A Year of Change, a A Year of Change, a Return to APIC’s Return to APIC’s

Roots!Roots!

Annual Membership Meeting Annual Membership Meeting Association of Professional Investment Association of Professional Investment

ConsultantsConsultantsJune 9, 2005June 9, 2005

Association of Professional Investment Consultants (APIC) Organizational Chart 2005-2006

APIC Membership

> $5 Million

Steve Thacker

Scott Wilson

< $5 Million

Susan Yelen

Private Wealth

Management

APIC Board of Directors

Secretary/Treas

Douglas Berger

Advisory Group

Jim Pupillo

Chris Aitken

Association

Staff

Committees and Chairperson (s)

Research

& Evaluation

Kent Cox

Conference Oversight

Elaina Spilove

Technology

Jon Webster

Legal and Regulatory

John Collier

Membership

Jim Gill

Corporate Services

Brian Penzel

Committee Board Liaisons

George DunnElaina SpiloveBrian HeinSkip Sussman Susan Yelen

Brian Kelly

Bob Scherer

Lori Van Dusen

Scott Thayer

Doug Berger

Endowment/ Foundation

President/

Spokesperson

Chris Aitken

Executive Committee

Pres. Elect/VP

Tim Kneen

Steering

Committee

Jim PupilloExec Director

Eric Scharf

Mark Curtis

Governance

Paul Compton

Agenda Planning 2006

Gregg Paulson

Jeff Wigbells

Logistics Planning 2006

Elaina Spilove

Nominating

Tim Kneen

Professional Development

Janet Bolton

Oracle

Bill Teeple

Barbara Griffin

Updated

June 9,2005

Past President

Jim Pupillo

Endowment/ Foundation

< $25 Million

Doug Berger

Endowment/ Foundation

>$25 Million

Lori Van Dusen

Scott Thayer

Website/ Street Smarts

Tom Davis

Al Eaton

Finance Comm.

Douglas BergerBest Practices

Tim Kneen

Phil Shaffer

President George Bush once said “Great Leaders are defined by those people around them..”

Janet Bolton Mike Engel

Welcome Newly Elected Board Welcome Newly Elected Board MembersMembers

Three-year termsThree-year termsJanet Bolton, Chicago, IL

Steve Thacker, Baltimore, MD

Mike Engel, Washington, D.C.

Phil Shaffer, Columbus, OH

Special Thanks to Outgoing Board Special Thanks to Outgoing Board MembersMembers

Sandee Smith, Kansas City, MO

Mike Melko, Chicago, IL

Appointed one-year term Appointed one-year term

Skip SussmanSkip Sussman, San Rafael, CA, San Rafael, CA

Honoring our Charter Honoring our Charter MembersMembers

Chris AitkenChris Aitken Bill AnkenyBill Ankeny Dan BiedermanDan Biederman Ed ClissoldEd Clissold Rusty CooerRusty Cooer Mark CurtisMark Curtis George DunnGeorge Dunn Larry EckstromLarry Eckstrom Barry Giller Barry Giller Rich GleasonRich Gleason Austin HebergerAustin Heberger Kathleen HegenbartKathleen Hegenbart Mary Lynne HickeyMary Lynne Hickey Laree HulsoffLaree Hulsoff

Steve JacksonSteve Jackson Brian Kelly, Sr.Brian Kelly, Sr. Ted LucienTed Lucien Chris PochChris Poch Dan RolanDan Rolan Mike SasserMike Sasser Robert SchererRobert Scherer John ScottJohn Scott Sandee SmithSandee Smith Gene TrudeenGene Trudeen Jeff WigbelsJeff Wigbels Howard ZumstegHoward Zumsteg

A Year in ReviewA Year in Review Rewrote APIC’s Mission Statement and Rewrote APIC’s Mission Statement and

five-year Strategic Plan including new five-year Strategic Plan including new membership criteriamembership criteria

