SunGard Advisor Technologies Unified Overlay Management Program With Outsourced Overlay Management

Unified Overlay Management Introduction Why Overlay Management Manager Due Diligence Process SunGard Overlay Solution Program Benefits

Introduction

At the Forefront of the Managed Account Industry Unified Overlay accounts are truly the next generation of asset management. As institutions have expanded their businesses to include fee-based investment services, traditional Separately Managed Accounts are evolving to what we call Overlay managed accounts – the integration of multiple money managers into a single account.

The SunGard Overlay Solution About SunGard Advisor Technologies (SAT) –Wholly owned subsidiary of SunGard Data Systems since June 2003 (London Pacific Advisors) –Original company established in 1983 –Asset consulting services since 1990 –Provider of managed account programs to banks, RIAs, and broker/dealers SunGard provides you with access to comprehensive fee- based investment solutions

Why Overlay Management?

The Demand for Overlay Increased industry pressure to deliver best-of-breed managers Clients demand more customized and tax-efficient investment solutions Increased focus on straight-through processing and integration with current trust accounting systems and custodial services Overall requirement to keep pace with competitors Added focus on fee compression

Traditional Separate Account Management Each Separate Account Manager makes investment decisions solely on the assigned investment amount There is no trading or tax coordination between managers Access to managers is limited by account minimums Tax efficiency is limited to the sub- account level Rebalancing, contributions, and withdrawals are challenging to implement operationally Platform costs are higher due to more expensive infrastructure needed to support platform Account A Account C Client Advisor Manager A Manager B Manager C Account B

Sleeve-Based Overlay Management Benefits –Access to best-of-breed managers –Ability to personalize portfolios –Ability to police tax, trading and concentration issues Drawbacks –Minimum size requirements –Infrastructure costs –Limitations on degree of portfolio management  Unintended concentrations - risk  Unnecessary trading costs  Inefficient tax management Account A Account C Manager A Manager B Manager C Account B Overlay Manager Client Advisor

Sleeve-Based Overlay Unified Overlay vs. Unified Overlay Account Client Advisor Model Portfolio A Model Portfolio B Model Portfolio C Overlay Manager Account A Account C Manager A Manager B Manager C Account B Overlay Manager Client Advisor

Unified Overlay Managed Accounts Overlay Manager is responsible for constructing a single portfolio based on the models provided by each of the managers One set of new account paperwork for one account Portfolio decisions are customized for each investor Consideration towards taxes is made prior to executing trades Overlay Manager controls active risk to the composite target Rebalancing, contributions, and withdrawals are more efficiently implemented by the Overlay Manager Lower investment minimums Lower operational and implementation costs Unified Overlay Account Client Advisor Model Portfolio A Model Portfolio B Model Portfolio C Overlay Manager

The Role of the Overlay Manager Customize portfolio decisions for each investor Optimize portfolio performance Manage security restrictions and social constraints Coordinate tax lot management – Evaluate the trade off of tax cost/benefit versus changes in the portfolio’s risk profile, compared to the target Implement account-specific decisions – Coordinated trading – Active tax management – Portfolio transitions – Cash and asset flows, rebalancing – Risk control

SAT’s Due Diligence Process

Manager Due Diligence SAT performs institutional-quality research on the managers SAT’s 16-member Investment Research Group has an average of eight years of experience SAT has successfully used a sophisticated four-step screening process for more than 10 years to obtain and analyze vital information, including specific data which managers are reluctant to disclose SAT understands that managers may not be what they seem Managers that pass SAT’s due diligence process are invited to participate in the program SAT contracts with the managers and negotiates fees Over 50% of our senior professionals have advanced degrees and professional certifications, including CFA ® and CIMA SAT has developed one of the most comprehensive due diligence processes in the industry

Due Diligence Process Identify Manager Universes Comprehensive Analysis Due Diligence Committee Managers on Approved List Multiple databases to identify quality managers Screening with 14 measurement tools 38-page questionnaire with more than 400 data points Meets weekly to review new and updated information Approves all additions and deletions to Approved List Exception Reporting, performance and portfolio analytics, and quantitative Research

Integrated Team Approach Qualitative Analysis Team (8) Team Functions: Qualitative reviews of all products Site Visits Research updates, memos on organizational changes, staff, strategy, other issues Preparation of MF, ETF, MSP, & No DD profiles Asset Allocation oversight and reviews Institutional Services Team (2) Quantitative Analysis Team (6) Risk Management and Institutional Research Team (3). Investment Research Group Team Functions: SAM Contracts Fee negotiations Custodian Contracts Client approved lists Operational setup Asset Class review calls with clients Quarterly load coordination Team Functions: Team Functions: Preliminary product screening Quantitative reviews of all products Research updates, memos of performance, holdings/style, or risk related issues Data entry, collection Preparation of SAM profiles Preparation of Quarterly Reviews Team Functions: Ongoing monitoring of all products Monthly performance update and asset reports Quarterly search of news services Maintain watch list Audit, proof, edit & QC research work Institutional Research for major accounts

SunGard Unified Overlay Solution

Turnkey Outsourced Solution Designed for firms that are interested in a turnkey unified overlay management solution – Cutting-edge program that will put your firm at the forefront of the industry – Provides access to third-party manager models as a method of extending your current investment management capabilities – Quick program start-up and implementation – Seamless integration with your current operational activities

Available Overlay Portfolios Aggressive Equity Maximum Appreciation Long Term GrowthBalanced Portfolio Objectives Implement a single portfolio solution using a full array of asset classes Core Completion Objectives Add value to a client’s existing portfolio with larger capitalization equity asset classes Satellite Completion Objectives Enhance a client’s existing core portfolio with smaller capitalization equity asset classes

Sample Objectives Portfolio Objective - Maximum Appreciation Domestic Equity Large Cap Domestic Equity Mid Cap Growth Domestic Equity Mid Cap Value Domestic Equity Small Cap Blend International Equity Cash Equivalents Satellite Completion Objective - Maximum Appreciation Domestic Equity Mid Cap Growth Domestic Equity Mid Cap Value Domestic Equity Small Cap Blend International Equity Cash Equivalents

New Business Development We help you market the Overlay program with professional, quality presentation and informational tools Presentations Brochures Inserts Investment Profiles – Portfolio Objective – Money Manager Profiling Questionnaire Training

How We Work Together Financial Institution Manage customer relationships Capture risk profiling information Select portfolio objective Open account Provide performance reports SunGard Conduct manager due diligence Negotiate manager fees Determine asset allocation Manager selection Portfolio management and trade execution Portfolio rebalancing Program liaison and operational support Marketing and presentation tools

Benefits of SunGard’s Unified Overlay Management Program

Important Distinctions Manage risk with greater diversification at lower investment amounts Control what is owned by applying personal restrictions Lower cost of entry by consolidating investments into one account Gain access to highly-specialized investment managers Easy way to add value to current and new customer relationships Simplified business processes - multiple client investment products into one account Customers Advisors Financial Institutions Free up more resources for building assets by outsourcing the overlay management function Access to competitive advantage needed to compete in this ever-changing environment © 2004 SunGard. All rights reserved.