1. Dealer Use Only OPTIMIZE TAX-DEFERRED INCOME PROTECT THE TRANSFER OF WEALTH HARNESS THE POWER OF COMPOUND GROWTH Invest Today with Tomorrow in Mind TM Turning Actionable Tax Ideas into a Lifetime of Advantage for Your Clients

2. Dealer Use Only Capital Preservation 1 The answers consistently given are: Growth 2 Tax Minimization 3 Introduction When Asked What is Most Important to Clients…

3. Dealer Use Only Introduction Source: 2006 Taxation Competitiveness Report, C.D. Howe Institute Canadian investors are among the most heavily taxed in the world.

4. Dealer Use Only Introduction Tax bill for the average Canadian family has soared 1,600% in the past 45 years Fraser Institute, “Tax Facts 14”, 2006

5. Dealer Use Only Introduction The average Canadian family paid almost 30% of earnings in taxes in 2005 vs. 22.1% in 1961 Fraser Institute, “Tax Facts 14”, 2006

6. Dealer Use Only Clients’ Biggest Retirement Issues Introduction Retirement Issue% of Respondents Saving enough money for retirement 78% Producing decent returns on retirement income 67% Intergenerational planning 13% Business succession planning 8% Dividing wealth among successors 5% Source: Advisor Group's 5th Annual Dollars & Sense Survey, 2006: a benchmark study on Canadian financial advisors.

7. Dealer Use Only Large Market and Inefficient Investments  Pre-retirees and retirees represent a “sweet-spot”  People aged 55 and up control 80% of investable assets 1  Many are in highly taxed investment vehicles  Over $730 billion sitting in GICs, certificates of deposits and other savings accounts 2  $121 billion in fixed income mutual funds 3  $19 billion in Canada Savings Bonds 4 Introduction Sources: 1 Capgemini, The Canadian Wealth Management Market 2004/2005, 2 Investor Economics 2005 Household Balanced Sheet Report, 3 IFIC September 2006, 4 Government of Canada, Debt Management Strategy, April 2006 Age: 70+ 27% Age: 55-70 53% Age: 30-55 19% Age: 16-30 1% Total Investable Assets

8. Dealer Use Only How Canadians Invest Tax Effectively Today Registered Retirement Plans: Introduction Non-registered tax-deferral vehicles are underutilized by Canadian investors Upside Downside Capped annual contributionsTax-sheltered growth Reduced flexibility during withdrawal period Defer taxes until marginal tax rate is lower Withdrawals taxed as income, less efficient than capital gains

9. Dealer Use Only Introduction Not All Cash Flows are Taxed Equally You keep 53.6% Tax paid 46.4% Interest / Income Tax paid 31.3% You keep 68.7% Dividends Tax paid 23.2% You keep 76.8% Capital Gain You keep 100% (taxes are deferred) Return of Capital Assumes a marginal tax rate of 46.41%, top rate for Ontario; non-eligible dividends Inefficient cash flow Efficient cash flow

10. Dealer Use Only What is Invest Today with Tomorrow in Mind™?  Understanding how decisions made today will impact your clients throughout their accumulation, decumulation, and wealth transfer phases of life  Focusing on how long-term tax efficient and tax effective investment strategies impact your clients’ overall wealth plan  Protecting your business from the inevitable impact of your clients’ RRIF drawdown and general tax erosion Introduction

11. Dealer Use Only How Investing Today with Tomorrow in Mind Works The Big Picture This seminar will show you how to potentially*:  Get up to 29% more wealth for your clients during their accumulation phase  Provide your clients approximately 20% higher income during their retirement period  Help your clients increase their overall wealth and position them for a tax efficient transfer to their estate All this, while you retain 30% more wealth in your practice Introduction *Returns are based on a $100,000 initial investment and a number of various assumptions, as outlined in the following pages. Returns are hypothetical and for illustration purposes only and are not a forecast or guarantee of future returns, performance of distributions of any Fund. Actual results could differ. Past performance may not be repeated.

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13. Harness the Power of Compound Growth  Flexibility to change investments without incurring a taxable event  Benefit from compounded growth  Keep your client’s assets invested in a lower tax bracket for life Actionable Strategies Using Corporate Class to Get Your Client’s Assets Working Harder

14. Dealer Use Only Actionable Strategies How Does Corporate Class Work?  Defer taxes on capital gains when switching between investments  Enables a lifetime of flexibility Fund A Fund B Fund CFund D Fund E Fund F Fund G Fund H Change investments as your client’s life changes under a tax deferred structure Corporate Class

