3 What We Believe. 4 Our Wealth Management Process. 9 Beyond Your Investment Strategy. The Lenox Group at Morgan Stanley

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1 3 What We Believe 4 Our Wealth Management Process 9 Beyond Your Investment Strategy The Lenox Group at Morgan Stanley

2 the lenox group at morgan stanley wealth management Robertson H. Bennett Family Wealth Director Senior Portfolio Manager / main robertson.h.bennett@morganstanley.com Giuseppina Chirico Assistant Vice President Wealth Management Associate / main giuseppina.a.chirico@morganstanley.com Karen Costagliola Registered Client Service Associate / main karen.costagliola@morganstanley.com Frank A. De Flora, CPM Senior Portfolio Manager Certified Portfolio Manager / main frank.a.deflora@morganstanley.com Eugene J. DeSoiza, Jr / main eugene.desoiza@morganstanley.com Philip J. Gullo, CPM Senior Portfolio Management Director Certified Portfolio Manager / main phil.gullo@morganstanley.com Michael Lysenko IV, CFP, CRPS Financial Planning Specialist / main michael.lysenko@morganstanley.com Bill Miller Registered Client Service Associate / main william.f.miller@morganstanley.com Ronald A. Oleet Senior lnvestment Management Consultant Senior Portfolio Manager / main ronald.a.oleet@morganstanley.com Steve Panitch, CRPS / main stephen.a.panitch@morganstanley.com Richard L. Priore, Jr., CFP Financial Planning Specialist / main r.priore.jr@morganstanley.com John Straton / main john.c.straton@morganstanley.com Philip D. Vallone Portfolio Manager / main philip.d.vallone@morganstanley.com R. Spencer Van Pelt, CFA,CFP, CIMA Assistant Vice President Consulting Group Analyst / main r.spencer.vanpelt@morganstanley.com Kimberly Williams Registered Service Associate / main kimberly.a1.williams@morganstanley.com B morgan stanley

3 Helping You Grow, Preserve and Transfer Your Wealth The inescapable complexities of today s global capital markets are at once exciting and daunting. There are broad and sudden price movements, geopolitical uncertainty, and an ever-growing list of new investment options. More and more, investors are turning to professionals to work with in making difficult investment decisions. At the Lenox Group, we understand that many capable wealth managers are competing for your business. We are acutely aware that when you choose a manager, you trust them not only with your assets, but also with your family s and perhaps your business s long-term financial security. Against that backdrop, we are committed to providing the service and resources you need to help achieve your evolving financial objectives. our mission The Lenox Group serves the needs of wealthy individuals and their families, endowments, foundations and closely held businesses. Our recommendations take into account prevailing market, economic and geopolitical conditions, but more importantly, are based strictly on your unique goals, time horizon and tolerance for risk. the lenox group at morgan stanley the lenox group 1

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5 what we believe The Lenox Group was founded and operates on the premise that many clients seek simplicity and wish to pursue their financial aspirations in a consultative manner, but without spending excessive time monitoring and analyzing investment opportunities. We offer these clients investment management and advisory services designed to help them grow and preserve their assets, generate income and, when the time comes, transfer their wealth. the lenox group 3

6 Our Wealth Management Process The Lenox Group works closely with you and, as needed, any of your other trusted advisors attorneys, accountants, insurance specialists, bankers through a straightforward, clearly articulated process. 1 2 assessment strategy Few investors have identical goals. Yours may be a comfortable retirement or maintaining a specific lifestyle after a divorce, providing for an aging parent without depleting an inheritance or arranging for the ongoing care of a child with special needs. Before we issue any recommendations, we take the time to get to know you as an investor and a person. Our conversations will cover a variety of topics, from what you want to accomplish with your wealth to the potential obstacles that may stand in your way. This exercise, the results of which we will revisit and refine as warranted, helps us develop a personalized strategy that most accurately reflects your unique goals, attitude toward investment risk and the amount of time you have to realize your vision. We consider your input along with our immediate and longer-term views of the markets to create a customized plan. We allocate your assets across the entire investable universe, as appropriate, given your investor profile. In formulating your plan, we will help you identify and address issues beyond investing, such as maintaining a business in retirement or transferring wealth as efficiently as possible. In addition to our own insight, we have the ability to employ the extensive resources of Morgan Stanley on your behalf for such specialized needs as trusts, debt management, philanthropic giving and family office services. 4 morgan stanley

7 3 4 implementation communication After presenting and explaining your customized strategy, we work closely with you to bring it to life with maximum efficiency. As warranted, your plan may include traditional and alternative investments, outside investment managers and even noninvestment vehicles like trusts, and insurance products to manage your overall wealth in an integrated, coordinated manner. We believe in an unbiased-advice approach, which means providing you with access to the solutions we believe are most likely to help you reach your objectives regardless of the firm whose name is attached to those products. Ongoing communication is a vital component of our client relationships. We strive to remain aware of your evolving financial needs and help ensure that you are aware of any economic or market changes that might affect your financial plan. This means consistent monitoring of your portfolio to confirm that your assets are appropriately positioned at all times. We also continually assess the performance of any third-party money managers, recommending adjustments if warranted. Rebalancing your portfolio to reflect your original asset allocation targets a function of your financial plan, in general, and your risk tolerance profile, in particular is critical and done as needed (at least annually). the lenox group 5

