAT COI COI Relationships You Would Like To Have Access to Fortune 500 Executives and their teams Those who offer similar services to ours Professionals with multi generational relationships in UHNW space (attorney’s, CPA’s) COI’s who share referrals with multiple parties who offer the same services as we do Professionals offering complimentary services to ours in the UNHW space (concierge services) Those who charge an extremely expensive fee for their referrals Access to BoardsCOI’s who cannot articulate our value proposition Ideal Profile

Initiatives and Notes Initiatives for Improvement 1.These Initiatives for Improvement are driven from our Strategy Initiatives (see Slide 8). 2.These Initiatives may be refined as Strategy Initiatives #1, #2, #4, and #5 are formalized. 3.To drive the value of our Firm, We will need to accelerate organic growth by establishing a consistent referral base. winning ‘younger clients’ that are adding funds as opposed to withdrawing align compensation so that Jr Partners are incented to win new business Write down and agree on Growth initiatives in your firm and elect a “champion” for each initiative. Notes Improvement OpportunityWho Will Complete 1. Rebranding of CompanyAlice 2. Develop a Referral NetworkDavid 3. CompensationTico 4. Establish Advisory Board including Client Satisfaction Survey Rachel 5. Evaluate new streams of revenue for diversification JJ

Staffing and Compensation Attracting, Retaining and Organizing Talent MODULE THREE

Organizational Chart Current Organizational Chart- Changes may be made

Compensation Philosophy The compensation plan will support our firm’s mission, strategy, and values. We will pay for performance, skills and competencies, development and growth. The compensation structure will encourage recruitment, retention, and motivation of employees so that the organization can achieve its mission and objectives. We will accomplish this by paying salary in the mid-to-high range but also offering either aggressive incentive compensation or equity Our compensation structure may include base salary, health and other benefits, and performance-based pay appropriate to the financial services profession and position. Our compensation system will include periodic adjustments to pay ranges based on changes in the marketplace, subject to the firm’s financial constraints. The marketplace adequacy of the compensation structure will be judged in terms of total compensation, including benefits; the total packages will be competitive with the marketplace, subject to the firm’s financial constraints. The compensation structure will be linked to an effective performance management system with individual growth and development as well as professional achievement goals. Depending on the role of the employee, our plan may include base salary, incentive pay, benefits and non-financial rewards What is your compensation philosophy?

Initiatives and Notes Initiatives for Improvement 1.These Initiatives for Improvement are driven from our Strategy Initiatives (see Slide 8). 2.These Initiatives may be refined as Strategy Initiatives #2 and #3 are formalized. 3.We, as a Firm, recognize that we do not have career paths established and thus our employees are at risk of leaving. 4.We also recognize that our organizational alignment needs to be changed to create a link between compensation strategy and business results. Write down and agree on Human Capital initiatives in your firm and elect a “champion” for each initiative. Notes Improvement OpportunityWho Will Complete 1. Organization StructureRachel 2. Job descriptions definedBeth 3. Compensation for labor/equityJohn 4. Performance appraisals/metricsTico 5. Human Capital PlanningAlice Handouts in the Appendix Advisor HR Solutions Sample Compensation Profiles

Operations and Technology MODULE FOUR

Role of Operations Service and Deliverables Component-level Role Tax planning and preparation Financial Planning Investment Management Executive benefits and compensation analysis Wealth transfer and generation planning Concierge client services Financial PlanningInvestment Management money movement client reporting trade execution basic account maintenance RMDs open accounts research statement execution reporting

Teams/Technology that deliver services Tax planning and preparation Team Team Lead - Partner (currently, getting paid out of Company earnings) CPA (minimum Sr PM pay, $75k) CSA ($40k annually) Financial Planning Team Lead - Partner (currently, getting paid out of Company earnings) CPA (minimum Sr PM pay, $75k) CSA ($40k annually) – career path to pursue CFP Investment Management Team Lead - Partner (currently, getting paid out of Company earnings) CPA acting as Sr PM (Mid Sr PM pay, $110k) CSA ($40k annually) – note: career path to pursue CFA Executive benefits and compensation analysis Team Lead - Partner (currently, getting paid out of Company earnings) CSA ($40k annually) – note: career path to pursue CFA Wealth transfer and generation planning Team Lead - Partner (currently, getting paid out of Company earnings) CPA (minimum Sr PM pay, $75k) CSA ($40k annually) – note: career path to pursue CFA Concierge client services Office Manager (Mid pay, $48k) Note: Review of the 2013 Benchmarking Study results for technology spend reveals that our Technology Line item is drastically below our peers. For peer firms ($5mm in revenue), annual technology spend is $214k as compared to our $25k. We also will need Risk Management Software. PMR - $104k CRM - $39k Client Reporting - $31k Fee Billing - $15k Document Management - $ 11k Financial Planning - $14k

