IMPORTANT DISCLOSURES

Transcription

1 Expand Your Reach.

2 IMPORTANT DISCLOSURES This presentation is for educational purposes only and is not intended to project the performance of any specific investment. May not be suitable for all investors. Past performance is no guarantee of future results. Any indices mentioned in this presentation are unmanaged and not available for direct investment. Investments and/or investment strategies involve risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives. For a complete description of investment risks, fees and services review the Brookstone Capital Management firm brochure (ADV Part 2) which is available from your Investment Advisor Representative or by contacting Brookstone Capital Management. Investment Advisory Services are offered through Brookstone Capital Management, LLC, a Registered Investment Advisor S. Naperville Road, Suite 200 Wheaton, IL www. brookstonecm.com (630) Additional information about Brookstone Capital Management, LLC is also available on the SEC s website at However, please note that registration as an Investment Advisor or Investment Advisor Representative does not imply any level of skill or training.

3 ABOUT BROOKSTONE BROOKSTONE AT A GLANCE Founded: 2006 Services: investment management through select network of independent advisor representatives Portfolios: Equity, Fixed Income, Correlation and Volatility Investment strategy: analytical approach to risk and reward Ranked: #27 on Financial Advisor magazine s 2013 list of Fastest-growing RIA Firms Ranked: Financial Times Top 300 RIA List for 2014 and 2015 Assets under management: Over $1.4B (March 2016) 2016 BROOKSTONE CAPITAL MANAGEMENT, LLC. ALL RIGHTS RESERVED.

4 DEAN ZAYED, FOUNDER & CEO BA Northwestern University JD Northwestern University Masters, Taxation, Chicago-Kent College of Law, CFP, Illinois insurance license for life, health and long-term care Brookstone ranked as sixth fastest-growing RIA and 218th overall in the U.S. in on Financial Advisor magazine s 2011 Top RIA list, July 2011 Member of the Million Dollar Round Table (MDRT), as well as the prestigious Top of the Table Top 5 Finalists Advisor of the Year Award by Senior Market Advisor magazine 2006 and 2007 Featured on General Alexander Haig s Chosen Topics, CNBC Dean Zayed, JD, LLM, CFP The Million Dollar Round Table is a trade association to help insurance brokers and financial advisors establish best business practices and develop ethical and effective ways to increase client interest in financial products, specifically risk based products like life insurance, disability and long term care. Membership in no way constitutes an endorsement from Million Dollar Round table or any client.

5 The Value of a Financial Professional

6 EXPERIENCED GUIDANCE We believe the guidance of a financial professional is essential to successful financial planning.

7 EXPERIENCED GUIDANCE Financial advisors can provide many valuable services. We can help you: Assess your financial goals, investment time frame and tolerance for risk, and monitor them over time Allocate your assets according to your financial situation Analyze the risks and potential rewards of various investments Understand the value of a long-term investment perspective and a diversified asset mix

8 FIDUCIARY STANDARD The advantage of working with a BCM Investment Advisor Representative is the mandatory fiduciary duty that requires him or her to place their interests below that of the client. In contrast, a broker s duty is to the broker-dealer he or she works for, not necessarily the client served. FIDUCIARY BROKER CLIENT PRODUCT ADVICE SALE Fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission, which may result in a conflict of interest regarding compensation.

9 SETTING GOALS We can help you prioritize your life goals and target your financial planning toward them: Retirement When do you want to retire? What kind of lifestyle do you want when you retire? College Do you need to set aside money for a child or other family member? Home purchase Are you saving for a down payment? Pay down debt How much debt do you have? Is paying it off a priority? Planning for the unexpected Do you have an emergency fund?

10 SMOOTHING OUT TURBULENCE In addition, financial professionals may provide support and guidance during difficult times, such as market downturns, wide interest rate or currency fluctuations and times of personal financial stress.

11 ADVISOR S ALPHA Vanguard has quantified the potential benefit of best practices in professional financial advisory at About 3%. Portfolio Construction Wealth Management Advisor Guidance Est bps Est bps Est bps Source: Vanguard.

12 INVESTOR EXPERIENCE Several studies over various time periods have further identified return gaps that advisors can help close. Source: Dalbar 2015 QAIB Study.

13 The Risk-Managed Approach of

14 OUR EMPHASIS ON RISK-MANAGED INVESTING Risk-Appropriate Investment Strategy Evaluation Our RAISE process ultimately adheres to one guiding principle: It is critical to defend against the severe impact large drawdowns can have on the long-term growth of an investment portfolio. By doing so, we think there is more opportunity to experience the power of compounding returns and mitigate the effects of inflation.

15 OUR EMPHASIS ON RISK-MANAGED INVESTING To RAISE investors expectations, you must start with quantifiable investment goals: Focus on goals-based performance, not benchmark chasing Gain exclusive access to unique, innovative money managers Seek rules-based, risk-managed approaches Implement strategy diversification Limit large losses/drawdowns Deliver competitive returns

16 MORE CHOICES, MORE APPROACHES is our newly enhanced investment platform that provides an even broader array of options for creating well-diversified portfolios in the face of today s volatile markets. Brand Name Money Managers Low Cost Exchange Traded Funds Boutique Asset Managers

17 STRONGER PORTFOLIO DESIGN Our goal is to build institutional quality portfolios adaptable and applicable to the individual investor. Source: Vanguard.

