Financial Leadership in Uncertain Times Restore Confidence, Regain Trust, Rebuild Wealth

Agenda for Today The Need for Leadership Financial Leadership Framework –Restore Confidence –Regain Trust –Rebuild Wealth The Road to Recovery

The Need for Leadership Reduction in wealth/loss of confidence Uncertainty around jobs/retirement angst Money Markets or mattresses Financial Leadership

“…global recession is about to produce blood in the streets ‘civil wars’ and toppled governments.” - Niall Ferguson “We are in the worst financial crisis since the Great Depression.” - President Barack Obama “This is an economic Pearl Harbor.” - Warren Buffett Financial Leadership

Emotional Impacts Financial Leadership

Equity Fund Investor vs. S&P % % % % % 0.00% 10.00% 20.00% 1.87%8.35% 20 Years % % 2008 Equity fund investor S&P 500 Financial Leadership

Lack of Leadership = Do It Yourself Investing Loss of confidence in traditional “brokers” % increase in number of discount brokerage accounts opened Lower fees make active trading more affordable – exactly what should NOT be happening Financial Leadership

Motivation A Framework for Leadership Adopted from Ambrose 1987 SUCCESS + Implementation Expertise Vision + + = Financial Leadership

Successful Financial Leadership RESTORE Confidence REGAIN Trust REBUILD Wealth Motivation Vision Expertise Implementation Financial Leadership

Restoring Confidence Restore Confidence

3 Areas to Focus On Our confidence Confidence of the public/investors in equities and investments Motivation of your clients to move forward with you towards a positive vision of the future Restore Confidence

Advisor Confidence Index Source: Rydex Advisor Benchmarking Restore Confidence February 2007 emergence of the subprime issue

Restore Confidence Source: Rydex Advisor Benchmarking Advisor Confidence Index September 2008 US Fed began to cut federal funds rate

Restore Confidence Source: Rydex Advisor Benchmarking Advisor Confidence Index March 2008 Dow Jones hit lowest point since October 2006

Restore Confidence Source: Rydex Advisor Benchmarking Advisor Confidence Index October 2008 Emergency Economic Stabilization Act, creation of $700 billion Troubled Assets Relief Program 79.07

Restore Confidence Source: Rydex Advisor Benchmarking Advisor Confidence Index January 2009 small increase, possibly due to election

Advisor Confidence Index Restore Confidence Source: Rydex Advisor Benchmarking April 2009 highest level since Sept

Advisor Confidence Index Restore Confidence Source: Rydex Advisor Benchmarking Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09

Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Investor Confidence Restore Confidence Source: State Street

Staying the course in challenging markets Restore Confidence

Growth of the S&P 500 Composite $C, August 1979 to February 2009 Restore Confidence

% Gain Index 11.1% S&P 500 Composite Total Return Idx ($ Cdn) 10.0% MSCI World ($ Cdn) 9.7% S&P/TSX Total Return 30 Year Comparison of Major Indices Restore Confidence

Index S&P 500 Composite Total Return Idx ($ Cdn) MSCI World ($ Cdn) S&P/TSX Total Return Restore Confidence 30 Year Comparison of Major Indices

Major Indices Index S&P 500 Composite Total Return Idx ($ Cdn) MSCI World ($ Cdn) S&P/TSX Total Return Dec-01 Dec-00 Dec-02 Dec-07 Dec-06 Dec-08 Restore Confidence

U.S. equities – rolling 10-year compound total returns (1895-current) Restore Confidence Past ten years – worst since 30’s Source: UBS, Tetrem Capital Management

Restore Confidence Source: Factset Investor Pessimism is Contrary to Market Performance 14.61% annualized return on the S&P 500 over the next three years 13.95% annualized return on the S&P 500 over the next three years % annualized return on the S&P 500 over the next three years 0.36% annualized return on the S&P 500 over the next three years ???

Advisor Confidence New solutions – TFSA, GMWB Fewer competitive firms You do more than equities Restore Confidence

Successful Financial Leadership RESTORE Confidence REGAIN Trust REBUILD Wealth Motivation Vision Expertise Implementation Financial Leadership

Source: TrustedAdvisor Associates 2008 Broken Trust Regain Trust

Reasons for Failed Sales Source: Heiman Miller, Conceptual Selling Other No budget No urgency No desire to change No need No Trust Regain Trust

The Territory of a Trusted Advisor Source: The Trusted Advisor, by David H. Maister, Charles H. Green, Robert M. Galford Earning Trust Building Relationships Giving Advice Effectively Regain Trust

The Trust Equation Trust = C + R + I S Trust = Credibility + Reliability + Intimacy Self-Orientation Source: TrustedAdvisor Associates 2007 Regain Trust

Trust Realms Credibility Reliability Intimacy Self-orientation Realm Example Words Actions Emotions Motives I can trust what he says about… I can trust her to… I feel comfortable discussing this… I can trust that he cares about… Component Source: The Trusted Advisor, by David H. Maister, Charles H. Green, Robert M. Galford Regain Trust

CRI S Trust = (worthiness) Source: TrustedAdvisor Associates 2007 Regain Trust

Ideas to Increase Credibility CRI S Trust = (worthiness) Source: TrustedAdvisor Associates 2007 Regain Trust

Ideas to Increase Reliability CR Trust = (worthiness) S I Source: TrustedAdvisor Associates 2007 Regain Trust

Ideas to Increase Intimacy CI Trust = (worthiness) S R Source: TrustedAdvisor Associates 2007 Regain Trust

Ideas to Decrease Self-Orientation C S Trust = (worthiness) RI Source: TrustedAdvisor Associates 2007 Regain Trust

"No one cares how much you know, until they know how much you care" Regain Trust

BRAND Overview Presentation Regain Trust

Successful Financial Leadership RESTORE Confidence REGAIN Trust REBUILD Wealth Motivation Vision Expertise Implementation Financial Leadership

Rebuild Wealth

Process not an Event Rebuild Wealth

Emotional Maturity Rebuild Wealth

Do you have a wealth rebuilding strategy? Rebuild Wealth

Wealth Rebuilding Strategy Step four: Provide written recommendations and alternative solutions Step one: Clarify the client’s present situation Step six: Provide periodic review and revision Step two: Identify both financial and personal goals and objectives Step three: Identify financial problems Step five: Implement the right strategy Worry-free Wealth Management

Motivation A Framework for Leadership Adopted from Ambrose 1987 SUCCESS + Implementation Expertise Vision + + = Financial Leadership

RESTORE Confidence REGAIN Trust REBUILD Wealth Motivation Vision Expertise Implementation Financial Leadership Successful Financial Leadership

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