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Bear markets by the numbers

Bear markets by the numbers. Between 1929 and October 2008 there have been 15 Bear Markets, defined as those periods when the S&P 500 has fallen at least 20%

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Bear markets by the numbers

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  1. Bear markets by the numbers • Between 1929 and October 2008 there have been 15 Bear Markets, defined as those periods when the S&P 500 has fallen at least 20% • The average Bear Market slashed almost 39% from stock prices. Omit the ’29 crash, when values declined 87%, and the result is still an average loss of 36.1% • During the 81-year period, a new Bear Market began on average every 5.4 years, with an average duration of 18.1 months • Omitting the distortion of the 1929 crash, the average time lost making up for a Bear Market (zero earnings): 3.6 years Source: FPI 2010

  2. The cycle of investor emotions Many retirement plan participants make emotion-based investment decisions, which lead to poor performance & dissatisfaction with a 401(k) plan.

  3. FPI breaks the cycleComplete customized management • Core fiduciary services for participant-directed accounts • Qualified Default Investment Alternative (QDIA) accounts • Suitability-based managed accounts for electing participants

  4. How it works Participants have two choices and a default for those who fail to choose • Participants may elect to self-direct their own account • Participants may choose to have Flexible Plan manage their account based on the results of a suitability questionnaire • Participants who fail to elect will be managed in one of four age-related, moderate portfolios

  5. Flexible Plan provides Core Fiduciary services for Plan Sponsors

  6. QDIA & Model Portfolios • QDIA: We provide age-based, moderate suitability-managed accounts • Custom managed account services based on each plan participant’s questionnaire responses: • Evaluates your financial circumstances • Designs a customized solution for the participant • Chooses investments that align with the participant’s expressed goals • Actively monitors participant investments • Uncovers the top-performing investments in each asset class • Utilizes equity, fixed income, alternatives, and even money market and inverse funds to seek to harness market risk

  7. Strategy selection – one size does not fit all

  8. Reducing fiduciary liability for investment decisions There are three methods provided: • 404(c) – Participant-directed accounts • 405(d) – Use and monitor a Registered Investment Advisor to make the trading decisions • Qualified Default Investment Alternative (QDIA)

  9. For a single fee, FPI does it all • 75 basis points on plan AUM • Core Fiduciary Services for participant-directed accounts (10 basis points) • Qualified Default Investment Alternative managed accounts (75 basis points) • Custom suitability-based accounts for electing participants (75 basis points) • Plan advisors can add total of 100 bps for: • Reps • TPAs • Ask about our Family Plan

  10. The FPI Advantage • Re-allocation of fiduciary liability • 5 management styles available • All with active, not passive investing • All in one: core fiduciary, QDIA, managed accounts • Thousands of no-load mutual funds to invest in • Local sales support in the field • In-house sales and customer support • OnTarget monitoring of each investment strategy

  11. Flexible Plan Investments, Ltd. | 3883 Telegraph Road, Suite 100, Bloomfield Hills, MI 48302 FOR INVESTMENT PROFESSIONALS ONLY. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.

  12. Benefits • Single source provider & custodial partner provides: • Third party administration • Daily valuation recordkeeping • Prototype plan documents • Custody • Trade processing • Loan processing • Distribution processing • All under one roof providing you a single point of accountability • Open-architecture platform

  13. Benefits, continued • Work in concert with our managed asset solutions • TCA supports Flexible Plan strategies for participant balances in addition to self-directed core fund options • Safe and secure custody • TCA is an FDIC insured depository (Note: investment products are NOT FDIC insured) • Mutual funds from many fund families are available • All mutual funds are offered at NAV (without a load commission) • All are real funds tracked in financial publications or websites

  14. For participants • Internet and VRU access • Self-directing participants may view and change their investments at any time every day via the Internet or VRU • Vested and unvested balances, contributions and earnings are all available for viewing on a real-time basis • Participant statements • Quarterly participant statements are mailed by the 15th business day of the month following the end of the quarter

  15. Dedicated customer support • Plan will be assigned a dedicated contact representative to assist with implementation • Weekly updates will be provided • Each plan will have a dedicated Client Account Representative servicing the plan sponsor and participants

  16. Service levels • TCA can offer recordkeeping services only working in conjunction with a local TPA • but… the local TPA fee is in addition to TCA fee, which is lowered only slightly • TCA can also offer a full-service bundled product when there is a desire to change a TPA or there is not a TPA involved

  17. Pricing matters • Easy and transparent pricing model • Based on plan size – no fees for takeover • Priced from a matrix that compares the number of participants in a plan (with balances) and the average assets per participant • “All in” pricing, including: • Investment Management & Core Fiduciary paid to FPI • Fee to Advisor • Recordkeeping, custody and administration • All fund 12b-1 & Sub-TA payments are credited against fees

  18. Marketing materials 401(k) Overview Flyer Great for drop-offs or informal presentation • 401(k) Proposal Kit • Available upon request for Plan Sponsor appointments only • Contact our Internal Sales Department at 800-347-3539 ext. 2 or sales@flexibleplan.com

  19. How to get started –Meeting with the Plan Sponsor • Obtain a proposal & paperwork to transfer your plan assets to Trust Company of America • Click on “Create your plan documents” from the Strategic Advantage 401(k) Online Document Process page & complete all required fields • Submit the signed agreements to Flexible Plan to begin the process

  20. Sample proposal

  21. Differentiating factors • Managed account capability • High quality investment options & reporting • Dedicated service at Flexible Plan & TCA • Unique pricing • State-of-the-art technology • All-in-one simplicity • Suitability-based Flexible Plan strategies

  22. Disclosures This presentation is provided for information purposes only and should not be used or construed as an indicator of future performance, an offer to sell, a solicitation of an offer to buy, or a recommendation for any security. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Inherent in any investment is the potential for loss as well as profit. A list of all recommendations made within the immediately preceding twelve months is available upon written request.

  23. Get Started Right Away! Contact our Sales Team for a secure password and a personally guided tour of the advisor tools available to you Email: sales@flexibleplan.com Phone: 800-347-3539 ext 2 or 248-642-6640 (Metro Detroit)

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