2013 Not On My Nickel. Monday, July 1, 13

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4 ? Do our employees understand the retirement investing playing field? 3

5 ? Do our employees understand the retirement investing playing field? Has our plan been updated to reflect how the rules of the game have changed? 3

6 ? Do our employees understand the retirement investing playing field? Has our plan been updated to reflect how the rules of the game have changed? Do our employees know where to find the best-performing funds at the lowest cost? 3

7 ? 4

8 ? Reduce your 401(k) plan costs? 4

9 ? Reduce your 401(k) plan costs? Provide proven portfolio returns and managers with lower fees? 4

10 ? Reduce your 401(k) plan costs? Provide proven portfolio returns and managers with lower fees? Empower employees to take control of their financial future & eliminate their dependency on others? 4

11 ? Reduce your 401(k) plan costs? Provide proven portfolio returns and managers with lower fees? Empower employees to take control of their financial future & eliminate their dependency on others? Reduce regulatory costs, saving taxpayer dollars? 4

12 ? Reduce your 401(k) plan costs? Provide proven portfolio returns and managers with lower fees? Empower employees to take control of their financial future & eliminate their dependency on others? Reduce regulatory costs, saving taxpayer dollars? Build a society of individuals who are responsible for their retirement? 4

13 ! MAJOR PROBLEMS WITH THE RETIREMENT INDUSTRY TODAY 5

14 ! MAJOR PROBLEMS WITH THE RETIREMENT INDUSTRY TODAY No professional standards 5

15 ! MAJOR PROBLEMS WITH THE RETIREMENT INDUSTRY TODAY No professional standards Investments are based on an increasingly controversial computer model 5

16 ! MAJOR PROBLEMS WITH THE RETIREMENT INDUSTRY TODAY No professional standards Investments are based on an increasingly controversial computer model Adds an unnecessary layer of cost that significantly reduces employee returns 5

17 ! MAJOR PROBLEMS WITH THE RETIREMENT INDUSTRY TODAY No professional standards Investments are based on an increasingly controversial computer model Adds an unnecessary layer of cost that significantly reduces employee returns Financial literacy efforts have failed due to lack of engagement and dependency on financial advisors 5

18 ! MAJOR PROBLEMS WITH THE RETIREMENT INDUSTRY TODAY No professional standards Investments are based on an increasingly controversial computer model Adds an unnecessary layer of cost that significantly reduces employee returns Financial literacy efforts have failed due to lack of engagement and dependency on financial advisors Financial industry advertising & marketing create demand for advice services, not engaging investors 5

19 America s retirement system desperately needs an overhaul to spare workers retirement savings from high fees, an unhealthy advisory dependence and poorly performing investments. FACT 30.3% Average retirement savings lost to fees over an individual s investing lifetime $154,794! LOOK The Retirement Savings Drain, Robert Hiltonsmith, Demos.org 6

20 America s retirement system desperately needs an overhaul to spare workers retirement savings from high fees, an unhealthy advisory dependence and poorly performing investments. FACT Recent studies show many 401(k) plans hold poorly performing options LOOK BrightScope 6

21 America s retirement system desperately needs an overhaul to spare workers retirement savings from high fees, an unhealthy advisory dependence and poorly performing investments. FACT Advice to employees in 401(k) plans is conflicted and fees are hidden from employee investors (advice fees should NEVER be embedded in 401(k) plans!) LOOK Third-parties agree 6

22 America s retirement system desperately needs an overhaul to spare workers retirement savings from high fees, an unhealthy advisory dependence and poorly performing investments. FACT Employees are taught through media, advertising and FINRA education to rely on an expert advisor. Because of this reliance they never learn how to invest directly, which prevents them from becoming engaged. LOOK 2012 NFCS Report 6

23 America s retirement system desperately needs an overhaul to spare workers retirement savings from high fees, an unhealthy advisory dependence and poorly performing investments. FACT Recent academic studies show Modern Portfolio Theory may be harming returns due to unnecessary portfolio rebalancing, which drives up trading costs which drives up hidden fees! LOOK The Retirement Savings Drain, Robert Hiltonsmith, Demos.org 6

