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FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC tomorrows scholar ® Start Investing for Tomorrow… Today!

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Presentation on theme: "FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC tomorrows scholar ® Start Investing for Tomorrow… Today!"— Presentation transcript:

1 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC tomorrows scholar ® Start Investing for Tomorrow… Today!

2 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Disclosure statements tomorrows scholar portfolios involve risks, including the possible loss of principal. Consult a program description for additional information on risks. An investment in the Ultra-Conservative Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Ultra-Conservative Portfolio seeks to preserve the value of your investment at $10.00 per share, it is possible to lose money by investing in it. An investors or a designated beneficiarys home state may offer state tax or other benefits that are only available for investments in that states qualified tuition program. Please consider this before investing. Carefully consider the investment objectives, risks, charges, and expenses of tomorrows scholar before investing. For a current program description, containing this and other information, call or visit tomorrowsscholar.com. Read it carefully before investing. tomorrows scholar is a state-sponsored 529 college savings plan administered by the State of Wisconsin. Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment management and administrative services to the tomorrows scholar plan. Shares in the program are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company NOT FDIC INSURED – NO BANK GUARANTEE – MAY LOSE VALUE

3 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Agenda The importance of planning ahead Different college investing options What are 529s all about? tomorrows scholar Investment options within tomorrows scholar The multi-manager strategy SAGE Scholars Tuition Rewards ® Program Expenses and sales charges for tomorrows scholar

4 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Increased earnings are by no means the only positive outcome of higher education. The knowledge, fulfillment, self-awareness, and broadening of horizons associated with education transform the lives of students and of those with whom they live and work. - The College Board, Education Pays, 2010

5 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Costs based on estimate of average tuition, fees, and room and board in current dollars for 4-year public and private universities according to the 2011 Trends in College Pricing published by the College Board. Projected pricing assumes a 6% annual increase in college costs. The rising costs of a four-year college Tuition, books, room & board add up quickly The need for effective college planning $454,439 $210,873 Public University Private University

6 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Invest now or borrow later: To cover $25,000 in college expenses, investing for 10 years before college is a lot cheaper than paying back loans for 10 years after college.* The power of planning ahead $ $ $0 $50 $100 $150 $200 $250 $300 $350 Monthly InvestmentMonthly Loan Payment Advantage of Investing vs. Student Loans $165.56/month *Assumptions: Total cost of college $25,000; 8% annual return on investments and 8% loan interest rate, compounded monthly; 10-year investing period and 10-year loan payback period. Annual return does not represent the performance of any specific investment.

7 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC A program of regular investment cannot assure a profit or protect against a loss in a declining market. This hypothetical illustration assumes an average annual return of 8%. Annual return does not represent the performance of any specific investment. Regular contributions of any amount can really add up over time. This chart shows an account with monthly contributions over a 10-year period. $125 per month $250 per month $500 per month Putting time on your side

8 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC College investing options UGMA/UTMAs Coverdell Education Savings Accounts Roth IRAs Savings Bonds 529 College Savings Plans

9 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Flexibility for your clients Control of the account Tax advantages Estate planning Building your business with 529 plans

10 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Flexibility for your clients High contribution limits Anyone can contribute – no income level restrictions or age limitations Use at schools nationwide and many abroad for a wide range of expenses Money can be used for qualified expenses, including tuition, fees, books, supplies, room and board (student must be enrolled at least half-time), and required equipment Note: Individual states impose their own restrictions and rules on 529 College Savings Plans.

11 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Control of the account Control of assets remains with the person who establishes the account Successor Distribution Beneficiary

12 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC The power of tax-deferred growth This hypothetical illustration shows the growth of an annual investment of $5,000 made at the beginning of each year. It assumes a 28% tax bracket and an annual return of 8%, compounded monthly with a tax rate of 15% for dividends and long-term gains and 28% for short-term gains. The chart is for illustration only and does not predict or guarantee the performance of any tomorrow's scholar portfolio. Investors should consider their personal investment horizon, as well as their current and anticipated income tax brackets when making an investment decision. Compare the growth potential of a taxable investment vs. a tax-deferred 529 account

13 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Estate planning benefits Ability to capture larger dollars than traditional college investing plans Contributions to the plan qualify for the annual gift tax exclusion ($13K single / $26K married couple) Can gift up to $65K ($130K married couple) per beneficiary in one year without incurring gift and generation-skipping transfer taxes, provided no other gifts are made to the same beneficiary in the 5-year period Contributions are considered removed from the donors estate* *If donor contributes more than $13,000 in one year, and elects to apply the gift tax exclusion ratably over 5 years, but dies before the close of the 5-year period, the portion allocable to calendar years beginning after the date of death is included in the decedent's estate.

14 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Grandparents can get involved too Grandparents $520,000 Grandchild 1 $130,000 Grandchild 2 $130,000 Grandchild 3 $130,000 Grandchild 4 $130,000 Decreasing a taxable estate while paying for college The gift tax exclusion can be very powerful. In this example, a grandfather and grandmother each provide 4 one-time gifts of $65,000 to 4 grandchildren. The $65,000 gifts are prorated over five years and a total of $520,000 is removed from the couples taxable estate.

