A R I S K - B A S E D A S S E T A L L O C A T I O N P R O G R A M TOPS. Pioneers in Strategic ETF Portfolios. 1 of 20

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1 A R I S K - B A S E D A S S E T A L L O C A T I O N P R O G R A M VALMARK ADVISERS, INC. TOPS Pioneers in Strategic ETF Portfolios 1 of 20

2 TABLE OF CONTENTS Foundational Investment Management Theory TOPS Process TOPS Portfolios TOPS Value Proposition 2 of 20

3 Foundational Investment Management Theory 3 of 20

4 WHAT IS TOPS Built on the sound financial principles of Modern Portfolio Theory, Black Litterman, Efficient Market Hypothesis, Asset Allocation, and Indexing One of the longest running investment programs utilizing ETFs. Professionally managed using risk management to create globally diversified goals based portfolios: A Strategic Approach to Active Indexing : a unique, disciplined process seeking to manage risk and maximize longer-term risk adjusted returns Portfolios are structured with an ongoing appraisal of the global market, correlation, volatility data and allocated primarily using index tracking Exchange Traded Funds (ETFs) Modern Portfolio Theory - A theory on how risk-averse investors can construct portfolios to optimize or maximize expected return based on a given level of market risk, emphasizing that risk is an inherent part of higher reward. Black-Litterman - model used to estimate inputs for portfolio optimization. It mixes different types of estimates, some based on historical data, others based on equilibrium conditions to arrive at updated estimates. Efficient Market Hypothesis - An investment theory that states it is impossible to beat the market because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. 4 of 20

5 APPLYING SOUND PRINCIPLES APPLYING PRINCIPLES Global Diversification Multiple low/un-correlated assets Strategic long term investing Tax efficiency Transparency Source: ishares. Foreign stocks are represented by the MSCI EAFE Index; Large cap stocks are represented by the Standard & Poor s 500 Index; Small cap stocks are represented by the Standard & Poor s SmallCap 600 Index; Real estate is represented by the Dow Jones U.S. Real Estate Index; US corp bonds are represented by the iboxx $ Liquid Investment Grade Index This material has been obtained from sources generally considered reliable. Diversification cannot assure a profit or guarantee against loss. No guarantee can be made as to its accuracy. Not intended to represent the performance of any particular investment. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results 5 of 20

6 THE INDEX ADVANTAGE History has consistently demonstrated that most actively managed mutual funds underperform their respective indices over time. On the other hand, index tracking exchange traded funds (ETFs) were designed to capture index performance (less investment costs). They typically provide additional benefits such as tax efficiency, transparency, and increased liquidity. Percentage of active funds that have underperformed their Benchmark index over varying timeframes: 6 of 20

7 THE SMARTEST INVESTOR IN THE WORLD Smartest Investor Invests in the best performing asset class each year One Year Behind Invests in the best performing asset class from the previous year S&P 500 Stock market index consisting of the 500 largest companies listed on the NYSE or NASDAQ Diversified Invests in the following mix: 25% Large Cap 20% Small Cap 15% International 10% REIT 30% US Gov t Bond Measuring performance (return) of a portfolio should always be accompanied by the amount of risk associated with generating that return. By analyzing risk adjusted returns an investor can compare each portfolios relative return based on the amount of risk exposure. Generally, as a portfolio s diversification increases so does its risk adjusted return. Investor Return Standard Deviation Smartest Person 25.90% 10.20% One Year Behind 2.90% 20.10% S&P % 17.20% Diversified 9.60% 11.20% Standard Deviation is a measure of volatility of an investment or portfolio The Information presented here is hypothetical. 7 of 20

8 TOPS Process 8 of 20

9 3 KEY PHRASES The TOPS Process 9 of 20

10 ASSET ALLOCATION TARGETS The TOPS Process begins by defining various major asset classes for inclusion in diversified, goals based portfolios. The components are then optimized using risk, return, and correlation analytics; creating risk controlled allocation ranges as shown below. (Ex. US SMID CAP) Target allocations (overweight or underweight) are then selected based on current and projected global economic conditions. 10 of 20

11 ETF SELECTION The TOPS Portfolio Management Team reviews various metrics when selecting the underlying ETFs for each goals based portfolio. Some of which include: Provider ETF experience, AUM, Stability, Breadth of offerings Legal Structure Investment Advisers Act of 1940, Unit Investment Trust, Grantor Trust, Limited Partnership Expense Expense Ratios, Intrinsic & Extrinsic Costs Trading Liquidity, Volume, Spreads Index Data Components, Weighting scheme, Turnover, Valuations, Volatility, Selection (Computer or Committee), Back tested vs Actual, Performance, Tracking Error Back tested vs Actual is applying a trading system to historical data to verify how a system would have performed. Tracking error is a divergence between the price behavior of a position and the price behavior of its benchmark 11 of 20

12 STRATEGIC APPROACH TO ACTIVE INDEXING 12 of 20

13 PORTFOLIO ADJUSTMENTS The TOPS Portfolio Management Team evaluates 1 3 year prospective views on asset classes before making any changes to target allocations. Potential portfolio adjustments are considered when investment attributes are outside normal ranges (into the top or bottom 20% of historical data). 13 of 20