List and Documents Services Process 1.During initial meeting, Team (see Slide 18) will secure last years tax returns. 2.Quarterly meetings with client to discuss tax status. 3.CPA will complete tax return 1.Comprehensive tax return preparation including financial planning to be certain that tax returns are efficient Purpose Budget 1.Labor to include a Team, in-depth initial assessment, CFP and CFP Jr time to analyze, and an additional meeting time with Client. 2.Technology to perform analysis (see Slide 18) Resources Evaluate how well resource components are satisfied. AvailableScalable AttainableSustainable This is a labor intensive service. As such, it us also a good training ground for developing talent (i.e Jr CPA’s). Process flow productivity is maximized by using the CRM document flow. Maintenance capital is required to be certain that technology is current. Tax Planning and Preparation

List and Documents Services Process 1.During initial meeting, Team (see Slide 18) is assigned that is focused on financial planning efforts. 2.CFP in training performs initial analysis using “software package” 3.CFP reviews analysis 4.Analysis is reviewed with Client (face-to-face visit) Purpose Comprehensive financial planning to ensure that wealth is preserved. The objective is to clearly understand cash flow (spending requirements) so that Client can have comfort with their cash flow demands. Budget 1.Labor to include a Team, in-depth initial assessment, CFP and CFP Jr time to analyze, and an additional meeting time with Client. 2.Technology to perform analysis (see Slide 18) Resources Evaluate how well resource components are satisfied. AvailableScalable AttainableSustainable This is a labor intensive service. As such, it us also a good training ground for developing talent (i.e Jr CFP’s). Process flow productivity is maximized by using the CRM document flow. Maintenance capital is required to be certain that technology is current. Financial Planning

List and Documents Services Process 1.During initial meeting, Team (see Slide 18) is assigned that is focused on investment management. 2.CFA uses Financial Planning analysis (targeted % gain) to identify reallocation sell transactions, and recommend asset allocation including specific investments. 3.CFA reviews analysis 4.Analysis is reviewed with Client (face-to-face visit) Purpose Investment Management is not focused on Alpha; rather risk management. Comprehensive (and sophisticated) wealth management (including tax and financial planning) is the core competency. Leveraging the core competency, the Team and the Client will identify a ‘targeted % for asset growth (likely 3-5%) and then detail an investment plan with the least risk. Budget 1.Labor to include a Team, in-depth initial assessment, CFP and CFP Jr time to analyze, and an additional meeting time with Client. 2.Technology to perform analysis (risk management software) Resources Evaluate how well resource components are satisfied. AvailableScalable AttainableSustainable This is a labor intensive service. As such, it us also a good training ground for developing talent (i.e Jr CFA’s). Process flow productivity is maximized by using the CRM document flow. Maintenance capital is required to be certain that technology is current. Investment Management

List and Documents Services Process 1.During initial meeting, Team (see Slide 18) is assigned that is focused on the clients Company benefits and compensation.. 2.CFA works closely with Human Resources to understand, manage, and leverage resources from the Company.. 3.This analysis and on-going management is an input to the overall financial planning and investment management objectives/process. Purpose Our Team spends significant time analyzing (and knowing every dotted I and crossed t) to fully comprehend the Benefits and Compensation packages for our C-level Execs. This tailored focus allows us to efficiently leverage the resources available to our clients via their Company. Furthermore, it is scalable; allowing us to seek other peer Executives at said company. Budget Labor to include a Team, in-depth initial assessment, CFP and CFP Jr time to analyze, and additional meeting time with Client and Company Human Resource department. Resources Evaluate how well resource components are satisfied. AvailableScalable AttainableSustainable This is a labor intensive service with subject matter expertise. As such, it us also a good training ground for developing talent (i.e Jr CFA’s) This service also provides exposure to future clients thereby enabling development of Jr Advisors. Process flow productivity is maximized by using the CRM document flow. Executive benefits and compensation analysis

List and Documents Services Process During initial meeting, Team (see Slide 18) is assigned that is focused on maintaining relations with the entire family. Leveraging CRM, Team Leader is focused on building relationships with each key Family member; potentially facilitating events to build Family relationships. Purpose Our Team’s depth and heritage in Estate and Tax Planning helps us ensure that wealth is transferred to the next generation. Furthermore, this Service is an area for future client growth maintaining our clients assets into the next/ younger generation. Budget Labor to include one Team lead. Annual Family Appreciation Event. Offered to all Clients. One annual Client meeting that is focused solely on getting the ‘next generation’ involved. It could be a dinner, a meeting, a small Event, etc. However, it is beyond the standard’ Annual Meeting because it is focused on ‘next generation’ Resources Evaluate how well resource components are satisfied. AvailableScalable AttainableSustainable 1.CRM 2.Significant budget for an annual Family Appreciation Event 3.Significant budget for annual client meeting focused on ‘next generation’. Wealth transfer and generation planning

