EDITORIAL and MARKET TRENDS UPDATE: WIREHOUSES AND REGIONAL FIRMS Frances McMorris Editor-in Chief of On Wall Street Editorial Director, Special Projects

On Wall Street THE AUDIENCE As of the end of 2011, there 629,518 registered representatives. On Wall Street covers financial advisors/brokers/wealth managers who are employees of the largest full-service, national and regional brokerage firms. On Wall Street THE AUDIENCE As of the end of 2011, there 629,518 registered representatives. On Wall Street covers financial advisors/brokers/wealth managers who are employees of the largest full-service, national and regional brokerage firms. (Source: FINRA.org)

Wirehouse Head Count

The War for Talent/Compensation Competition Capturing more of a high-net-worth client’s assets Retirement Income Distribution Global Investment/Emerging Markets Investment and Tax Strategies & Products: Mutual Funds, Annuities, Separately Managed Accounts, Exchange-Traded Funds Market Trends In Wealth Management

The Dominant Force in Market Share Wirehouses and Regionals Will Continue To Control Market Share of Client Assets Even Though the Number of Advisors in This Channel is Trending Down. Source: Cerulli

Trends and Impacts Advisors are moving from wirehouse to wirehouse; from wirehouse to independent B/D and RIA; from IBD to IBD Wirehouses, banks and IBDs consolidated to shore up solvency. Four large wirehouses remain; regionals are gaining share of advisors IMPACT ON READER Individual advisors are still struggling with how to define their value after 10 years of managing money in a flat to down market. Advisor must “re-engage” clients with new communications and services Use technology to free them to spend “face time” with clients … Wirehouse advisors need to understand new compensation structures All advisors need news about structural and competitive changes Culture shock an issue as advisors move

The coming “fiduciary standard” could reshuffle the competitive cards The Securities and Exchange Commission is still devising a uniform fiduciary standard for all financial advisors, regardless of whether they work for broker-dealers or as registered investment advisors. IMPACT ON READER Brokerages will lose 4%-10% of their broker-generated profits each year by some estimates Costs will include new compliance and training as well as new software (SIFMA) Broker-dealer reps want training. (Financial Planning/On Wall Street/Envestnet poll) Firms will have to provide greater supervision over advisors, transparency and disclosure to investors Trends and Impacts

GLOBALIZATION High-Net-Worth individuals continue to move investments beyond their home regions (Capgemini World Wealth Report) Among U.S. investors, the equity mutual funds with the highest inflows in 2010 YTD were overseas funds (Morningstar) Trends and Impacts

DEMOGRAPHIC DYNAMICS The Retirement Wave is coming and we’re unprepared Baby Boomers have started turning 65 in big numbers. (US Census) As of 2010, 57% of Americans expect their spending in retirement to be lower than it is today, and 70% of retirees intend to work for pay. (EBRI) Today, a man's average life expectancy at 65 is 17.2 years (to age 82), roughly 32% longer than in 1970 (US Census) A 65-year-old woman today can expect to live another 20 years, on average, compared to 17 in 1970.

Trends and Impacts IMPACT ON READER Advisors will need to help clients stretch money to last 30+ years. Market volatility could have greater impact on portfolios in decumulation mode. New products will have to supplement/replace Medicare, Social Security and traditional pensions. Need for retirement planning and cross-sell (long-term care, annuities, etc.). Advisors, especially at banks, struggle with both.

Products Sold by Readers to Their High-Net-Worth Clients IRAs/Keoghs 529 College Savings Plans Fixed Income/Bonds Common Stock Variable Annuities Mutual Funds (LOAD) Exchange-traded funds REITS Alternative investments

Serving Readers and Online Viewers Editorial Content On Wall Street - the monthly print magazine In-depth coverage of the companies and people that shape the industry Retirement issues in The Wealthy Retiree Investment strategies in Peak Performance Practice Management in The Practice (Careers, Case Study, Compliance) Compensation - Special, unique, exclusive coverage every March Top Branch Managers of the Year Top 40 Under 40 every December Recruiters Roundtable

New Broker-Dealer Survey - June 2012 Unique database of the employee/advisor firm universe Ranks firm by total revenue Breaks down revenue by fees and commissions Cites Number of Reps Cites Average Production Per Rep Cites Commission & Fee-based products revenue

Women Advisor Forums A LIVE EVENT SERIES HAS GROWN 6 forums in forums in forums in 2010

OnWallStreet.com AdvisorTV: online video interviews with leading industry figures

Top Branch Managers of the Year

Onwallstreet.com/Online BLOGS AND SOCIAL MEDIA The Smart Advisor blog Twitter LinkedIn Facebook Women Advisors Forum community E-NEWSLETTERS Daily newsletter & Breaking News Alerts Monthly Wealth Management newsletter

Content Analysis - Comparison to Rivals Source: Lodestar/onwallstreet.com user study July 2010

On Wall Street’s Brand Strength Serves the wealthiest & most successful advisor channel These advisors control $4.64 trillion in client assets Exclusive coverage of advisor compensation trends Expert commentary on issues and subjects affecting the audience such as the Annual Recruiters Roundtable A Multimedia Brand with live events such as the Women Advisor Forums, online web coverage including AdvisorTV and specialized awards such as the Top Ten Branch Managers of the Year. Access to and interviews with the leaders and major players of the firms in this channel