18 U.S. MARKET HISTORY It is important to have a realistic understanding of risk and return. Real returns SourceSiegel, Jeremy, Future for Investors (2005), with Updates to Copyright Jermy J. Siegel. Past performance is not indicative of future results.

19 ASSET ALLOCATION Asset allocation is the process of blending asset classes to help smooth out the journey.

20 ASSET ALLOCATION Approximately 88% of a portfolio s movements over time are explained by Asset Allocation, the remaining 12% by security selection and market-timing. Source: Vanguard

21 DIVERSIFICATION One of the potential benefits of diversification is compounded cumulative returns in dollars. Figures reflect nominal return number.

22 REALISTIC EXPECTATIONS Investors need to maintain a long-term disciplined diversification process to reap the long-term rewards. Well Researched Disciplined Process Focus on Goals V. Best Investment Ever

23 RAISE: A 21ST CENTURY INVESTMENT APPROACH The approach: Each strategy has its own risk-managed methodology and diversification Each strategy has a decided conviction to limiting large losses Diversifying across multiple, risk-controlled strategies is a dynamic approach to managing wealth for both performance and protection Sample composition for informational purposes only. The asset classes mentioned should not be deemed as a recommendation.

24 RAISE: A 21ST CENTURY INVESTMENT APPROACH Maintains a wide-reaching platform of investment strategies specifically geared toward the financial goals of our investors and their tolerance for risk Supported by the expansive financial intelligence of our stable of boutique sub-advisors Blends an array of innovative, actively managed investment strategies, each with its own built-in risk management methodology

25 RAISE: A 21ST CENTURY INVESTMENT APPROACH Employs an investment approach that relies on up-tothe-minute monitoring of market behavior and the intelligence to adapt accordingly In today s volatile markets, why buy and hope when you can buy and hedge?

26 AN ALL-WEATHER INVESTMENT PLATFORM EQUITY Strategies Invest in equity securities through stocks, MFs or ETFs Vary based on market cap, industry, sector and geography Managers use fundamental and/or technical analysis FIXED INCOME Strategies Invest in debt securities (bonds) directly or using MFs/ETFs Vary based on issuer, coupon and maturity Managers look at credit risk, interest rates and price/yield CORRELATION Strategies Invest in a blend of asset classes (equity, fixed income, etc.) Use historical & anticipated correlations across asset classes Some blend low-correlated securities, others blend high correlations VOLATILITY Strategies Options-based strategies Take advantage of volatility Mathematical approach - return and risk are quantified upfront

27 ACTIVE MANAGEMENT

28 ACTIVE MANAGEMENT TACTICAL Portfolio Managers Employ methods such as technical analysis, fundamental analysis and quantitative analysis. Seek to build a portfolio that includes the best possible positioning at any given moment, based on the manager s proprietary skills, algorithms, research and overall investment philosophy. STRATEGIC Portfolio Managers May use an actively-managed approach in which the buy and sell decisions are based primarily upon fundamental analysis, or they may use a passively-managed approach to security selection commonly known as indexing.

29 A COMPLETE INVESTMENT TOOL KIT

30 AGAIN, DIVERSIFICATION! We think our philosophy of strategy diversification is a powerful component of RAISE, and one that differentiates BCM from all other advisors. Strategy diversification is a next-level risk measure designed to mitigate drastic downturns and take more advantage of compounding returns.

31 BENEFITS OF STRATEGY DIVERSIFICATION Flexible portfolios that respond to changing market risks By partnering with experienced, innovative money managers, we can actively assess global market conditions to make real-time decisions based on market trends. Diversified return opportunities with potentially lower volatility By actively managing to a downside risk threshold, we work toward limiting severe losses. We believe this strategy gives investors the opportunity to experience stronger compounding. Return potential regardless of market conditions We believe our investment goals reflect what many of today s investors are seeking a steady approach to generating returns while carefully navigating market turbulence.

32 RAISE: THE ULTIMATE GOAL This hypothetical example is for illustrative purposes only and is not intended to project the performance of any specific investment or investment strategy and is not a solicitation or recommendation of any investment strategy. It is only designed to show the mathematical differences between substantial declines and less substantial fluctuations. It does not represent the trading of any actual account.

33 DISCLOSURES This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. All data believed to be reliable, but not guaranteed or responsible for reliance on this data. Past performance is not indicative of future results, which may vary. The value of investments and the income derived from investments can go down as well as up. Future returns are not guaranteed, and a loss of principal may occur. Not FDIC Insured, May Lose Principal Value, No Bank Guarantee. Risk tolerance, the capacity to accept risk, is a function of both the investor s willingness and ability to accept risk. Strategies may intentionally differ from traditional index type investments. Brookstone does not provide accounting, tax, or legal advice. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you may disclose to any person the US federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Brookstone imposing any limitation of any kind. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively and investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Exchange traded funds (ETFs) are offered by prospectus only. Investors should consider a fund s investment objective, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other important information is available and should be read carefully before investing. The investment return and principal value of an investment will fluctuate, so that an investor s shares, when redeemed, may be worth more or less than their original cost. ETFs trade like stocks and may trade for less than their net asset value. There will be brokerage commissions associated with buying and selling ETFs. No current prospective client should assume future performance of any specific investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes to investment strategies, contributions or withdrawals may cause the performance results of your portfolio to differ materially from the reported composite performance. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client s investment portfolio. Historical performance results for market indices generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperformance any particular benchmark. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and the types of securities held by the strategy. NOT FDIC INSURED. MAY LOSE PRINCIPAL VALUE. NO BANK GUARANTEE.