24 ? DO YOUR EMPLOYEES KNOW... 7

25 ? DO YOUR EMPLOYEES KNOW... Which mutual funds they are invested in? 7

26 ? DO YOUR EMPLOYEES KNOW... Which mutual funds they are invested in? Which investment company manages their money? 7

27 ? DO YOUR EMPLOYEES KNOW... Which mutual funds they are invested in? Which investment company manages their money? The true fees they are paying for management in dollars, not percentages? 7

28 ? DO YOUR EMPLOYEES KNOW... Which mutual funds they are invested in? Which investment company manages their money? The true fees they are paying for management in dollars, not percentages? The experience, credentials and past performance of their ERISA or other financial advisor? 7

29 ? DO YOUR EMPLOYEES KNOW... Which mutual funds they are invested in? Which investment company manages their money? The true fees they are paying for management in dollars, not percentages? The experience, credentials and past performance of their ERISA or other financial advisor? Guidelines and criteria to understand what constitutes high fees and outperformance? 7

30 ? DO YOUR EMPLOYEES KNOW... Which mutual funds they are invested in? Which investment company manages their money? The true fees they are paying for management in dollars, not percentages? The experience, credentials and past performance of their ERISA or other financial advisor? Guidelines and criteria to understand what constitutes high fees and outperformance? How to compare their current portfolio performance to an option that can save them $100,000s over their investing lifetime? 7

31 ? DO YOUR EMPLOYEES KNOW... Which mutual funds they are invested in? Which investment company manages their money? The true fees they are paying for management in dollars, not percentages? The experience, credentials and past performance of their ERISA or other financial advisor? Guidelines and criteria to understand what constitutes high fees and outperformance? How to compare their current portfolio performance to an option that can save them $100,000s over their investing lifetime? They are ultimately responsible for their individual retirement savings? 7

32 Here s how your employees learn to say yes to these questions? DO YOUR EMPLOYEES KNOW... Which mutual funds they are invested in? Which investment company manages their money? The true fees they are paying for management in dollars, not percentages? The experience, credentials and past performance of their ERISA or other financial advisor? Guidelines and criteria to understand what constitutes high fees and outperformance? How to compare their current portfolio performance to an option that can save them $100,000s over their investing lifetime? They are ultimately responsible for their individual retirement savings? 7

33 People are demanding transparency about the fees they pay. IN OUT 8

34 People are demanding transparency about the fees they pay. IN Active management OUT Passive management (Index funds) by financial advisors based on Modern Portfolio Theory 8

35 People are demanding transparency about the fees they pay. IN DIY direct investing OUT Conflicts of interests with middlemen advisors 8

36 People are demanding transparency about the fees they pay. IN True portfolio manager fiduciaries OUT Self-serving financial advisors who present themselves as fiduciaries 8

37 People are demanding transparency about the fees they pay. IN Paying one low fee, one time OUT Paying advice fees multiple times due to hidden expenses to broker, financial advisor and 401(k) plan 8

38 People are demanding transparency about the fees they pay. IN Proven balanced funds OUT Controversial Target Date Funds 8

39 People are demanding transparency about the fees they pay. IN Keeping $100,000s in your employees retirement savings OUT Putting money in financial advisors pockets! 8

40 New online investing services are no better than traditional advisors to deliver what investors need today Low Fees Proven performance Experienced active PMs/ fiduciaries Conflict-free research & education designed to engage employees Passive/ Index investing Uses Computer model, Modern Portfolio Theory, Target Date Funds Charges advice fee Not On My Nickel X X X X Wealthfront.com X X X Betterment.com X X X Financialengines.com X X X Guidedchoice.com X X X Traditional Advisor X X 9

41 New online investing services are no better than traditional advisors to deliver what investors need today Low Fees Proven performance Experienced active PMs/ fiduciaries Conflict-free research & education designed to engage employees Passive/ Index investing Uses Computer model, Modern Portfolio Theory, Target Date Funds Charges advice fee Not On My Nickel X X X X Wealthfront.com X X X Are your employees aware of a new choice for retirement investing available Betterment.com X X X Financialengines.com X X X Guidedchoice.com today? X X X Traditional Advisor X X 9