15. Dealer Use Only Using Corporate Class: $826,695 Not Using Corporate Class: $642,974 The Difference: $183,721 Your client keeps $183,721 more on their $100,000 investment! Corporate Class in Action During the Accumulation Phase *Capital Gain taxes are paid by Non-Corporate Class investors when switching between funds Source: Globe HySales and Franklin Templeton, January 1, 1986 to March 31, 2006 To simulate the Corporate Class returns for pre-inception periods, annual Series A returns of the Funds were reduced by 22.5 BP (capital tax charges on Corporate Class), BCEF Series F returns were reduced by 169BP (actual return difference between series A and Corporate Class) Assumes: dividends reinvested, all taxes paid MTR 46.41%. Assumes investment on Jan.1 of the year shown and switch on Dec.31 of the year shown, excluding Franklin Templeton Balanced Growth Portfolio where the switch was not made and is indicated as n/a. Funds:TGFTISFBCEFFTBGP Total Investment Dates: 1986-901991-961996-022002-06 Taxes*:$10,257$45,024$42,753n/a$98,034 Actionable Strategies - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 19861988199019921994199619982000200220042006

16. Dealer Use Only Corporate Class in Action During the Decumulation Phase Actionable Strategies Your client gets 30% more After-Tax Income Scenario assumes effective tax rate is 27.94%. Marginal tax rate of 46.41%, 8% return per year, withdrawing 8% of income per year. The 8% return is hypothetical and for illustration purposes only, actual fund returns may differ. Total After Tax Income: In Corporate Class: $1,034,003 In Series A: $792,280 Series A Corporate Class 2122232425262728293031323334353637383940 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Amount invested: Corporate Class: $826,695 Series A: $642,974 30% More After Tax Income After Tax Income Year

17. Dealer Use Only Corporate Class in Action At the Transfer Phase Actionable Strategies Cash Flow Received (over a 20 year period) $792,280 $1,034,003 $241,723 More Income $504,288 $639,839 $135,551 More Asset Value Wealth at Transfer (At year 40) Your client benefits by a total of $377,274 Capital gains tax paid at year 40 is $186,856 on $826,695 for the Corporate Class Investment and $138,686 on $642,974 for the Series A investment. Assumes both are redeemed at the end of year 40. Net amount after all capital gain taxes paid

18. Dealer Use Only Actionable Strategies Application #1 Clients looking for a core investment solution that evolves with their risk tolerance and life stages.

19. Dealer Use Only Quotential and Corporate Class  Benefits:  Switch among 7 fully diversified portfolios  Address your clients’ risk profiles throughout their life stages without triggering a taxable event  Defer tax event until client is in lower tax bracket  Benefit from compounded growth Actionable Strategies

20. Dealer Use Only Actionable Strategies Quotential and Corporate Class A long term strategy that evolves according to your clients changing needs Tax sheltered environment During “ decumulation” money comes out as a capital gains INCREASING PORTFOLIO VALUE Dedicated Expert Management Canada’s only true proactive investment process A better risk / reward balance The Quotential Program Offers Your Clients:

21. Dealer Use Only Actionable Strategies Application #2 Individual and corporate clients seeking preferential tax treatment on their fixed income investments.

22. Dealer Use Only Preferential Tax Treatment on Fixed Income Investments Actionable Strategies Corporate Class Tax Shelter Managed Yield  For Individual Clients:  Beneficial for short-term transitory assets. Clients can hold investments in Corporate Class without triggering taxes  Ideal tax efficient income for clients who are approaching or are in retirement. Income investments are drawn down through a SWP and are in the form of capital gains  For Corporate Clients:  Capital gains have better tax treatment, allowing a corporation to bank any losses to reduce tax liability

23. Dealer Use Only Actionable Strategies Application #3 Clients looking to complement their RRSP

24. Dealer Use Only What About RRSPs? RRSP Tax Deduction Retirement Savings Tax-deferred flexibility Maximum annual contribution of $19,000 Non-Registered Tax deduction (with loan)* Retirement savings Tax-deferred flexibility (with Corporate Class) No maximum contribution Actionable Strategies Upon Decumulation… RRSP Full amount is taxed as income Forced to redeem at 69** Non-Registered Cash flow is generally taxed as capital gains*** No forced redemption *Interest may be deductible if certain criteria are met. Speak to your tax adviser about your specific situation. **Required to either redeem at 69 or rollover into a RRIF. ***Distributions may be taxed as income

