Northern Trust FOCUS on the Changing Paradigm of the Wealth Management Business Jana Schreuder President, Personal Financial Services October 3, 2012 2012 Northern Trust Corporation
Mission Statement & Value Proposition Mission Statement Our mission is to exceed our clients expectations and deliver shareholder value by providing advice-driven financial solutions which distinguish Northern Trust as the premier wealth management firm in the U.S. and later the world. Value Proposition We leverage our comprehensive capabilities and expertise to provide clients with custom financial solutions to achieve their unique life goals. Client Centric Expertise and Service Objectivity and Transparency Sharp Business Focus Innovation & Technology 2 2012 FOCUS Executive Leadership Conference
Personal Financial Services in Perspective as of 2Q 2012 The heritage of our business continues to contribute significantly to performance 100% 79 99 83 All Other Northern Trust Best Private Bank in the U.S. (2009 2010-2011) 75% PFS 50% 45 57 Best Trust Company (2012) 25% 29 25 20 0% Revenue Pre-tax Income (1) 9 Loans Deposits AUM AUC FTEs Clients Offices and is well positioned for accelerated, profitable growth Ranked among the Top 10 Wealth Managers (2011) (1) Q2 2012 Total Loans and Leases for Northern Trust 3 2012 FOCUS Executive Leadership Conference
Key Insights Influence Strategic Priorities Prolonged Low Interest Rates Market Uncertainty Regulatory Reform Competitive Landscape Implications Pace and scope of technological innovation has accelerated Primarily U.S. focused business competing with major global players Registered Investment Advisers ( RIAs ) are the fastest growing U.S. competitor segment Pricing does not reflect position as premier wealth management firm Challenges identified for talent acquisition strategy Productivity initiatives required to fund strategic priorities Digital presence is critical component of growth Begin international expansion to capitalize on long term growth potential Increased competition for clients and talent Fee simplification launched to better align with value proposition and investment mix shift Talent acquisition plans refined as component of broader strategic priorities Limited M&A targets Opportunistic approach to M&A, but not critical to execute strategy Pace and scope of change challenges our people to nimbly transform how we grow our business 4 2012 FOCUS Executive Leadership Conference
The Path Forward Sharpening Our Focus Execution of the PFS Strategy will deliver our client value proposition. Accelerate Profitable Growth Align Pricing and Value Optimize Client Segmentation Drive Organizational Efficiency Improve Sales Effectiveness Drive Strategic Competitiveness Enhance Presence Differentiate Capabilities Transform Client Servicing through the expertise of our people 5 2012 FOCUS Executive Leadership Conference
Accelerate Profitable Growth Opportunities to leverage the PFS client service model to fund sustainable, scalable growth Align Pricing & Value Optimize Client Service Models Drive Organizational Efficiency Improve Sales Effectiveness Global Family Offices $200 MM $10 MM $2 MM Select Scalable support of valued relationships Private Client Service delivered by multi-disciplinary teams New Core Wealth Advisory Comprehensive, advicedriven financial solutions through an integrated team of specialists. Asset servicing and investment program solutions for family offices Foundation & Institutional Advisory Investment advisory, asset servicing and administration services for not-for-profits. 6 2012 FOCUS Executive Leadership Conference
Drive Strategic Competitiveness Focused investment in strategic initiatives will enhance our competitive positioning and drive long-term growth Connecting: To: Through: Supported By: Delivered By: Our Clients Differentiated Capabilities Enhanced Presence Transformed Client Servicing Our People Goals Based Investing Life Driven Wealth Management Solutions Talent North America International Digital Marketing One Touch Contemporary Technology Lifestyle Capital Assets Goal Alignment Philanthropy Family 7 2012 FOCUS Executive Leadership Conference
Enterprise Philosophy Driving Performance Working differently so we can continue to invest and accelerate the profitable growth of our business. + + + = Differentiated Client Experience Enhanced Capability Aligned Pricing Optimize Client Service Model Enabled Partner Experience Shareholder Value Measured by Client Satisfaction, Partner Engagement, and ROE 8 2012 FOCUS Executive Leadership Conference
