1. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E W E A L T H C A R E Designing & Presenting Recommendations Presented by: David B. Loeper, CIMA ®, CIMC ®

2. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 2 The Wealthcare Value Proposition : Help your clients make the most of the one life they have….. The Premises of Wealthcare Advising: » Confidence in achieving goals each client values » Without UNDUE sacrifice to their lifestyle » Avoid UNNECESSARY investment risk Link to Value Proposition: http://www.financeware.com/ruminations/wealthcare.value.proposition.ppthttp://www.financeware.com/ruminations/wealthcare.value.proposition.ppt

3. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 3 To Deliver Advice Clients Will Value… You Must Understand their goals You Must Understand their priorities And You Must Have Confidence… In your ability to design a recommendation that makes the most of your client’s one life.

4. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 4 Designing Recommendations The Three “D”s Dreams Dollars and Deadlines Every Goal has: A Purpose (THE DREAM) An Amount (THE DOLLAR) And Time (THE DEADLINE) Since these goals impact how much is exposed to the market’s uncertainty… AND, since the goal “levers” can have as much or more impact as other factors… Modeling these goals with reasonable assumptions is important!

5. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 5 Designing Recommendations Spending RUBLES to Buy DOLLARS Working Longer BUYS Lower Portfolio Risk Spending Less Later BUYS Lower Savings Designing Valuable Recommendations IS Understanding What Your Client Wants to BUY and What They Are Willing to SPEND… (And Wealthcare Calculates the Price)

6. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 6 We Just Profiled Arvin and Alice…

7. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 7 How Do We Build Our Recommendation? They Valued: Jamaica Trips Lifestyle Education Avoiding Risk

8. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 8 How Do We Build Our Recommendation? They Valued: Jamaica Trips Lifestyle Education Avoiding Risk Lower Priorities: Gifting Estate Retirement Age

9. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 9 How Do We Build Our Recommendation? No Working From Ideal… Let’s Start By Removing the Early Gifting Uncertain 9%

10. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 10 How Do We Build Our Recommendation? No Working From Ideal… Now Let’s Take The Estate Goal Down to $500,000 Uncertain 33% $500,000 $1,730,348

11. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 11 How Do We Build Our Recommendation? What If We Move Up the Portfolio Risk? No $500,000 $1,730,348 8.32% 12.11% -9.73% Uncertain 72%

12. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 12 No $500,000 $1,730,348 8.32% 12.11% -9.73% How Do We Build Our Recommendation? What If We Move Retirement Out A Few Years? Comfort 83% 65 61

13. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 13 How Do We Build Our Recommendation? Now We Have a Recommendation That Delivers Our Value Proposition… No Comfort 83% $500,000 $1,730,348 65 61 8.32% 12.11% -9.73% $120,000 $32,411 3%

14. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 14 How Do We Build Our Recommendation? Now We Have a Recommendation That Delivers Our Value Proposition… No Comfort 83% $500,000 $1,730,348 65 61 8.32% 12.11% -9.73% $120,000 $32,411 3% Yes $25,000

15. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 15 What Did We Learn From Arvin and Alice? Knowing Their Goals and Priorities Made Building The Recommendation Simple… Their Recommendation Delivered What They Valued Without Making All Their Acceptable Sacrifices… Did We Deliver On Our Value Proposition?

16. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 16 How Good Are Your Inputs? Garbage In = Garbage Out What About Precision? Precise Inputs Matter… Sometimes. Which Inputs? Who Knows? By the way, Arvin & Alice just called… They have a new goal

17. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 17 How Would You Model Their New Goal? » Arvin & Alice have a large home worth $500,000 and the mortgage will be paid off by age 59

18. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 18 How Would You Model Their New Goal? » Arvin & Alice have a large home worth $500,000 and the mortgage will be paid off by age 59 » When they retire, they plan on selling it and buying a country club condo in Las Vegas that today would cost about $250,000 so they can golf more

19. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 19 How Would You Model Their New Goal? » Arvin & Alice have a large home worth $500,000 and the mortgage will be paid off by age 59 » When they retire, they plan on selling it and buying a country club condo in Las Vegas that today would cost about $250,000 so they can golf more » There is an initial membership fee of $30,000

20. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 20 How Would You Model Their New Goal? » Arvin & Alice have a large home worth $500,000 and the mortgage will be paid off by age 59 » When they retire, they plan on selling it and buying a country club condo in Las Vegas that today would cost about $250,000 so they can golf more » There is an initial membership fee of $30,000 » Their lifestyle expenditures would not really be different

21. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 21 How Would You Model Their New Goal? » Arvin & Alice have a large home worth $500,000 and the mortgage will be paid off by age 59 » When they retire, they plan on selling it and buying a country club condo in Las Vegas that today would cost about $250,000 so they can golf more » There is an initial membership fee of $30,000 » Their lifestyle expenditures would not really be different » But maintenance & gardening expenses would be about $300 a month less than if they stayed in their present home

22. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 22 How Would You Model Their New Goal? » Arvin & Alice have a large home worth $500,000 and the mortgage will be paid off by age 59 » When they retire, they plan on selling it and buying a country club condo in Las Vegas that today would cost about $250,000 so they can golf more » There is an initial membership fee of $30,000 » Their lifestyle expenditures would not really be different » But maintenance & gardening expenses would be about $300 a month less than if they stayed in their present home » And, the monthly membership fees are an additional $800 a month their current retirement income didn’t include.

23. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 23 How Would You Model Their New Goal?

24. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 24 It Could Look Something Like This… Sale of California HomeRETRETTAXABLE$500,0003% Nevada CondoRETRETN/A$250,0003%

25. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 25 It Could Look Something Like This… Sale of California HomeRETRETTAXABLE$500,0003% Nevada CondoRETRETN/A$250,0003% Initial Membership FeeRETRETN/A$30,0003%

26. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 26 It Could Look Something Like This… Sale of California HomeRETRETTAXABLE$500,0003% Maintenance SavingsRETENDTAXABLE$3,6003% Nevada CondoRETRETN/A$250,0003% Initial Membership FeeRETRETN/A$30,0003%

27. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 27 It Could Look Something Like This… Sale of California HomeRETRETTAXABLE$500,0003% Maintenance SavingsRETENDTAXABLE$3,6003% Nevada CondoRETRETN/A$250,0003% Initial Membership FeeRETRETN/A$30,0003% Annual Membership FeesRETENDN/A$9,6003%

28. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 28 It Could Look Something Like This… Sale of California HomeRETRETTAXABLE$500,0003% Maintenance SavingsRETENDTAXABLE$3,6003% Nevada CondoRETRETN/A$250,0003% Initial Membership FeeRETRETN/A$30,0003% Annual Membership FeesRETENDN/A$9,6003% Change State Post Retirement Tax Rate To 0% (Nevada)

29. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 29 Or Maybe You Modeled It This Way… Net Proceeds From MoveRETRETTAXABLE$220,0003% Net Proceeds From Move = $500,000 (Sale Of Home) - $250,000 (Nevada Condo) - $30,000 (Initial Membership Fee)

30. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 30 Or Maybe You Modeled It This Way… Net Proceeds From MoveRETRETTAXABLE$220,0003% Net Fee After SavingsRETENDN/A$6,0003% Net Proceeds From Move = $500,000 (Sale Of Home) - $250,000 (Nevada Condo) - $30,000 (Initial Membership Fee) Net Fee After Savings = $9,600 (Country Club Membership Fees) - $3,600 (Maintenance & Gardening Savings)

31. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 31 Or Maybe You Modeled It This Way… Net Proceeds From MoveRETRETTAXABLE$220,0003% Net Fee After SavingsRETENDN/A$6,0003% Net Proceeds From Move = $500,000 (Sale Of Home) - $250,000 (Nevada Condo) - $30,000 (Initial Membership Fee) Net Fee After Savings = $9,600 (Country Club Membership Fees) - $3,600 (Maintenance & Gardening Savings) Change State Post Retirement Tax Rate To 0% (Nevada)

32. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 32 Are You A Skilled Operator? If Not, Can You Invest the Time? Can You Remember Each of These Issues? You Know the Rewards of Being Skilled And the Price Can You Deliver The Value Proposition?

33. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 33 Wealthcare Recommendations… >>Deliver Your Value Proposition >>Dependent On Your Profiling (Goal Setting and Prioritization) >>They Are Not Buying The Report

34. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 34 Steps In Presenting Your Recommendations Step 1: Recap The Advising Process » Value Proposition » Purpose of Profiling

35. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 35 Steps In Presenting Your Recommendations Step 1: Recap The Advising Process » Value Proposition » Purpose of Profiling Step 2: Recap Their Priorities » You Valued Jamaica Trips Lifestyle (Now & @ Retirement) Arvin Jr’s Education Avoiding Investment Risk

36. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 36 Steps In Presenting Your Recommendations Step 3: Process For Calculating Comfort » Goals “Stress Tested” 1000 Times » Good and Bad Markets

37. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 37 Steps In Presenting Your Recommendations Step 3: Process For Calculating Comfort » Goals “Stress Tested” 1000 Times » Good and Bad Markets Step 4: Present The One Page Close » Illustrates The Important Information » Other Pages May Be Necessary If: You Do Not Present the Benefits You Did Not Connect on Goal Setting and Prioritizing Their Goals

38. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 38 The One Page Close » Acceptable Goals

39. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 39 The One Page Close » Acceptable Goals » Ideal Goals

40. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 40 The One Page Close » Acceptable Goals » Ideal Goals » Recommended Goals Balance Of Priorities Sufficient Confidence

41. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 41 The One Page Close You Valued: Jamaica Trips Education For Arvin Jr. Current Lifestyle Retirement Lifestyle Avoiding Investment Risk

42. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 42 Your Recommendation » Reconfirm Your Recommendations

43. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 43 Your Recommendation » Reconfirm Your Recommendations » Introduce Monitoring Not Future Values Dashboard For Decisions

44. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 44 Your Recommendation » Reconfirm Your Recommendations » Introduce Monitoring Not Future Values Dashboard For Decisions » Risk Of Changes = Minor & Manageable

45. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 45 Your Recommendation Allocation » Risk vs. Return Benefit of More Risk? Cost of Less Risk? » Recommended is “Just Right”

46. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 46 NOW’s The Time For Current » Allocation Worksheet » Implementation

47. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 47 In Conclusion This Is What We Are Paid To Do… » No Hocus Pocus » No Misleading Statements » No Fine Print Disclosures Saying Its Unreliable

48. ©Copyright Financeware, Inc., d/b/a Wealthcare Capital Management 2003-2008 All rights reserved P r o v i d i n g W E A L T H C A R E PAGE 48 Questions?