Preferred Portfolio Services SM. managed portfolios. striking the right balance.

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1 Preferred Portfolio Services SM select managed portfolios. striking the right balance. 2

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3 Striking the Right Balance Devoting the appropriate amount of time and energy to each of life s priorities is a real balancing act. It s a key reason you look to an independent financial advisor for help in planning your financial future. Life is complicated, and we take very seriously the trust you place in us to simplify and add value to your financial decision-making process. Which is why we re pleased to tell you about Preferred Portfolio Services SM (PPS) Select. It s a family of managed portfolios that can help us simplify your investments even further. You ll have both a financial professional managing your overall financial picture and a team of experts constantly monitoring and rebalancing your portfolio making your balancing act a little easier, and letting you go about the rest of your life with even more confidence that your money is working as hard as it can for you. 3

4 THE PPS SELECT ADVANTAGE PPS Select offers distinct model portfolios designed to pursue consistent, long-term, risk-adjusted returns on your investment. Available through Commonwealth Financial Network, each PPS Select portfolio holds a selection of underlying securities, including open-end mutual funds, closed-end funds, and/or exchange-traded funds (ETFs). Portfolio allocation is based on your personal investment objectives and consists of a percentage mix of asset classes that may include domestic and international fixed income and equity, as well as alternative asset classes, such as commodities or managed futures. Whether your investment strategy is one of long-term growth of capital, income generation, or a combination of the two, there may be a PPS Select solution that s right for you: Active portfolios are available for tax-deferred or taxable accounts, with a minimum investment of $25,000. Passive portfolios, as well as portfolios with alternatives, are available with a minimum investment of $50,000. Whatever your goals, you can be confident knowing that an entire team is dedicated to making sure your money is working for you. And you can stay abreast of your account performance by accessing your accounts anytime, anywhere, from Investor360, or through comprehensive and easy-to-read quarterly statements that include appropriate benchmark comparisons. An Experienced Team, An Independent Perspective When you choose PPS Select as an investment solution, you benefit from the expertise of seasoned asset managers who average more than 15 years of professional money management experience and the support and resources of an in-house investment research group. Together, their sole responsibility is to ensure that your portfolio stays in line with your objectives both for today and the long term. And Commonwealth s independent status means portfolio managers operate free from product bias or constraints, enabling them to make asset allocation, fund selection, and rebalancing decisions based on research-based methodology and stated portfolio objectives, as well as current market conditions and future outlook. 4

5 INVESTMENT PHILOSOPHY AND PROCESS Matching your goals with your tolerance for risk is at the heart of any sound asset allocation model, and it s an area where PPS Select stands out. Its managers rely on state-of-the-art asset allocation concepts and tools based on Modern Portfolio Theory to pursue a long-term strategy that s rigorous and disciplined, yet flexible enough to take advantage of short-term market opportunities. A comprehensive five-step due diligence process is followed to determine which investments are included or removed from PPS Select portfolios: Step 1: Asset Allocation. Portfolio managers seek to optimally allocate your investments among different assets, as appropriate, for varying levels of risk. Adjustments are made, as necessary, based on ongoing evaluation of prevailing market conditions. Step 2: Security Selection Quantitative Review. A quantitative system is applied to evaluate investments on objective criteria such as absolute and benchmark-relative performance, risk tolerances, attribution analysis, and consistency. Step 3: Security Selection Qualitative Review. Qualitative factors such as the fundamental investment process and the people who manage the portfolio are assessed to determine how an investment operates and whether it warrants future consideration. Step 4: Portfolio Construction. Portfolio managers identify investments that balance and complement one another in an effort to optimize the potential for strong risk-adjusted returns. Step 5: Ongoing Monitoring. Portfolios are monitored on an ongoing basis through performance reviews, holdings attribution analysis, firm commentary reviews, and regular conference calls and meetings to determine whether they are meeting their investment objectives. Maintaining Equilibrium Adherence to a consistent rebalancing strategy helps ensure that your PPS Select account stays on track and in line with the defined tolerance levels or bands allowable to a particular asset class. Over time, portfolio characteristics and asset weightings may shift away from this designated comfort range. Through proactive and continuous monitoring, portfolio managers can identify whether positions have become too risky or too conservative, and make adjustments as necessary to rebalance the model s target weight. 5

6 ADD SOME BALANCE TO YOUR LIFE Give us a call today so we can begin working with you to determine a PPS Select solution that s compatible with your goals. You ll find that having a financial professional managing your overall financial picture and a team of experts constantly monitoring and rebalancing your PPS Select portfolio is a powerful combination. Because it s one that makes it even easier for you to focus on the rest of your life. The PPS Select program, available to clients through Commonwealth advisors, is a wrap program. In a PPS Select account, each client holds a selection of underlying securities, including open-end mutual funds, closed-end funds, and/or ETFs, in an asset-allocated portfolio. Each PPS Select account consists of a percentage mix of asset classes, composed of domestic and/or international fixed income and equity and alternative asset classes, such as commodities and managed futures. The client s funds are invested separately by the manager. Target allocations are subject to change.

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8 commonwealth.com Member FINRA/SIPC 1 Securities and Advisory Services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. WMFB-5582_09/11