Building the Swiss Global Investment Proposition PRESENTED BY Rebecca Murphy AUGUST 2017 Praemium Limited ACN: 098 405 826

praemium – provider of technology solutions for adviser businesses Cumbria Wensley Mackay SIPP Founded in 2001, now with 9 offices and over 200 staff Over 700 clients (including some of the world’s largest financial institutions), covering $80 billion in assets Serving financial advisers, financial institutions, stockbrokers, investment managers and accountants Proprietary technology London Praemium UK platform Armenia Software development hub Jersey Praemium International platform Hong Kong Praemium Asia Shenzhen Wealthcraft CRM development hub Coventry Plum Software Dubai International sales hub Melbourne Praemium Group Head office

Why choose praemium as a technology partner? Provider of ‘end-to-end’ technology and investment services for adviser firms Proprietary technology supports: Marketing and lead generation Advice and administration Buying, selling & managing your clients’ investments Regular and efficient communications with your clients Clear and focused business model Our solutions are designed around the specific needs of financial advisers and their clients. We get to know your business and requirements before proposing a solution. Client centric Over 10 years experience in the international markets. Data feeds to all major product providers One of the few established international custody & execution platforms (launched in 2012). We understand the offshore adviser market

The evolution of financial advice ‘The man from Pru’ £1 a week into a savings plan Recorded in a savings book Open Architecture Unit Trust Personal Equity Plan (PEP) Insurance Policies Endowment Mortgages Fund Supermarkets Insurance Polices Government sponsored pensions revolution: contract out of the company pension boost returns by investing in a personal pension loosely based on ‘stock market returns’ Saving plans With profit bonds Rise of the platforms UK Platform Assets 2000: £0bn 2010: £230bn 2016: £390bn Asset Allocation Diversifcation A Post RDR World Commission Trail Rebates Fees Transparency Qualifications Independence ‘Planning’ not ‘product’ However there was much disappointment when the savings plan was cashed in – The NET RETURN was very poor as the money invested needed to pay for: the man to collect the premiums the local office overheads policy charges & commissions Pre 1980 Pre 1980 1980’s > 1990’s 1980’s > 1990’s 1990’s > 2000’s 1990’s > 2000’s 2000’s > 2012 2000’s > 2012 2012 > 2017 2012 > 2017

The key disruptors facing adviser businesses Advances in technology Regulatory change Political or economic agenda

St Peter’s Square 2005 2013 …The same scene

Reactive Proactive 2 1 1 2 3 How to approach change Only 30 of original FTSE100 companies in 1984 are still on the list today in 2017 2 The single biggest mistake someone running a business can make is not planning to change at all 1 Reactive Proactive Spend time working ON your business not just IN your business 1 Make Change: Business As Usual 2 Get: Faster, Better and Cheaper to address the disruption 3

What clients really value? Where advisers spend their time What clients value Research indicates that Planners spend an enormously disproportionate amount of time early in the relationship particularly around Financial Data gathering and analysis, plan preparation, implementation and admin and product advice. When we then overlay where the clients actually perceive value in the relationship there’s a noticeable misalignment By continuing to focus our client relationships around products and investments we’re driving their expectation that the relationship is based around product performance, a situation which is unsustainable particularly given the current market volatility. Do you think client’s really want advice on superannuation, insurance and investments? What they really want is for Planners to help them to fulfil their Lifestyle goals. Financial data gathering Data analysis Plan prep Implement & admin Product advice Present plan Review & ongoing service Relationship management Source: Cerulli Associates FPA Principal Member Survey.

Why clients leave their advisers 13% Investment Performance 87% Poor Service Relationship Source: Russ Alan Prince - The Millionaire’s Advisor ™

Build your own financial planning & wealth management platform CREATE YOUR OWN PLATFORM CONTROL YOUR ADVICE PROCESS DEFINE YOUR PROPOSITION EXECUTE EFFICIENTLY CUSTODY & EXECUTION PLATFORMS PRACTICE MANAGEMENT / CRM FINANCIAL PLANNING INVESTMENT PROPOSITION ADVISER PORTAL INVESTOR PORTAL TAX / PRODUCT WRAPPERS REPORTING COMMUNICATE EFFECTIVELY