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43 Independent, conflict-free research to find only the very few top portfolio managers that outperform the indices for 5, 10 and 20 years 10

44 Independent, conflict-free research to find only the very few top portfolio managers that outperform the indices for 5, 10 and 20 years Prudent alternatives to Target Date Funds 10

45 Independent, conflict-free research to find only the very few top portfolio managers that outperform the indices for 5, 10 and 20 years Prudent alternatives to Target Date Funds Ongoing research, education and employee engagement through interactive tools 10

46 Not On My Nickel is the first and only independent research and education service designed to engage employees. We simplify retirement investing and actively engage employees to take control of their future with tools that provide: 11

47 Not On My Nickel is the first and only independent research and education service designed to engage employees. We simplify retirement investing and actively engage employees to take control of their future with tools that provide: Transparency to immediately eliminate unnecessary fees 11

48 Not On My Nickel is the first and only independent research and education service designed to engage employees. We simplify retirement investing and actively engage employees to take control of their future with tools that provide: Transparency to immediately eliminate unnecessary fees Interactive education to make the confident investing choices 11

49 Not On My Nickel is the first and only independent research and education service designed to engage employees. We simplify retirement investing and actively engage employees to take control of their future with tools that provide: Transparency to immediately eliminate unnecessary fees Interactive education to make the confident investing choices Access to a short list of the best investment options 11

50 Not On My Nickel is the first and only independent research and education service designed to engage employees. We simplify retirement investing and actively engage employees to take control of their future with tools that provide: Transparency to immediately eliminate unnecessary fees Interactive education to make the confident investing choices Access to a short list of the best investment options Education to keep employees engaged to monitor their investing choices 11

51 Not On My Nickel is the first and only independent research and education service designed to engage employees. We simplify retirement investing and actively engage employees to take control of their future with tools that provide: Transparency to immediately eliminate unnecessary fees HERE S HOW IT WORKS... Interactive education to make the confident investing choices Access to a short list of the best investment options Education to keep employees engaged to monitor their investing choices 11

52 Eliminate the middleman from your employees retirement investing equation 12

53 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 13

54 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 1 Research all mutual funds against our six criteria 13

55 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 1 Research all mutual funds against our six criteria Superior, long-term results Managers with 10- and 20-year track records of outperforming the benchmark, by at least 2% after fees, when feasible. 13

56 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 1 Research all mutual funds against our six criteria Low management fees Total expense ratio is less than 0.75%. 13

57 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 1 Research all mutual funds against our six criteria Sustainable economic value Mutual funds who contribute to the improvement of the U.S. economy. 13

58 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 1 Research all mutual funds against our six criteria Low portfolio turnover Mutual funds with 15% or less portfolio turnover, when feasible. 13

59 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 1 Research all mutual funds against our six criteria Number of other funds managed by the company Companies that oversee one or two funds. Ones that do not stretch their resources by overseeing too many funds. 13

60 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 1 Research all mutual funds against our six criteria An operating philosophy that proves clients come first We ask: What is their history of ethics? Is the fund manager consistent in their strategy over time? Are fees excessive and the primary driver of their business? Is the manger pay excessive? Do they have past regulatory concerns or fines? 13

61 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach 1 2 Research all mutual funds against our six criteria Fact check the short list of portfolio managers against third-party rating services 13

62 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach Research all mutual funds against our six criteria Fact check the short list of portfolio managers against third-party rating services Fact check the short list against their SEC filings 13

63 Simplifies the Universe of 1,000s of Mutual Fund Choices by Doing the Time-Consuming Research Using a Three-Step Approach Research all mutual funds against our six criteria Fact check the short list of portfolio managers against third-party rating services Fact check the short list against their SEC filings The result is a handful of proven, active portfolio managers for employees to choose from 13

64 Employees choose from conflict-free, independent research resulting in only the best-performing mutual funds at the lowest fees 14

