1. Business, Owner & Executive Solutions Overview Presenter Name Title Date

2. For financial professional use only. Not for distribution to the public. Small Business Means BIG Business More than 28 million small businesses (2014). 1 99.7% of U.S. firms have fewer than 500 employees. 2 29% of family business participants have not completed any planning other than writing a will – and 63% of family business owners do not have an exit plan. 3 38% of family businesses think that succession planning will pose a substantial challenge in five years’ time. 4 Over the next 30 years, nearly $16 trillion of net worth will be transferred of which $6 trillion will be transferred by privately held businesses. 5 For more than 60 years, The Principal has focused on serving the needs, challenges and opportunities faced by businesses, owners and executives. 1 SBA, Office of Advocacy, 2014 2 Statistics of U.S. Businesses, U.S. Census Bureau, 2014 3 Principal Financial Group, Business Owner Research, January 2015 4 PWC Family Business Survey, 2012/2013 5 Wealth-X and National Financial Partners, Published in Think Advisor, January 13,2015

3. For financial professional use only. Not for distribution to the public. Succession Planning –41% of respondents intend to pass on both the ownership and management of their business to the next generation but more than half of them were unaware whether their children had either the skills or enthusiasm to do this successfully. Only 12% of family firms make it to a third generation. 1 –59% of business owners do not have a written plan to continue the business in event of their death, disability, or retirement. 2 Business Protection –66% indicate their company does not have any plan in place to protect their business in case of death or disability. 2 1 PwC Family Business Survey October 2012 2 Principal Financial Group, Business Owner Research, January 2015 Family Business Market Facts

4. For financial professional use only. Not for distribution to the public. Needs for Business, Owners and Executives Retirement funds – Do I have enough? Healthcare – How will I pay for it when I retire? Survivor needs –What if I die too soon? Will I have financial security in today’s economy? Specific business owner issues: –When can I exit my business? –Will my kids be able to take over? –Will it sell for what it’s worth? –How can I avoid huge taxes? –Can it survive without me?

5. For financial professional use only. Not for distribution to the public. The Challenge Business owners are top clients Business solutions may not be your specialty How can you provide the resources and solutions without totally disrupting your current business?

6. For financial professional use only. Not for distribution to the public. Business, Owner & Executive Solutions

7. For financial professional use only. Not for distribution to the public. BOES Prospect Profile Industry classification is concentrated in: 1.Professional, Scientific and Technical Services 2.Manufacturing 3.Construction 4.Wholesale Trade 5.Retail Trade Most prevalent entity type is Corporation (S or C) –Over 40% of plans are sold to companies with more than 25 years in business –Most companies that buy plans have between 1-10 employees

8. For financial professional use only. Not for distribution to the public. The Opportunity Meet clients’ needs Deepen relationships Identify sales opportunities Helping you succeed:

9. For financial professional use only. Not for distribution to the public. BOES The Principal Difference BOES platform offers a complete package to give you an edge: Value-added tools Technical expertise through Advanced Solutions Customized proposals with recommendations Business-focused products Business underwriting programs Wholesale sales support Administrative services Everything you need in one place.

10. For financial professional use only. Not for distribution to the public. Support Before, During and After the Sale MarketingSalesService Producer sales ideas Client marketing materials Business priorities checklist Complimentary business planning services Access to Advanced Solutions for technical support Point-of-sale assistance More than 30 unique plan designs Customized proposals, with financial modeling Products and underwriting for the business market Accelerated Underwriting GI/SI on all permanent products BMA comprehensive plan-level services Annual employee and employer reporting Online access Economic benefit & 101(j) reporting Administer more than 11,500 plans

11. For financial professional use only. Not for distribution to the public. Key Business Solutions Supported Buy-Sell Strategies (all forms) Business Protection –Key Person Insurance Principal Bonus Plans –Principal Executive Bonus Plus SM –Principal S Owner Plus SM –Principal Select Reward Plan Nonqualified Deferred Compensation Plans –Executive Nonqualified “Excess” Plan SM –Executive Nonqualified Defined Benefit Plan –Principal SERP Select SM Estate Planning –Inheritance Equalization Gifting Sample services:

12. For financial professional use only. Not for distribution to the public. Coordinated Business Solutions Nonqualified Deferred Compensation Qualified Plan Solutions Trust Needs (Principal Trust Company, Deborah Harris, 302-993-8872) ESOP Solutions (Geoffrey PeConga, 888-393-8025, ext. 4013)

