EDITORIAL and MARKET TRENDS UPDATE: WIREHOUSES AND REGIONAL FIRMS

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

2. On Wall StreetTHE AUDIENCEAs 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)

3. Wirehouse Head Count

5. Market Trends In Wealth Management • 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

6. 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

7. 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

8. Trends and Impacts 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 yearby 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

9. 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)

10. 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.

11. 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.

12. 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

13. Serving Readers and Online ViewersEditorial 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

14. 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

15. Women Advisor Forums A LIVE EVENT SERIES HAS GROWN 6 forums in 2012 - 5 forums in 2011 - 4 forums in 2010

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

17. Top Branch Managers of the Year

18. 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

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

20. 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