1. ©UFS Investor Pulse Andrew Carlisle FPFS AIFP Chartered Financial Planner 1 February 2014

2. Agenda Black Rock Investor Pulse Survey 2013 and Investor Confidence Capacity For Loss 2

3. BlackRock Investor Pulse study 2013- UK findings – investors and advisers Summary For professional clients / qualified investors only

4. Journey to a better financial future Questionnaire framework – End Investors 4 1. Life goals & financial concerns 2. Planning and advice 3. Savings & investments 4. Longevity & retirement Confidence about their financial future Financial priorities- importance/ preparedness Concerns about financial future Approach and attitude to investing Time spent research/ planning finances vs. other things e.g. holiday/ car purchase, etc Frequency of planning finances Reasons for why people start to plan their long- term finances Sources used for financial advice Relationship with professional financial adviser, if applicable rations Attitudes to saving & investing Savings/Investment patterns – amounts, reasons, how to encourage people to invest more Types of savings and investments - asset allocation, drivers behind decisions, selection criteria ‘Income-generating investments’ – terminology, vehicles used, general attitudes Expectations for retirement Sources for retirement income Income needed / realistically expected to have Attitudes towards preparing and saving for retirement With hindsight, what would have done differently Bottom up approach to questionnaire development, identifying the right questions for each region before identifying common global themes / questions

5. Key Themes – Overall UK population 5 1 2 3 4 5 Household planning is focused on short-term spending decisions; taking professional financial advice is a minority pursuit. ‘Cash is king’ in the UK more than in most countries. Investors remain in a holding pattern reflecting a generally risk averse attitude. ‘A comfortable retirement’ is the main financial priority, but UK workers are amongst the least prepared for retirement Half of British adults feel negative about their financial future. ‘Concerned’ best describes sentiment, reflecting the global mood. The journey towards a more comfortable financial future is based on saving earlier, saving as much as you can and thinking long-term.

6. Financial concerns do vary by country 6 TotalUSACanadaUKGermany Nether- lands Switzer- land ItalyFranceBelgium Hong Kong TaiwanAustralia Having to spend more than I earn 31% 29%33%31%36%27%26%34%17%30%37%33%29% State of the domestic economy 30% 31%19%44%17%42%17%50%41%26%14%6%33% Healthcare costs 29% 45%27%9%25%46% 16%22%30% 23%27% Job security 28% 25%26%27%22%34% 43%27% 21%29%30% Tax increases/ tax policies 26% 23%27%20%19%32%24%41%49%35%5%11%21% State of the global economy 20% 18%20%14%19%14%19%17% 41%35%19% Changes to government pension / social security 18% 29%21%15%8%24%25%10%13%14%5%27%21% Oil and energy prices 18% 14%15%24%35%7%10%11%22%28%2%14%20% Housing/ real estate / Housing costs 17% 11%17%20%27%12%19%16%17%19%16%12%22% Changes in inflation 17% 16%18%19%18%5%7% 9%8%44%48%15% Living longer 10% 13%14%11%6%4%8%7%10%7%12%10% Volatility of stock markets 9% 11% 8%5%1%8%9%6%4%27%13%8% Changes in interest rates 9% 5%12%19%8%6%10%5%4%8%10%8%17% State of the European economy 9% 2% 9%16%17%14% 15%17%7%2%3% Lack of planning for my finances 8% 12%13%9%3%6%8%5% 4%10% Closure of final salary pension 7% 3%4%6%15%5%10%9%14%10%5%8%3% Top three concerns