8 Portfolio Management Strategies Many clients require a more specialized strategy for a portion of their portfolio, such as a senior corporate executive who needs to sell or monetize complex to a retired couple who need income. The Lenox Group s proprietary, portfolio management services 1 are executed by our experienced team of investment professionals backed by the vast global resources of Morgan Stanley. Your portfolio might include one or more of the strategies outlined on page 7, based on your objectives, time horizon and tolerance for risk. The Lenox Group s s are designated as Portfolio Managers and are qualified by the firm to independently manage client assets based on training, experience and commitment to service. On a fully discretionary basis, they identify and construct suitable investment portfolios in accordance with clients needs and objectives. These investment services utilize one of the most customized approaches to portfolio management available in the investment industry today. 1 Portfolio Management is an advisory program in which the client s invests the clients assets on a discretionary basis in a wide range of securities. 6 morgan stanley

9 Exchange Traded Funds * exchange traded funds dividend & growth fixed income your specialized portfolio * Exchange Traded Funds (ETFs) have become increasingly popular in recent years because they trade on an exchange like a stock, but offer the diversification of a mutual fund without the taxable distributions. ETFs are designed to replicate the performance of a specific index or sector with a single trade. The Lenox Group s ETF Portfolio Management Strategies offer diversified portfolios of domestic and international ETFs that track a broad array of equity and fixed-income markets, including strategies that employ call options with the intention of producing income and reducing the portfolio s volatility. Dividend Equity Fixed Income We believe many investors have long looked to dividend-paying stocks as a conservative means of helping to generate income, longterm capital appreciation and a degree of protection against market volatility. The Lenox Group s Dividend Equity Portfolio Management Strategy offers participation in a portfolio of stocks of companies that currently pay dividends and offer the potential to increase those dividends over time. This approach seeks a dividend yield and total return higher than the Standard & Poor s 500 with lower volatility. Investors seeking income and capital preservation can participate in The Lenox Group s diversified portfolios of taxable fixed income or tax-exempt municipal securities. We select bonds with staggered maturities, which are typically held to maturity. This strategy is intended to preserve invested capital and create ongoing current income. For our Municipal Bond Portfolio Management Strategy, both single and multi-state portfolios are available. With targeted credit ratings higher than typical benchmarks, our portfolios are structured to focus on lower potential event risk the risk of loss from a falling bond rating due to an unforeseen corporate event, such as the restructuring of debt while seeking favorable market opportunities. the lenox group 7

10 The Consulting Group Advantage The Lenox Group also offers access to top-tier, third-party professional investment management organizations through Consulting Group, a division of Morgan Stanley that has been an acknowledged industry leader in investment manager research, selection and monitoring for over 30 years. These managers offer participation in a wide variety of investment categories and assume responsibility for all day-to-day investment decisions. Consulting Group analyzes hundreds of investment advisory firms annually and ranks them by a variety of criteria, including: Risk-adjusted performance Style adherence Organizational depth Stability Consulting Group s Investment Advisor Research team reviews nearly 1,400 investment products each quarter, including separately managed account strategies, mutual funds, exchange traded funds and alternative-investment products. 8 morgan stanley

11 Beyond Your Investment Strategy The Lenox Group s key differentiating value is as portfolio managers, assisting clients in the development and execution of customized investment strategies. In addition to our discretionary, fee-based portfolio management services, The Lenox Group also offers professional guidance across the financial spectrum, including: Estate Planning and Trusts We can help you develop a plan designed to ensure your assets will be used as you intend them to be. Through the judicious use of trusts, beneficiary designation and other estate planning strategies, we strive to help you reduce potential tax erosion of the assets you have worked a lifetime to accumulate. Corporate Services With focused experience in qualified retirement plans including IRA Rollovers and 401(k) administration stock options and employee stock purchase and restricted stock plans, we can provide guidance to help you understand and comply with the many regulations involved in these programs. Family Office Services Families with significant wealth have specialized needs. We can address such concerns as maintaining generational unity by focusing on the family mission, governance, conflict management and the structuring of family endowments; efficient philanthropy; and cost-effective liquidity strategies. Access to Cash Management The Lenox Group focuses on both sides of your personal balance sheet. We can assist you in obtaining the financing you need for a variety of purposes through the lending products offered by Morgan Stanley or its affiliate Banks. Managing your day-to-day spending, cash flow, and available funds are key features of your overall financial management strategy. With guidance from your Morgan Stanley Financial Advisor and support from our professional service team, our cash management solutions complement your portfolio management strategy creating a holistic, integrated wealth management approach. the lenox group 9