14 IMPLEMENTING, MONITORING & MANAGEMENT 14 of 20

15 TOPS Portfolios 15 of 20

16 TOPS PORTFOLIO MANAGEMENT TEAM Pioneers in Strategic Exchange Traded Fund (ETF) Portfolios One of the longest running and largest ETF portfolio management programs Est As of May 31, 2015, the TOPS Portfolio Management Team advises over $5.3 billion in ETF assets alone. Privately held firm offering benefits of larger money managers with a critical layer of independence. TOPS Portfolio Management Team Michael McClary, MBA Chief Investment Officer Robert Leggett, CFA Sr. Portfolio Advisor Tyler Denholm, CFA Vice President Investment Management & Research Chad Roope, CFA Vice President Investment Management The team is comprised of distinguished individuals including a number of Chartered Financial Analysts (CFAs), and experienced investment managers. 16 of 20

17 TOPS PORTFOLIOS Model & Allocation (Equity/Fixed Income) Conservative (27/73): Appropriate for investors seeking an investment to provide primarily income, with a focus on long term preservation of capital. Income & Growth (40/60): Appropriate for investors seeking an investment to provide primarily income, with growth of capital and a relatively low level of volatility. Balanced (57/43): Appropriate for investors seeking an investment to provide a total return in the form of growth of capital and income, while maintaining a moderate level of volatility. Moderate Growth (70/30): Appropriate for investors seeking an investment to provide growth of capital, where capital growth takes precedence over the reduction of volatility. Cash Ultra Short Duration Floating Rate Bonds Short Term Corporate Bond Corporate Bond International Bond Short Duration TIPS Short Government Bond Intermediate Government Bond (3-7) Short Duration High Yield High Yield Floating Rate Notes (1-3) Emerging Market Debt Large Cap Value Large Cap Growth Mid Cap Small Cap International Large / Mid Cap International Small Emerging Equity Natural Resources (Global) Natural Resources Timber International Real Estate Real Estate 17 of 20

18 TOPS PORTFOLIOS Model & Allocation (Equity/Fixed Income) Growth (85/15): Appropriate for investors seeking an investment to provide growth of capital, at a level or risk expected to be lower than that of an investor fully invested in equity-based investment options. The portfolio allocates some investments to bond and money market asset classes in order to diversify the portfolio, provide for liquidity and reduce portfolio volatility. Core Equity (98/2): Appropriate for investors seeking an investment to provide primarily growth of capital through investment exposure to Core Equity asset classes. This portfolio is intended to complement an existing portfolio that is primarily invested in bonds and other conservative investments. This portfolio places greater emphasis on large cap equity investments. Aggressive Growth (98/2): Appropriate for investors seeking an investment to provide primarily growth of capital through investments across multiple equity asset classes. This portfolio is anticipated to be the riskiest available, thus clients invested in this portfolio should expect greater volatility and more aggressive risk/return characteristics. Cash Ultra Short Duration Floating Rate Bonds Short Term Corporate Bond Corporate Bond International Bond Short Duration TIPS Short Government Bond Intermediate Government Bond (3-7) Short Duration High Yield High Yield Floating Rate Notes (1-3) Emerging Market Debt Large Cap Value Large Cap Growth Mid Cap Small Cap International Large / Mid Cap International Small Emerging Equity Natural Resources (Global) Natural Resources Timber International Real Estate Real Estate 18 of 20

19 TOPS Value Proposition TOPS is a program that helps take complexity out of investing in the markets through a disciplined process: TOPS creates globally diversified, risk based allocations based on sound financial principles Diversification, indexing, etc. The ValMark Portfolio Management Team matches purposely selected, tax efficient, transparent, liquid, and low cost ETFs to each model. ValMark s team also stays on top of economic trends, as well as monitors and adjusts each portfolio to provide prudent stewardship of the assets under our care. 19 of 20

20 DISCLOSURES The material contained herein is for informational purposes only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial situation or needs of individual investors. Nor does it constitute an offer or a solicitation of an offer to buy any securities, products or services mentioned. Exchange-traded funds (ETFs) are pooled investment vehicles that seek to provide returns that generally correspond to the return of an index and are subject to risks similar to the securities in the index. There is no assurance that the performance of an index can be fully matched. Indices are unmanaged and cannot be invested directly in. TOPS products are to be sold with the following documents, all of which are available to you at no cost from your financial advisor; Form ADV2A & ADV2B, TOPS Wrap Brochure and underlying ETF prospectuses. Investors are encouraged to read these documents in their entirety prior to investing. All investing involves risk, including the possible loss of principal. Any tax advice contained herein is of a general nature. Further, you should seek specific tax advice from your tax professional before pursuing any idea contemplated herein. ValMark Advisers, Inc. is an SEC Registered Investment Advisor. ValMark Advisers, Inc. is affiliated with ValMark Securities, Inc. a FINRA and SIPC registered broker dealer 20 of 20