25. Dealer Use Only A difference after 20 years after tax! Monthly Contribution/ Payment After 20 Years… Corporate Class Loan $50,000 loan invested in Corporate Class Funds with a monthly interest payment of $250* $233,048 ($50,000) loan principal = $183,048 RRSP PAC** $250$137,286 *For demonstration purposes only. Assumes the RSP and Corporate Class investments both grow at 8% annually and the $50,000 loan is an interest only loan with a rate of 6% with a marginal tax rate of 46.41%. Interest payment is deductible only if all conditions are met. Investor should talk with their tax advisor to discuss their specific situation. **A pre-authorized contribution (PAC) plan allows you to invest a specific amount of money at regular intervals. In Accumulation Actionable Strategies Corporate Class vs. RRSPs $45,762

26. Dealer Use Only Corporate Class vs. RRSPs In Decumulation $137,286 $183,048 Corporate Class RSP Actionable Strategies $18,644 pre-tax cash flow per year $3,232 in taxes per year (taxed as capital gains) $15,412 after-tax cash flow per year $13,983 pre-tax cash flow per year $6,490 in taxes per year (taxed as interest income) $7,493 after-tax cash flow per year Over 20 years 51% More/Year For demonstration purposes only. Assumes the RSP and Corporate Class investments both grow at 8% annually and the $50,000 loan is an interest only loan with a rate of 6% with a marginal tax rate of 46.41%.

27. Dealer Use Only Tools Actionable Strategies Show the Benefits of Corporate Class to Your Clients

28. Dealer Use Only Summary of Corporate Class  Choose from a wide range of investment solutions  7 Quotential Portfolios: Canada’s #1 Managed Program  27 Individual Mutual Funds  Benefit from compound growth – Your clients will have more $$ for retirement and more $$ for their estate  Defer taxes until your clients are potentially in a lower tax bracket = more money in their pocket Actionable Strategies

29. Dealer Use Only OPTIMIZE TAX-DEFERRED INCOME

30. Dealer Use Only Optimize Tax-Deferred Income  Flexibility to structure income around a clients’ specific requirements  Provide high, predictable cash flow while ensuring the lowest tax bracket on investment returns  Continue to grow your clients’ assets Actionable Strategies Using Series T to Put More Money In Your Client’s Pocket

31. Dealer Use Only Actionable Strategies How Does Series T Work? Using the power of ROC, Series T allows your clients to defer capital gains tax until later and enjoy a higher cash flow now Market Value Declining ACB Original ACB Time Sample Monthly RoC Distribution Value The ACB is lowered by each monthly distribution. If units are sold, the market value minus the current ACB is taxed as a capital gain.

32. Dealer Use Only Customize Your Cash Flow Switching between Series T and Series A of the same fund or portfolio is not a taxable disposition. This allows you to fine-tune your clients’ cash flow. 8% targeted distributions are not guaranteed and may change at the discretion of Franklin Templeton Investments. A T Actionable Strategies

33. Dealer Use Only Give Your Clients 16+ Years of Tax Deferred Income* * Assumes 8% annual growth with 6% annual Return of Capital. Returns are hypothetical and for illustration purposes only, actual fund returns and target distributions may differ. Actionable Strategies Series T in Action During the Decumulation Phase Initial Investment in Series T $600,000 16 2/3 years Gives you: $36,000/year (tax deferred) Ending Value: $1,017,003

34. Dealer Use Only Series T in Action At the Transfer Phase  Total cash flow over 16 2 / 3 years: $600,000  Total Market Value: $1,017,003  Taxes Payable at the end of 16 2 / 3 years: $235,995  Net After-Tax Value: $781,008 Total Value to Client over 16 2 / 3 years: $1.38 million Actionable Strategies A higher net value to your client’s Estate * Assumes 8% annual growth with 6% annual Return of Capital and assumes a tax rate of 46.41%. Returns are hypothetical and for illustration purposes only, actual fund returns and target distributions may differ.

35. Dealer Use Only Applications for Your Practice  Clients looking for regular, tax efficient income through an investment vehicle that can weather different market environments Also Consider Series T for:  Risk averse clients seeking income and estate preservation  Clients facing an Old Age Security (OAS) clawback  Philanthropic clients planning to give some of their investment to charity Actionable Strategies Series T is suitable for:

36. Dealer Use Only Actionable Strategies Looking for Income and Estate Preservation? The best of both worlds… *Assumes a tax rate of 46.41%. **Assumes no income distributions and no capital gains distributions ***For demonstration purposes only. Series T Example: Client purchases $500,000 last to die insurance, Cost is based on the average cost of insurance for a 65 year old couple based on Equitable Life Insurance rates. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Unlike GICs, mutual fund securities are not covered by the Canada Deposit Insurance Corporation or by any other government insurer. Assumes that Series T is continued to be held. Taxes will be payable if investment is redeemed. GICSeries T Initial Investment $500,000 Annual ROR5% Return$25,000 gross$25,000 net** Minus($11,602 taxes* )($7,500***) What’s Left in Your Pocket? = $13,397 net= $17,500 net + $500,000 Insurance Policy Approximate annual cost to purchase $500,000 Last to Die Insurance Policy