12 working together Effective client-advisor relationships require trust. The Lenox Group seeks to earn your trust every day. Our core values superior service, responsiveness and developing long-term relationships enable us to custom design quality, globally diversified, multi-asset class portfolios managed by a team of experienced and focused financial professionals. Collectively, we have provided financial advice and wealth management services for an average of over 30 years. We have individual and corporate client assets under management totalling approximately $1.7 billion (as of May 31, 2015). We have extensive experience assisting high net worth clients with concentrated stock strategies, retirement and estate-planning issues, and private money management needs. We will work with your other trusted advisors, including attorneys, accountants and insurance professionals. We advise affluent families, corporate executives and successful business owners who value the comprehensive planning approach we bring to the relationship. We look forward to working with you. 10 morgan stanley

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14 Morgan Stanley Morgan Stanley follows a simple rule: Do what is right for each client. The firm s commitment to unbiased-advice frees s to recommend any world-class products and services that best suit a client s situation and goals. Both individual and business clients benefit from the same global access and innovation the firm provides to corporations, governments and institutional investors. The firm continually leverages its intellectual capital and global reach to create and deliver targeted solutions for high net worth investors just like you. Whether you seek straightforward financial strategies or the most sophisticated investments or advice, Morgan Stanley provides access to some of the industry s most highly regarded resources, including: One of the industry s premier managed money platforms One of Wall Street s most highly respected research departments The thinking of the firm s Global Investment Committee Extensive capital markets capabilities 12 morgan stanley

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16 This material is intended only for clients and prospective clients of the Portfolio Management program. It has been prepared solely for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. The individuals mentioned as the Portfolio Management Team are Financial Advisors with Morgan Stanley participating in the Morgan Stanley Portfolio Management program. The Portfolio Management program is an investment advisory program in which the client s invests the client s assets on a discretionary basis in a range of securities. The Portfolio Management program is described in the applicable Morgan Stanley ADV Part 2, available at or from your. Past performance of any security is not a guarantee of future performance. There is no guarantee that this investment strategy will work under all market conditions. 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These risks are magnified in countries with emerging markets, since these countries may have relatively unstable governments and less established markets and economics. (For specifics and a greater explanation of possible risks with ETFs, please consult a copy of the prospectus.) Investing in sectors may be more volatile than diversifying across many industries. The investment return and principal value of ETF investments will fluctuate, so an investor s ETF shares (creation units), if or when sold, may be worth more or less than the original cost. The indexes are unmanaged. An investor cannot invest directly in an index. ETFs are redeemable only in Creation Unit size through an Authorized Participant and are not individually redeemable from a Fund. International investing may not be suitable for every investor and is subject to additional risks, including currency fluctuations, political factors, withholding, lack of liquidity, the absence of adequate financial information, and exchange control restrictions impacting foreign issuers. These risks may be magnified in emerging markets. Life insurance, disability income insurance, and long-term care insurance are offered through Morgan Stanley Smith Barney s licensed insurance agency affiliates. This material is intended for use only in Morgan Stanley Smith Barney s Advisory Program. Asset Allocation and diversification do not assure a profit or protect against loss in declining financial markets. Investments and services offered through Morgan Stanley Smith Barney LLC. Member SIPC. The investments listed may not be suitable for all investors. Morgan Stanley Smith Barney LLC recommends that investors independently evaluate particular investments, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment will depend upon an investor s individual circumstances and objectives. Interest in municipal bonds is generally exempt from federal income tax. However, some bonds may be subject to the alternative minimum tax (AMT). Typically, state tax-exemption applies if securities are issued within one s state of residence and local tax-exemption typically applies if securities are issued within one s city of residence. Bonds are affected by a number of risks, including fluctuations in interest rates, credit risk and prepayment risk. In general, as prevailing interest rates rise, fixed income securities prices will fall. Bonds face credit risk if a decline in an issuer s credit rating, or creditworthiness, causes a bond s price to decline. Finally, bonds can be subject to prepayment risk. When interest rates fall, an issuer may choose to borrow money at a lower interest rate, while paying off its previously issued bonds. As a consequence, underlying bonds will lose the interest payments from the investment and will be forced to reinvest in a market where prevailing interest rates are lower than when the initial investment was made. note: High yield bonds are subject to additional risks such as increased risk of default and greater volatility because of the lower credit quality of the issues. Borrowing against securities may not be suitable for everyone. If the value of the securities should decline below a minimum level, you may be subject to a collateral call without specific advance notice, requiring you to deposit additional cash or securities. If you cannot do so, all or a portion of your collateral could be liquidated, and a potentially taxable event could result. You are not entitled to choose which securities are sold or any extension of time to meet a collateral call. A concentrated portfolio holding a single or a few securities may be subject to greater risk of a collateral call than a diversified portfolio; a diversified portfolio will tend to be less subject to a sharp decline resulting from the negative performance of a single security. Availability, qualifications, and other restrictions may vary by state. Ask your for details. Robertson Bennett (1990), Frank De Flora (1983), Eugene DeSoiza, Jr. (1985), Phil Gullo (1980), Michael Lysenko (2009), Ronald Oleet (1977), Steve Panitch (1995), Richard Priore, Jr. (1987), John Straton (1954), Phil Vallone (1982). Trust and other fiduciary services are provided by third parties, including Morgan Stanley Trust National Association, a wholly-owned subsidiary of Morgan Stanley. Consulting Group and Investment Advisory Services are divisions of Morgan Stanley Smith Barney LLC. 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