SESSION TWO WORKBOOK WealthTouch Decisions and Notes for Modules 1 – 5 BSMARTer Business Simulation Management and Relationship Training

Organizational Structure and Compensation MODULE 1

Service Team Structure 1 Example diagram of service team structure. Client Lead Advisor Jr Advisor CSA

Service Team Structure 2 Draw a picture of your service team structure.

Service Team Structure 3 We went with a client centric model vs productivity centric model because of our client base. (expand on later) Reason for our structure: The client coverage model is structured so that there are 2 advisors assigned to each client relationship; a lead advisor, a more senior associate who is ultimately responsible for relationship and will typically handle the more complex financial planning topics. (estate planning, investment management tax planning). The junior advisor will be involved in these conversations/meetings and will take an active role in the execution and planning of these decisions. All operational items will be owned by the CSA/ops and will be responsible for the execution of all transaction processing requests from the lead and junior advisors. In addition to the lead and junior advisor there will be a portfolio manager and tax analyst brought into the relationship if additional subject matter expertise is needed to manage the highly complex client portfolios and needs. The benefits of this model provide our clients a clear understanding of accountability, coverage, and transperency into WealthTouch’s client centric philosphy and how dedicated we are to serving our client needs. The firm benefits the client is a client of the firm, not an advisor. (protection) The employees benefit; career path & responsibility/accountability is outlined Provide an explanation of your service team structure.

Compensation Benchmarking 4 Determine base compensation for three employees in your briefing book. Complete the task using the next two pages. PositionSalaryBonusTotal Your Lowest-Paid Employee $70,175$9,579$80,000 Your Highest-Paid Employee $122,807$17,193$140,000 Mid-range$97,117$13,597$110,174 Benchmark Median $110,000$18,000$128, 000 Benchmark Third Quartile $133,143$36,850$169,993 See Appendix A for position compensation information Source: 2013 InvestmentNews/Moss Adams Comp Study

Compensation Benchmarking 5 We will be addressing the fact we are below the median for compensation Clarify lead advisor vs. advisor salaries i.e. salary range for each role/can be overlap, but we recognize there is inconsistency. What changes, if any, will you make to compensation?

Staff Selection and Performance Management MODULE 2

Job Advertisement 6 Don’t need to complete Design a job ad for the position specified in your briefing. (20 minutes)

Performance Evaluation 7 Design a performance evaluation form. Follow the worksheet. (20 minutes) Job FactorExplanation 1. Existing Flows 2. New Client Development 3. Client Retention 4. Client Satisfaction 5. Industry/development 6. Discretionary Describe how the forum will be used. Explanation of how to score; i.e. advisors we are going to evaluate productivy, number of clients they service, number of AUM, client sat surveys etc Notes

The Culture of Your Firm MODULE 3

Organizational Culture 8 What would you do to create the kind of culture you want to have? i.e. what influences culture, leaders, values, communication, lot of training is giving. Describe the culture of your firm. What changes would you make? How?

Incentive Compensation MODULE 4

Partner Compensation 9 New business: 20% of the fees in the first year 10% of the fees in the second year 5% of the fees in the third year Make sure to look at briefing book on who’s incentive plan your designing. Design Advisor Bonus Plan

Partner Compensation MODULE 5

Partner Compensation 10 Currently, at Wealth Touch, partners don’t receive a salary. All compensation is a distribution of profits after the preferred dividend to Cohesive Capital. We are transitioning to a compensation structure which includes a base salary component for partners in order to create a distinction between compensation/salary for work and compensation/dividends for ownership and investment in the firm. This new structure will enable us to facilitate future changes (i.e. Paula wants to retire, Wendy to become a partner). With bonuses tied to growth, this reinforces the business development culture and creates a clear path/transparency on career paths. Price Fisher, Fund Partner Cohesive Capital: $600k Paula Simon, CEO & Head of Tax: $250k Art Garfunk, President: $250k Carry Phillips, Managing Director of Alternative Investments: $125k Wendle Wilson, Managing Director of Wealth Management: $125k Chuck Phillips, CIO: $125k Set the base compensation for your partners.

Partner Incentive Compensation 11 Create, discuss and define incentive compensation for partners.

Other Initiatives 12 Describe any other initiatives you will undertake as a firm. These may be outside of the scope of compensation and people but may be important parts of your case. Notes InitiativeExplanation