37. Dealer Use Only Actionable Strategies Clients Fighting the OAS Clawback  Transfer client’s interest-bearing securities worth $100,000 into a Series T fund with an 8% pre-tax ROC distribution 1  OAS clawback is reduced by $1,200 and taxes are potentially reduced by $2,952  Client’s total annual after-tax cash flow increases from $58,912 to $63,064* Don’t let your clients miss out on potentially $4,152 extra cash a year* 1 8% targeted distributions are not guaranteed and are subject to change at any time. Tax rate of 32.98% is assumed based on a client’s gross annual income is $70,000 from pension. The 2006 threshold for OAS Clawback is $62,144. $64,000 $63,000 $62,000 $61,000 $60,000 $59,000 $58,000 $57,000 $56,000 Keep more of your OAS using Series T funds – OAS Clawback reduced by $1,200 Put more money in your pocket – Taxes reduced by $2,952 Bonus Cash Flow from OAS Clawback Reduction Bonus Cash Flow from Tax Savings After Tax Flow from using Regular Funds

38. Dealer Use Only  Scenario 1: Redeem Series T and donate its net value in cash  Ending market value of units : $100,000  Taxes on capital gains: ($18,564)  Your donation receipt + :$81,436  Total Tax Reduction $19,230  Scenario 2: Donate Series T in kind at full market value  Your donation receipt: $100,000  Gross tax benefit of the receipt: $46,410  Your capital gains taxes: ($0)  Tax credit from receipt and total Tax reduction: $46,410 Donating Series T in-kind gives your client a tax advantage of $27,180 over a cash donation* Actionable Strategies Client Seeking to Reduce Taxes through Charitable Giving Tax Reduction from Donation $- $10 $20 $30 $40 $50 Cash Donation In-kind Donation $K *Based on a $100,000 donation, + tax credit receipt from $37,794. Assumes a tax rate of 46.41%

39. Dealer Use Only Tools Actionable Strategies Show the Benefits of Series T to Your Clients

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41. The Frequently Forgotten Transfer Phase Actionable Strategies Client and Advisor are at Risk Competing Advisors Death & Inheritance

42. Dealer Use Only A Complete Wealth Plan Actionable Strategies Gives Clients Peace of Mind and Enables Advisors to Build Stronger Relationships

43. Dealer Use Only How Can Investment Trust And Estate Planning Work For Your Clients?  Professional portfolio management  Advisor centric  Professional executor/trustee services  Expert consultation on will and estate planning  Specialized, independent legal advice by top-tier legal affiliates* Investment Manager Lawyer Executor/ Trustee Advisor Leveraging Corporate Class and Series T Strategies as Core Elements for Your Clients’ Transfer Plan Actionable Strategies *Fiduciary Trust Company of Canada (FTCC) will designate an independent legal advisor, or the client may choose to use their own lawyer. FTCC will reimburse a portion of the legal cost of preparing these documents to you through a rebate of investment management fees (not available to registered accounts) or by way of a cash refund. The maximum amount that is reimbursable varies by province.

44. Dealer Use Only Federally Regulated Trust Companies in Canada Trust Companies focused on Executor and Trustee services Trust Companies delivering Executor and Trustee services through independent advisors Trust Company delivering Executor and Trustee services integrated with Investment Management through independent advisors Source: OSFI website "Who we Regulate“, 2006 46 10 4 1 FTCC Actionable Strategies The Only Advisor Centric Program of its Kind

45. Dealer Use Only Actionable Transfer Strategies Which Clients Benefit From Fiduciary Trust’s Services?  People with large and complex estates:  Complex family situation  Business ownership  Multiple portfolios and properties, and/or  People seeking professional and expert advice on the proper execution of:  Administering an estate  Acting as trustee

46. Dealer Use Only Investing Today with Tomorrow in Mind… Conclusion …helping your clients with their financial future OPTIMIZE TAX-DEFERRED INCOME PROTECT THE TRANSFER OF WEALTH HARNESS THE POWER OF COMPOUND GROWTH

47. Dealer Use Only More Information…  Contact your Franklin Templeton Investments sales manager at 1.800. 897.7286  Start Investing Today with Tomorrow in Mind by visiting www.taxideas.ca www.taxideas.ca Conclusion

48. Dealer Use Only OPTIMIZE TAX-DEFERRED INCOME PROTECT THE TRANSFER OF WEALTH HARNESS THE POWER OF COMPOUND GROWTH Invest Today with Tomorrow in Mind TM Turning Actionable Tax Ideas into a Lifetime of Advantage for Your Clients