7. The biggest differences are generally between Mass Affluent and Mass Retail, and those using advisors and those who do not (UK) TotalMass Affluent Mass Retail MenWomenAge 25-34 Age 35-44 Age 45-54 Age 55-64 Age 65-74 Use Advisor Do not use adviser I take financial planning seriously 61%85%56%61%60% 58% 65%64%81%57% I am not willing to take any risks with my money 57%47%59%50%64%53%50%57%62%65%54%58% I am comfortable making my own investment decisions 48%71%44%55%42%39%44%49%52%57%48% I regularly monitor the performance of my savings and investment products 45%82%39%49%42%41%40% 51%58%68%42% I am interested in knowing more about savings and investments 42%68%37%43%40%56%47%32%37% 55%39% I consider the effects of inflation when making decisions about my savings and investments 40%66%36%44%36%38%39% 41%47%62%37% Most of my savings and investments are for the long- term 40%70%34%42%37%40%35%39%41%43%64%36% I am knowledgeable about saving and investing 38%70%32%42%34% 35%37%39%46%53%35% I always choose investments with the lowest cost and fees 29%41%27%29% 37%28%27%21%31%36%28% I often take professional financial advice regarding savings and investments 24%35%22%25%23%28%21%24%22%25%74%16% I am comfortable investing in the stock market 22%50%17%28%16%21%24%21%20%23%40%19% I am willing to take on higher risks to achieve higher returns 19%35%16%24%14%25%23%19%14% 30%17% 7

8. In the UK Mass Affluent use a wider range sources for long-term financial planning than Mass Retail 8

9. There is no single measure that would encourage those not using a professional financial adviser to do so 9

10. Guarantees and ‘no lose’ investments are key for many people. 10 UK

11. Risk, fees and ease of access are key investment selection criteria 11 UK

12. FSA Guidance Consultation Assessing Suitability ‘We do not prescribe how firms establish the risk a customer is willing and able to take or how they make investment selections. We have seen an increasing trend of firms adopting risk- profiling and asset-allocation tools to support, supplement or replace aspects of more traditional ‘know your customer’ approaches. Our review highlights the risks and weaknesses of different approaches whether or not firms use tools.’ FSA - January 2011

13. FCA Guidance Assessing ATR – The Five Pillars Risk Profiling(Assessment) *1 Risk descriptions(Description) *2 Other Factors i.e. Term / CFL(Discussion) Asset Allocation Investment Selection *1 Tool is the guide not the answer *2 Must - Quantify Risk > Use consistently > Be Objective > Define Category > Avoid Jargon > Be balanced

14. FCA Guidance Assessing ATR/CFL Assess clients Attitude to Risk Document and record it Assess clients Capacity for Loss Ensure client understands the potential for losses and their impact Recommend suitable investments that meet ATR and CFL

15. The Art Of Conversation

16. 16 I pointed out that a ‘risk profile’ Is the MAXIMUM amount of risk you’re prepared to take, not the risk you SHOULD take.

18. Appendix – Survey Summary

19. Key Findings (1) – Financial concerns/ risks/ market outlook/ priorities Many Brits uncertain about their financial future but mass affluents much more positive  47% of UK adults feel positive about their financial futures, but sentiment is deeply divided with 48% feeling negative; 18% are "concerned" and 10% "nervous". Only 14% feel "hopeful" and 10% feel "optimistic".  49% in control of their financial future and 50% are confident they’re making the right decisions about their savings & invts  Mass affluents: Overall 72% are positive with 29% saying they are comfortable. Also 74% feel in control of their financial future and 78% are confident they are making the right savings and investment decisions Many financial priorities to juggle, with retirement being the most important priority  "Funding a comfortable retirement" is a priority for 39%. Only 62% are confident that they will achieve this.  Debt is also a major priority with for 26% who chose "paying off the mortgage on my main home" and 30%who chose "paying off other debts". Growing (25%) and preserving wealth (23%) were also identified with around two-thirds confident that they could achieve these goals.  Mass affluents: Top financial priority is also retirement (69%), followed by preserving my wealth (55%), growing my wealth (43%) and being able to draw an income from my investments (43%). Relatively high level of confidence in achieving those priorities. The state of the UK economy, the top concern on people’s minds  The state of the UK economy was seen as major threat to peoples' financial future according to 44%. Squeezed household incomes were also a threat with 31% concerned about "having to spend more than I earn".  In a country with a high level of mortgage holders, 20% said housing costs and 19% said changes in interest rates. Globally, Britons are the least concerned about healthcare costs (9%).  Mass affluents: Top 3 concerns on their minds are the state of the UK economy (44%), changes in interest rates (32%) and changes in inflation (28%) Most Brits adopting a cautious approach to investing  Britons are particularly risk-averse with 57% saying that they are not willing to take any risks with their money, compared to 51% globally. Also only 28% are willing to take on higher risks to achieve higher returns.  Most investors are in a holding patter, not planning to make any major changes to their portfolio in the next 12 months  Mass affluents: Also high level of risk aversion with 48% not willing to take any risks with their money and only 35% willing to take on higher risks to achieve higher returns. Also in a holding pattern overall. 19