Leadership Right People. Right Place. Right Accountability. Clients & Shareholders Client Service and Business Development Global Family & Private Investment Offices Jeff Kauffman PFS Executive Team Capability Design and Expertise Banking Susan Mallory Execution Enablement and Governance COO-Global Services Marianne Doan East Region Dave Blowers Central Region Mac MacLellan West Region Steve Bell PCS Select Rick Wills Advisory Charlie Mueller Investments Katie Nixon Sales & Marketing Brett Rees & Amy Riggins Client & Partner Experience Scott Dille Chief Financial Officer Jacobo Schatz Chief Risk Officer Jim Monhart Human Resources Manager Amyre Coleman Integration, Decision Clarity & Client Support - PFS President Jana Schreuder 9 2012 FOCUS Executive Leadership Conference
Social Innovation Human Connections. Valued Experience. What our clients want What our partners need 10 2012 FOCUS Executive Leadership Conference
Life Driven Approach to Wealth Management Proactive, expert advice supported by an array of comprehensive wealth management capabilities focused on understanding and achieving life goals. Delivered by enabled partners Resulting in value for clients and shareholders 11 2012 FOCUS Executive Leadership Conference
Important Information Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. The Northern Trust Company, London Branch (reg. no. BR001960), Northern Trust Global Investments Limited (reg. no. 03929218) and Northern Trust Global Services Limited (reg. no. 04795756) are authorised and regulated by the Financial Services Authority. The material within and any linked material accessed via this communication is directed to eligible counterparties and professional clients only and should not be distributed to or relied upon by retail investors. For Asia Pacific markets, it is directed to institutional investors, expert investors and professional investors only and should not be relied upon by retail investors. Northern Trust (Guernsey) Limited, Northern Trust Fiduciary Services (Guernsey) Limited, and Northern Trust International Fund Administration Services (Guernsey) Limited are licensed by the Guernsey Financial Services Commission. Northern Trust International Fund Administrators (Jersey) Limited and Northern Trust Fiduciary Services (Jersey) Limited are regulated by the Jersey Financial Services Commission. Northern Trust International Fund Administration Services (Ireland) Limited, Northern Trust Securities Services (Ireland) Limited and Northern Trust Fiduciary Services (Ireland) Limited are regulated by the Central Bank of Ireland. Northern Trust Global Services Limited has a Luxembourg Branch, which is authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF). Northern Trust Luxembourg Management Company S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF). Northern Trust Global Investments Limited has a Netherlands branch, which is authorised by the Financial Services Authority and subject to regulation in the Netherlands by the AutoriteitFinanciëleMarkten. Northern Trust Global Services Limited has a Netherlands Branch, which is authorised and regulated in the Netherlands by De Nederlandsche Bank. Northern Trust Global Investments Limited has a Sweden branch, which is authorised by the Financial Services Authority and subject to regulation in Sweden by the Finansinspektionen. Northern Trust Global Services Ltd (UK) Sweden Filial is authorised by the Financial Services Authority and subject to regulation by the Finansinspektionen. Northern Trust Global Services Limited operates in Abu Dhabi as a Representative Office. Our registered office is authorised and regulated by the Central Bank of the United Arab Emirates. The Northern Trust Company operates in Australia as a foreign authorised deposit-taking institution (foreign ADI)and is regulated by the Australian Prudential Regulation Authority. The Northern Trust Company has a branch in China regulated by the China Banking Regulatory Commission. The Northern Trust Company of Hong Kong Limited is regulated by the Hong Kong Securities and Futures Commission. Northern Trust Global Investments Japan, K.K. is regulated by the Japan Financial Services Agency. The Northern Trust Company has a Singapore Branch, which is a foreign wholesale bank regulated by the Monetary Authority of Singapore. The Northern Trust Company operates in Canada as The Northern Trust Company, Canada Branch, which is an authorised foreign bank branch under the Bank Act (Canada). Trustee related services in Canada are provided by the wholly owned subsidiary The Northern Trust Company, Canada, an authorised trust company under the Trust & Loans Companies Act (Canada). Deposits with The Northern Trust Company and its affiliates and subsidiaries are not insured by the Canada Deposit Insurance Corporation. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. For more information about this notice, see http://www.northerntrust.com/circular230. 12 2012 FOCUS Executive Leadership Conference