List and Documents Services Process During initial meeting, the Client Service Associate is empowered to be the ‘go-to’ person for the Client. For any type of ‘concierge type service’ request, the Client Service Associate is responsible for responsive and thorough delivery to the Client. The CSA will delegate this to the Office Manager for completion. The resources are infinite within JB&J; meaning she may need to leverage everyone. Concierge type services will be logged in a database, accessible to all employees. Purpose This service epitomizes our tag-line. We want to simplify the wealth and lives of our clients so they can pursue their passions. Budget Labor to include Office Manager ($48k) Technology to include maintaining a database (part of full technology budget). A budget line item for costs absorbed in providing concierge services (to start, $10k) Resources Evaluate how well resource components are satisfied. AvailableScalable AttainableSustainable 1.Client Service Associate 2.Office Manager 3.Database Concierge client services

List and Documents Services Resources Evaluate how well resource components are satisfied.  JB&J is resource constrained to grow and sustain.  4 Partners (serving ~ 250 relationships) are working in Silo’s and offering six distinct services – only supported by 3 CSA’s and 2 CPA’s. Thus, each person (Partner, CSA, and CPA) feels ‘overworked/very busy’, but the business is slowly dying because it is not growing. This creates a poor work environment.  Each CSA is serving ~ 83 relationships  Each CPA is serving ~ 125 relationships  Human Capital investment is necessary to establish career paths and transition ‘daily grind service delivery’ workload away from the Partners (and future Advisors) so that there can be a focus on organic growth (i.e referral network, new revenue opportunities, COI’s, etc,)  Investment has started on a C-level with hiring a professional CEO, but efforts have been focused on Operations; not growth. AvailableScalable AttainableSustainable

Initiatives and Notes Initiatives for Improvement 1.These Initiatives for Improvement are driven from our Strategy Initiatives (see Slide 8). 2.These Initiatives may be refined as Strategy Initiatives #3 and #5 are formalized. 3.Given the technology investment that is required, Employees will be ‘stretched’ and required to first standardize workflow processes to ensure that we have a high utilization %. 4.These Initiatives should help the Partners shift some duties to staff enabling them to have capacity to seek new referral business and develop/strengthen COI’s. Write down and agree on Operations initiatives in your firm and elect a “champion” for each initiative. Notes Improvement OpportunityWho Will Complete 1. Process and workflow standardizationBeth 2. CRMBeth 3. SegmentationRachel 4. Roles and ResponsibilitiesBeth 5. Portfolio Management SystemAlice Handouts in the Appendix Six Tell-Tale Signs That Your Business Processes May Need Attention

Financial Management Making the Numbers Work MODULE FIVE

Financial Management Use the Financial Worksheet* to calculate the following metrics: Gross Profit Margin 4,559,185 (95%) 4,731,068 (91%) Earnings before Owners' Compensation % 82%78% Operating Profit Margin 3,961,185 4,043,068 Pre-Tax Income per Owner 990,2961,010,767 Active Clients per Professional Active Clients per Staff (total headcount) Revenue per Professional 686,169739,724 Revenue per Staff (total headcount) 343,085345,205 AUM per Professional 8,367,9188,702,635 AUM per Staff (total headcount) 41,839,57140,612,296 Revenue per Active Client 26,68429,931 AUM per Active Client 3,254,1903,521,297 Direct Expense per Client 1,3562,584 Overhead per Client 3,3223,977 Operating Profit per Active Client 22,007 23,370 *The Financial Worksheet is a separate Excel file.

Initiatives and Notes Initiatives for Improvement 1.These Initiatives for Improvement are driven from our Strategy Initiatives (see Slide 8). 2.These Initiatives may be refined as Strategy Initiatives #2 and #4 are formalized. 3.Benchmarking our Firm to both peers and High Performing Firms will help us to transition from a Silo business to an Enterprise (an Ensemble practice) 4.Keys to driving the valuation of our Firm includes, Driving new growth (currently non-existent) including establishing a referral base Establishing Client-centric Teams within our Firm that leverage technology used at a high utilization %. Developing career paths and a succession plan so we can not only retain Human Capital, but also attract strong talent. Write down and agree on Financial initiatives in your firm and elect a “champion” for each initiative. Notes Improvement OpportunityWho Will Complete 1. Partner compensationDavid 2. New equity partners/successionJohn 3. Investment in technology, marketing and staff Beth 4. Benchmark vs Ensemble firmsTico 5. Realign compensation based upon position and set metrics Alice Handouts in the Appendix Key Drivers of Firm Valuation