20. Key Findings (2) – Financial planning and advice Many people take an interest in financial matters and want to know more  61% of Britons claim to take their financial planning seriously with 45% who regularly monitor the performance of their savings and investments.  38% agree that they are knowledgeable about their savings and investments and 42% say that they are interested in knowing more about savings and investments – so a clear opportunity for investor education  Mass affluents: an even greater interest in financial matters with 85% taking financial planning seriously and 82% regularly monitoring the performance of their savings and investments. Also a strong desire to learn more with 68%. Although reviewing savings and investments and retirements plans is not something the majority of people spend most time on and the fact that planning is often conducted informally  Planning priorities reveal a strong consumer mindset in the UK, where adults spend more time planning for the holiday (39%) than any other planning goal. While 27% said they spent most time reviewing purchases of their smart phone or tablet, only 13% said the same about planning for retirement.  Financial planning is usually conducted informally with 53% saying that a review was based on their own thoughts and ideas, with 28% saying they spoke to friends and family.  "Reaching a certain age" is seen as the main reason (34%) why people start to undertake financial planning. A further 19% chose "realisation that retirement is approaching" which demonstrates the importance of life stages and events. Reflecting the levels of household debt, paying off the mortgage or other debts was chosen as a prompt to save by 24%.  Mass affluents: They spend most of their time on long-term financial planning, with 59% spending the most time on reviewing their savings and investments, followed by planning a holiday (39%) and researching a car purchase (25%). In terms of the way they plan or review their long-term finances, they use their own thoughts and ideas (63%), look at personal finance papers / mags (47%), look on financial planning websites (39%) and use the services of a professional adviser (32%) Getting financial advice still the preserve of a small minority, however an important factor in people feeling confident about their financial future  Getting financial advice still the preserve of a small minority, with 19% using the services of a financial adviser. This figure increases to 32% for mass affluents  People who have an adviser seem to be more positive (58% against 46%) and more in control (63% against 47%) 20

21. Key Findings (2) – Financial planning and advice - continued People who use a professional adviser are satisfied overall with the level of service they are getting  UK advised clients are the most likely globally to see their adviser as being helpful. Very high levels of satisfaction across all measured criteria: value for money, overall financial plan, ability of adviser to select the right investment products, and quality and frequency of contact. For example, 94% were satisfied overall with the value for money provided by their adviser.  Conversations with advisers are centered around a number of key topics: 41% -developing a retirement plan, 40% - seeking out the best returns in the market place, 34% - protecting savings and investments against inflation, 30% minimising risk when investing, 26% - developing a comprehensive financial plan for all assets  Mass affluents: conversations with advisers focusing on seeking the best returns in the market place (58%), developing my retirement plan (49%), protecting savings and investment against inflation (41%), developing a comprehensive financial plan (37%) and minimising risk when investing (35%) 21

22. Key Findings (3) – Savings and investments, and income generation Cash is the preferred safe haven for risk averse savers  31% are concerned about "having to spend more than I earn“ as 48% of incomes go on paying utility bills, housing costs and paying off debts. 26% would use any additional income to pay off debt.  Britons are particularly risk-averse; 57% are not willing to take any risks with their money, compared to 51% globally.  Cash remains king; 68% of all UK household savings and investments are held in cash compared to 13% held in equities. Savers are not looking to invest their cash but guaranteed returns on investments might encourage 38% to do so; 19% thought that having less debt might encourage them to switch.  Mass affluents: 42% of their assets are in cash, compared to 25% in equities, 12% in bonds and 16% in property. It is interesting to note that 42% said cash deposits were the best way to avoid investment losses, 31% held cash for investment growth, 30% to generate a regular income and 11% to protect against inflation. It is also worth noting that 42% of mass affluents intend to retain the same proportion of their assets in cash, 35% intend to increase it and 21% intend to decrease it. Bond investors still invested heavily in government bonds  In the UK, 31% of bond investors invest in government bonds. Also, when asked whether they believe that they will get the same returns from investing in traditional bonds in the future than in the past, 25% said yes and 36% don’t know.  Mass affluents: 25% hold government bonds, 21% bonds investing across a range of sectors and geographies, 20% in bonds tracking a particular index and 34% in corporate bonds. Interestingly, 18% believe that they will get the same returns from investing in traditional bonds in the future than in the past and 42% don’t know. Investors know they want income but don’t know how to get it  40% agree that earning an income is important, however only 1-in-6 earn or draw an income off their investments. Also only 19% feel knowledgeable about today's best options for income generating investments. This is lowest proportion of all the countries. surveyed. 49% said that "earning extra income during my retirement" was one of the main reasons for investing in income-generating investments.  Mass affluents: 69% say that earning an income is important against 45% claiming to draw or earn an income from their investments. 46% said that investing in dividend-paying equities helped them to generate an income on their investments. 29% said the same about investing in property and 30% said it about putting money in savings accounts. Also only 38% say that they are knowledgeable about today’s best income generating investments and 50% say that income generating investment are much riskier than they were five years ago.. 22