13. For financial professional use only. Not for distribution to the public. Identify Priorities 1 2 5 3 4 6

14. For financial professional use only. Not for distribution to the public. Open More Business Cases Today Complimentary Business Planning Services

15. For financial professional use only. Not for distribution to the public. Business Planning Services Business Planning Services Offerings –Informal Business Valuation with Customized Planning Report –Buy-Sell Review Summary

16. For financial professional use only. Not for distribution to the public. Why Use Our Business Planning Services? Do you really KNOW the value? A way to open a case with a business owner Three reports –An informal business valuation –A review of major provisions of the buy-sell –A review of funding needs A starting point for discussions with tax and legal advisors –To identify issues, or –Confirm the agreement meets current objectives

17. For financial professional use only. Not for distribution to the public. Need for Buy-Sell Review Create a market for the business Ensure exiting owner’s retirement income is in place Minimize discord among owners Prevent unwanted transfers Set the value of the business interest for estate tax purposes Provide the family with liquidity to maintain their standard of living A properly structured and funded buy-sell plan can help: Common triggering events: Death Disability Bankruptcy/insolvency Divorce Termination of employment (voluntary or involuntary) Retirement The agreement must be kept current.

18. For financial professional use only. Not for distribution to the public. Need for Informal Business Valuation Services The business is generally the owner’s most valuable asset Helps ensure buy-sell agreement funding is adequate Kick starts the planning process Opens multiple sales opportunities for you

19. For financial professional use only. Not for distribution to the public. Determining Needs Informal Business Valuation Results Do you have a buyer? What does your buy-sell say the value is? Does your buyer have insurance? Will this hold if your key person leaves? Will you be taxed on this, or this?

20. For financial professional use only. Not for distribution to the public. Business Planning Services Materials and resources on advisors.principal.com Marketing Guide –Includes approach script –Outlines sales process Marketing Materials – everything you need to approach business owners

21. For financial professional use only. Not for distribution to the public. Who to Approach – Informal Business Valuation Getting Started Good prospects: –Manufacturing companies –Construction companies –Professional service-related companies such as architects, healthcare systems, law firms, dental, engineering, accounting firms, etc. –Information technology companies –Profitable, growing businesses with gross revenues of $500,000 and above. Challenging prospects: –Farms –Non-profit organizations –Publicly traded companies –Nonprofitable businesses –Sole proprietors –Real estate holding companies –Financial services firms –New companies

22. For financial professional use only. Not for distribution to the public. Business Planning Services Fact Finder Just 5 easy questions can open a business case! How to Approach

23. For financial professional use only. Not for distribution to the public. Business Planning Services: What’s Needed? Informal Business Valuation Completed Business Planning Fact Finder 3 most recent Years Financials (Income Stmt/Balance Sheets or Business Tax Returns) 5 Business Day Turnaround Buy-Sell Review Completed Business Planning Fact Finder Business Continuation Plan Document with amendments Info on insurance funding agreement 15 Business Day Turn-Around

24. For financial professional use only. Not for distribution to the public. Additional Talking Points Have you confirmed what your business is worth? Would you want to be partners with your former partner’s widow? Does your buy-sell agreement refer to set price? Has that price been reviewed recently? Are all possible “triggers” included? Is a “mandatory buy-out” required upon death and/or disability? Is “disability” defined and consistent between the agreement and any/all funding vehicles?

25. For financial professional use only. Not for distribution to the public. Typical Sales Process Approach with complimentary Business Planning Services or Business Priorities Checklist Discuss potential needs and sales opportunities with resources from The Principal (wholesalers/Advanced Solutions) Present draft potential solution Discuss with client to uncover most important needs Customize solution and present to client

26. For financial professional use only. Not for distribution to the public. Disclosures The subject matter in this communication is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. Insurance issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Co. Plan administrative services offered by Principal Life. Securities offered through Principal Securities, Inc., 800-247-1737, Member SIPC and/or independent broker/dealers. Principal National, Principal Life, and Principal Securities are members of the Principal Financial Group®, Des Moines, IA 50392. No part of this presentation may be reproduced or used in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage and retrieval system, without prior written permission from the Principal Financial Group . Copyright ©2015 Principal Financial Services, Inc. BB10361-02 | 09/2015 | t1504290398

27. For financial professional use only. Not for distribution to the public. Questions?