15 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Additional tomorrows scholar plan details Wells Fargo and the State of Wisconsin have teamed up to offer the tomorrows scholar college savings plan. The program is managed by Wells Fargo Funds Management, LLC.

16 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC The flexibility of multiple investment options Seven fixed allocation options Offering a range of investments, from more aggressive to very conservative Three enrollment-based tracks Offering portfolios that are based on the number of years until college enrollment These target date-type options automatically get more conservative as the years go by Wide range of options to meet your needs

17 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Fixed allocation portfolios Growth Portfolio Aggressive Growth Portfolio 64% 25% 11% Domestic Stock Funds Bond FundsInternational Stock Funds 50%43% 51% 40% 9% Balanced Portfolio Moderate Growth Portfolio 80% 17% 65% 30% Income Portfolio Conservative Portfolio Ultra-Conservative Portfolio 100% Money Market Funds 13% 10% 77% 7% 5% 3%

18 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Aggressive Growth Track Portfolios Moderate Growth Track Portfolios Conservative Growth Track Portfolios 100% 80% 60% 20% 0% 40% 100% 80% 60% 20% 0% 40% 100% 80% 60% 20% 0% 40% 10 or more 7 to 94 to 61 to 3In College 10 or more 7 to 94 to 61 to 3In College 10 or more 7 to 94 to 61 to 3In College Years to College Domestic Stock FundsBond FundsInternational Stock FundsMoney Market Funds Enrollment-based portfolios

19 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC The portfolios include investments from the following fund families: Wells Fargo Advantage Funds ® Wells Fargo Advantage Capital Growth Fund Wells Fargo Advantage Diversified Small Cap Fund Wells Fargo Advantage Growth Fund Wells Fargo Advantage Heritage Money Market Fund Wells Fargo Advantage Income Plus Fund Harbor Funds Harbor International Fund Columbia Funds Columbia Marsico Growth Fund Columbia Diversified Equity Income Fund ING Funds ING Intermediate Bond Fund The strength of a multi-manager strategy Wells Fargo Advantage Large Company Value Fund Wells Fargo Advantage Opportunity Fund Wells Fargo Advantage Special Mid Cap Value Fund Wells Fargo Advantage Total Return Bond Fund

20 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC SAGE Scholars Tuition Rewards tomorrowss scholar account owners receive discounts at private colleges No fee to join Over 265 member schools Tuition points are earned based on account balances Up to 10% annually Earn up to 25% off of a four-year undergraduate tuition Clients can register online at tomorrowsscholar.com/sagescholars As an advisor, you can also enroll clients and keep track of accounts online at tuitionrewards.com The Tuition Rewards program is offered and administered by SAGE Scholars, Inc., a private for-profit corporation. SAGE Scholars is not sponsored by or affiliated with Wells Fargo or the tomorrows scholar college savings plan. Value-added program

21 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC * For accounts opened on or after September 10, Growth and Balanced Portfolios include the Aggressive Growth (90% equity), Growth (75% equity), Moderate Growth (60% equity), and Balanced (50% equity) Portfolios 2 Fixed-Income Portfolios include the Conservative (35% equity) and Income (20% equity) Portfolios Class A load schedule* Breakpoints Growth and Balanced Portfolios 1 Fixed-Income Portfolios 2 Ultra-Conservative Portfolio $0 - $49, %4.50%0.00% $50,000 - $99, %4.00%0.00% $100,000 - $249, % 0.00% $250,000 - $499, % 0.00% $500,000 - $999, % 0.00% $1,000, %

22 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Portfolio expenses Fund Expenses Admin Fees Portfolio Expenses Aggressive Growth (90% Equity)0.87%0.30%1.17% Growth (75% Equity)0.81%0.30%1.11% Moderate Growth (60% Equity)0.74%0.30%1.04% Balanced (50% Equity)0.70%0.30%1.00% Conservative (35% Equity)0.62%0.30%0.92% Income (20% Equity)0.56%0.30%0.86% Ultra-Conservative (100% Money Market)0.20%0.25%0.45% Fund expenses are based on a weighted average of each underlying investment and the Funds expense ratio, as of July 8, These figures do not include the trailing commissions, which are 0.25% for Class A shares and Class C shares of the Ultra-Conservative Portfolio and 1.00% for all other Class C shares.

23 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Tax advantages Flexibility and competitive pricing Estate planning and gifting benefits Multiple investment options Multi-manager investment approach SAGE Scholars Tuition Rewards Program A recap of tomorrows scholar benefits

24 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Product brochure for clients One-page program reference sheet SAGE Scholars enrollment instructions and school listing Program description Available tomorrows scholar materials

25 FOR INSTITUTIONAL INVESTOR USE ONLY – NOT FOR USE WITH THE PUBLIC Investing for Tomorrow… Today!


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