23. Key findings (4) – Retirement and longevity People aspire to an active lifestyle in retirement, however may people are not saving specifically for retirement  Active retirement is the aspiration; when asked about they expect to achieve in retirement, 39% chose holidays and travel; 30% taking frequent exercise; 30% continuing paid work and 23% doing charity / voluntary work.  However, about 53% of Brits have not started to save about retirement and two-thirds of 25-34 year olds and half of 45- 54 year olds are not saving for retirement.  Mass affluents: similar trend, when asked about their goals in retirement, 60% say frequent holidays, 45% taking frequent exercise, 32% doing some paid work and 34% doing some voluntary / charity work. They seem to be overall much more prepared for retirement than the overall population, with 74% having started to save for retirement A widespread concern about being able to meet the key retirement needs  The need to save: only 37% understand how much they need to save  Managing investment risk: only 27% are confident that their retirement plan can cope with the ups and downs in the financial markets  Choosing a retirement date: 33% shall delay retirement until they have saved enough and 29% will never retire  Securing an income: The required retirement income is £27,000; only 4-in-10 confident of achieving that. And 42% have lowered the type of lifestyle they shall have in retirement  Longevity: 41% are concerned that they will outlive their savings  Mass affluents: Even if better prepared, there are still some concerns around retirement. 35% are concerned they will outlive their savings; 36% have lowered the type of lifestyle they will have in retirement; 49% say that attaining a financially secure retirement is less attainable than five years ago; What can we learn from the current generation of retirees?  UK retirees have a range of advice to offer to younger generations of savers. Key actions: Start saving as early as possible (73%) and save as much as you can (65%) Pay off your debts (61%) Think long-term (57%) Regularly review your savings and investments (54%) 23

24. Important Information This presentation has been provided to recipients for information only and has not been approved as a financial promotion. Notwithstanding the foregoing, this presentation is only being provided to professional financial advisers. This presentation does not constitute an offer or inducement to purchase or subscribe for securities in a product or fund. The information in this presentation may not be complete and may be changed, modified or amended at any time and is not intended to, and does not, constitute any representations and warranties of MetLife Europe Limited. The information contained in this presentation is intended to provide general information only and does not take into account individual objectives, financial situation or needs. All reasonable care has been taken in relation to the preparation and collation of this presentation. Except for statutory liability which may not be excluded, no member of MetLife accepts responsibility for any loss or damage resulting from the use of or reliance on this presentation by any person. The information is taken from sources which are believed to be accurate but no member of MetLife accepts any liability of any kind to any person who relies on the information contained in it. The copyright of this presentation and any documents supplied with it and the information contained therein is vested in MetLife. They should not be copied, reproduced or redistributed without prior consent. MetLife Europe Limited (trading as MetLife) is authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Services Authority. Details about the extent of our regulation by the Financial Services Authority are available from us on request. Registered address: 20 on Hatch, Lower Hatch Street, Dublin 2, Ireland. Registration number 415123. UK branch address: One Canada Square, Canary Wharf, London E14 5AA. Branch registration number BR008866. Web Site: http://www.metlife.co.ukhttp://www.metlife.co.uk