65 Employees choose from conflict-free, independent research resulting in only the best-performing mutual funds at the lowest fees All top investment options are: 14

66 Employees choose from conflict-free, independent research resulting in only the best-performing mutual funds at the lowest fees All top investment options are: Portfolio managers who are true fiduciaries overseeing discretionary investments (they make the best decisions for the investor) 14

67 Employees choose from conflict-free, independent research resulting in only the best-performing mutual funds at the lowest fees All top investment options are: Portfolio managers who are true fiduciaries overseeing discretionary investments (they make the best decisions for the investor) Qualified with decades of experience managing retirement assets that outperform their benchmark 14

68 Employees choose from conflict-free, independent research resulting in only the best-performing mutual funds at the lowest fees All top investment options are: Portfolio managers who are true fiduciaries overseeing discretionary investments (they make the best decisions for the investor) Qualified with decades of experience managing retirement assets that outperform their benchmark Never driven by computer models or algorithms 14

69 Employees select one or two core U.S. Equity or U.S. Balanced managers, typically representing 60% of their savings. Then, select International, Aggressive Growth, Bonds or Cash to round out 100% of their holdings 14

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71 Employees can choose Cash investments using the online step-by-step guide 15

72 Employees directly purchase their selected funds through the employer s brokerage window to save 0.25% 3.0% in unnecessary fees If the company does not have a brokerage window in their 401(k), one can easily be added 15

73 Employees stay connected with Not On My Nickel s educational pieces 15

74 Employees stay connected with Not On My Nickel s educational pieces Monthly Newsletter 16

75 Employees stay connected with Not On My Nickel s educational pieces Monthly Newsletter Weekly Educational Blogs 16

76 Employees stay connected with Not On My Nickel s educational pieces Monthly Newsletter Weekly Educational Blogs Daily Social Media 16

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79 See for yourself how employees can: 18

80 See for yourself how employees can: Access the safest, most conservative and cost-effective retirement savings option today as they take control of their financial well being 18

81 See for yourself how employees can: Access the safest, most conservative and cost-effective retirement savings option today as they take control of their financial well being While you: 18

82 See for yourself how employees can: Access the safest, most conservative and cost-effective retirement savings option today as they take control of their financial well being While you: Reduce your 401(k) plan costs 18

83 See for yourself how employees can: Access the safest, most conservative and cost-effective retirement savings option today as they take control of their financial well being While you: Reduce your 401(k) plan costs Provide proven portfolio returns and manager with lower fees 18

84 See for yourself how employees can: Access the safest, most conservative and cost-effective retirement savings option today as they take control of their financial well being While you: Reduce your 401(k) plan costs Provide proven portfolio returns and manager with lower fees Engage employees through transparency and education 18

85 See for yourself how employees can: Access the safest, most conservative and cost-effective retirement savings option today as they take control of their financial well being While you: Reduce your 401(k) plan costs Provide proven portfolio returns and manager with lower fees Engage employees through transparency and education Empower employees to take control of their financial future 18

86 See for yourself how employees can: Access the safest, most conservative and cost-effective retirement savings option today as they take control of their financial well being While you: Reduce your 401(k) plan costs Provide proven portfolio returns and manager with lower fees Engage employees through transparency and education Empower employees to take control of their financial future Reduce regulatory costs, saving taxpayer dollars 18

87 See for yourself how employees can: Access the safest, most conservative and cost-effective retirement savings option today as they take control of their financial well being While you: Reduce your 401(k) plan costs Provide proven portfolio returns and manager with lower fees Engage employees through transparency and education Empower employees to take control of their financial future Reduce regulatory costs, saving taxpayer dollars Build a society of individuals responsible for their retirement 18

88 Contact Susan Seltzer for a password: Info@NotOnMyNickel.com 19

89 i The first and only independent research and education service that teaches employees to take charge of their retirement savings Provides immediate access to the best-performing portfolio managers at the lowest fees Offers ongoing eduction and resources Grounded in a spirit of teaching others how to take control of their financial future Visit us at 20