1. 1 Wealth Management Technology Today Timothy D. Welsh, CFP ® President Nexus Strategy, LLC

2. About Nexus Strategy, LLC 2 Founded in 2006 Strategy and Marketing Consulting Firm Industry Domain: Wealth Management, Independent Advisors Principal Experience: Merrill Lynch, Schwab Advisor Services Current Clients: Technology firms, Custodians, Independent B/Ds, Wealth Management Platforms Columnist and Blogger for Investment News, RIABiz and WealthManagement.com

3. Agenda 3 Wealth Management Landscape Today Technology Adoption Issues / Solutions Process Automation Example Questions?

4. Financial Advisor Landscape – 300,000 advisors by channel 4

5. Independence Continues to Win - Assets by Channel Cerulli 2012 5 ChannelAssets in Billions 5 year CAGR Wirehouses$5,360- 0.4% Independent B/D$1,8013.1% Independent RIA$2,3028.8% Regional B/D$1,8673.4% Dually Registered$1,0917.2% Bank B/D$629-0.9% Insurance B/D$4344.5% Bank Trusts /Private Client Groups$3,3451.9% Direct$3,997N/A Totals$20,104N/A

6. The Greying of an Industry – Financial Advisor Demographics 6 51 – Average age of advisors –59 – Average age of advisor/owners 43% are over the age of 55 33% are between 55-64 $2.3 trillion is controlled by advisors over 60 100,000 advisors will exit the industry in the next 10 years, yet only 25% have a succession plan Source: Cerulli Associates, 2014

7. Wealth Management – The Big Strategic Technology Trends 7 Advisor Productivity Ownership of the Home Screen Mobile Digital Advisors (Robo) Next Generation Wealth Views Technology Adoption

8. Technology Adoption – The Final Frontier 8 What is your CRM? (top 3) –Microsoft Outlook – 23% –None – 14% –Other (spreadsheet) – 14% 51% of advisors are not using a CRM Source: 2013 Financial Planning magazine technology survey

9. Technology Adoption – The Final Frontier 9 What is your Financial Planning software (top 2) –None – 31% –Other (spreadsheet) – 18% 49% of advisors are not using financial planning software Source: 2013 Financial Planning magazine technology survey

10. Technology Adoption – The Final Frontier 10 What is your Portfolio Management software (top 2) –None – 29% –Other (spreadsheet) – 17% 46% of advisors are not using portfolio management software Source: 2013 Financial Planning magazine technology survey

11. The Bad News – Technology Adoption Challenges 11 Highly fragmented industry Lack of data standards Changing regulatory environment Bull markets subsidizing inefficiencies Inertia Advisor age

12. The Good News: Technology Adoption Opportunities 12 Succession Planning Regulatory changes – Compliance demands Next generation of advisor Success of online advice platforms The leverage power of operational efficiencies

13. The Economics of a Financial Advisor 13 Revenues - Direct Expenses = Gross Profit - Overhead Expenses = Operating Profit 100% 44% 56% 42% 14% Industry Benchmark Source: Nexus Strategy, LLC aggregation of FA Insight, Investment News, Schwab Advisor Services benchmarking studies Income Statement

14. The Power of Operational Leverage 14 Revenues - Direct Expenses = Gross Profit -Overhead Expenses = Operating Profit 100 % 44% 56% 42% 14% 100 % 44% 56% 33% 23% Industry Benchmark “Post Technology Implementation” ~9% of revenue improvement Income Statement Source: ROI for RIAs – Laserfiche Industry White Paper

15. Operational Leverage Business Value Impact 15 Size of Firm $500,000$1,000,000$4,000,000 Multiple on cash flow 5710 Increased net income $43,000$89,000$342,000 Net value increase $216,000$626,000$3,421,000 Source: ROI for RIAs – Laserfiche Industry White Paper

16. Lessons Learned from Successful Technology Deployments 16 “Involve all stakeholders in the planning and requirements process - especially advisors and their staffs” “Don’t touch the software until all processes are mapped out in excruciating detail” “Develop a detailed and comprehensive communication plan for roll out”

17. Lessons Learned from Successful Technology Deployments 17 “Training, training, training – spend 30 cents on training for every software dollar” “Phased roll out – get early wins and points on the board quickly” “Celebrate and promote early adopters” “Develop reporting for executive management on progress”

18. Process Example: New Account Opening with E-Signatures 18

19. Questions? 19 @NexusStrategy tim@nexus-strategy.com 415-847-4874

20. 20 Wealth Management Today Timothy D. Welsh, CFP ® President Nexus Strategy, LLC