How can the right technology build value for your business? Helps deliver better client outcomes Allows efficient and targeted marketing More time to spend with clients Reduces cost of delivering advice Increases operational efficiency and reduces costs Improve communication with your clients De-risk your business Creates scale

Building the Swiss Global Proposition Bespoke Advisory Service Legacy or new Client Portfolios that cannot be transitioned or are invested in assets outside of the SG Investment Services Legacy Book Work with advisers to build an individual transition plan or Clients stay invested in bonds – “Bespoke Advisory Service” OMI Hansard RL360 STM Transition Mgt Plan Swiss Global CRM Advice Platform (WealthCraft) Providers & Wrappers OMI Hansard RL360 STM Swiss Global Trustee Service Adviser Fee: 1.00% Bond: 1.00% C&E: 0.20% Swiss Global Dynamic Advisory Service Adviser Fee: 1.00% Bond: 1.00% Platform fee: 0.25% Swiss Global Wealth Management Proposition ADVISORY SERVICE DISCRETIONARY “Core”: Multi-asset funds “Satellite” funds “Structured Products” Advisory risk graded model portfolios“ Swiss Global Models Range of DFM model Portfolios

Building the Swiss Global investment proposition PERSONALISATION ADVISER MANAGED PERSONALISED PORTFOLIOS Investor centric ADVISER MANAGED MODEL PORTFOLIOS SWISS GLOBAL MODEL PORTFOLIOS DFM MODEL PORTFOLIOS portfolio centric product centric manual Operationally Unconstrained SCALABILITY

Stage 1: Swiss Global Dynamic Advisory Service Swiss Global Investment Committee SELECT MONITOR REVIEW REPORT Swiss Global Client Risk Assessment DEFENSIVE CAUTIOUS MODERATELY ADVENTUROUS BALANCED VERY DEFENSIVE ADVENTUROUS VERY ADVENTUROUS Swiss Global Dynamic Advisory Service Multi Asset funds Satellite Funds Structured Products 60% + Up to 40% Up to 20% Portfolio Guidelines

The starting point – your client’s attitude and capacity for risk

Client risk profiles - strategic asset allocation guidelines Abbey (Oxford Risk) Profiles 1 Extremely risk averse 2 Defensive 3 Defensively cautious 4 Cautious 5 Cautiously balanced 6 Balanced 7 Growth seeker 8 Wealth accumulator 9 Speculating accumulator 10 Aggressive accumulator Risk Target 2.0% 4.0% 6.0% 7.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% Strategic Asset Allocation Equities 0.0% 25.0% 35.0% 45.0% 55.0% 67.5% 78.0% 92.0% 98.0% Fixed Income 40.0% 12.5% 5.0% 3.0% Property Absolute Return / Hedge 15.0% Cash 50.0%

Your Multi Asset Partners – Risk Mapping Abbey (Oxford Risk) Profiles 1 Extremely risk averse 2 Defensive 3 Defensively cautious 4 Cautious 5 Cautiously balanced 6 Balanced 7 Growth seeker 8 Wealth accumulator 9 Speculating accumulator 10 Aggressive accumulator Blackrock Blackrock Defensive 75 Defensive/ 25% Moderate 25% Defensive/ 75% Moderate Blackrock Moderate 75% Moderate/ 25% Growth 25% Moderate/ 75% Growth Blackrock Growth Rathbones Rathbone Total Return* Rathbone Strategic Growth 75% Strategic / 25% Enhanced 25% Strategic / 75% Enhanced Rathbone Enhanced Growth GAM GAM Star Defensive 75% Defensive/ 25% Cautious GAM Star Cautious GAM Star Balanced 75% Balanced/ 25% Growth GAM Star Growth

What does this deliver to your clients? Access to institutional pricing Diversified Portfolios Investment committee selects and reviews funds Links to your preferred tax wrappers Active mgt through core multi asset funds 24/7 view of portfolio valuation Clear & transparent fees Tailored to their risk profile

How do the costs compare? TOTAL 2.85 1.00 1.85 Typical Multi Asset Fund TOTAL 2.85 0.25 1.00 0.60 Swiss Global Dynamic Advisory Portfolio Ongoing Advice Fee Investment Management Cost of Investments Tax Wrappers Custody / Execution platform

What are the benefits for you as advisers?