Made structural changes to the conferenceMade structural changes to the conference

Dramatically reduced APIC’s expensesDramatically reduced APIC’s expenses

Created new committeesCreated new committees

Partnered with the Firm on new initiativesPartnered with the Firm on new initiatives

Developed Professional Standards GuideDeveloped Professional Standards Guide

Accomplishments in 2004 - Accomplishments in 2004 - 20052005

Governance CommitteeGovernance Committee Facilitated the 5 year strategic planning effort including Facilitated the 5 year strategic planning effort including

new membership standards. new membership standards. Developed Board Orientation Program Developed Board Orientation Program Continued improvements to the Board Operating ManualContinued improvements to the Board Operating Manual

Finance CommitteeFinance Committee Established a Finance/Audit Committee:  Doug Berger, Established a Finance/Audit Committee:  Doug Berger,

Bob Scherer, Paul Compton & George Dunn Bob Scherer, Paul Compton & George Dunn Developing a records retention and emergency back Developing a records retention and emergency back

up/recovery procedure.up/recovery procedure. Produced a new APIC budget for the recently adopted Produced a new APIC budget for the recently adopted

policy that avoids potential conflicts of interestpolicy that avoids potential conflicts of interest

Conference Oversight CommitteeConference Oversight Committee Planned the 2005 Annual Educational Conference in Naples, FL on June 9 Planned the 2005 Annual Educational Conference in Naples, FL on June 9

– 10, 2005 with an attendance of more than 230 members present. .– 10, 2005 with an attendance of more than 230 members present. . Reoriented the conference away from an event supported by and Reoriented the conference away from an event supported by and

involving the providers of money management services to a self-involving the providers of money management services to a self-supporting program paid for directly by the membershipsupporting program paid for directly by the membership

Initiated planning for the 2006 conference, Initiated planning for the 2006 conference,

Legal/Regulatory CommitteeLegal/Regulatory Committee FC Team Agreement FC Team Agreement Franchise Protection Plan (FPP) Franchise Protection Plan (FPP) Staff Compensation Staff Compensation Outside software programs Outside software programs Personal Computers: NNPC (Non-Networked Personal Computers) Personal Computers: NNPC (Non-Networked Personal Computers)

PWM < $5 Million CommitteePWM < $5 Million Committee Integrated Wealth Management. 33% Done, 3 out of 9 items completedIntegrated Wealth Management. 33% Done, 3 out of 9 items completed Inconsistencies in Tax Reporting Done, 9 out of 12 items completedInconsistencies in Tax Reporting Done, 9 out of 12 items completed Friction List from 2004. 28% Done, 21out of 75 items completedFriction List from 2004. 28% Done, 21out of 75 items completed

Accomplishments in 2004 - 2005Accomplishments in 2004 - 2005

Steering CommitteeSteering Committee Worked with the Governance Committee to complete the Worked with the Governance Committee to complete the

development of the Strategic Plan development of the Strategic Plan Continued development of the Industry Professional Standards Continued development of the Industry Professional Standards

project which has included:project which has included: a. Fine tuning and dissemination of the Code of Ethicsa. Fine tuning and dissemination of the Code of Ethics b. Finalization of the Professional Standards Guide which will b. Finalization of the Professional Standards Guide which will

be ready for release at the Annual Conference. be ready for release at the Annual Conference. Oversaw the development of the Industry Advisory Council (IAC)Oversaw the development of the Industry Advisory Council (IAC)

Research/Evaluation CommitteeResearch/Evaluation Committee 50 additional managers covered in CES year to date along with 50 additional managers covered in CES year to date along with

several level commitments.several level commitments. An improved salary and bonus structure was put in place which has An improved salary and bonus structure was put in place which has

improved morale and reduced turnover in the research department. improved morale and reduced turnover in the research department. Consideration is being given to a second tier of investment managers Consideration is being given to a second tier of investment managers

who will work for a fee level between FS and their current fee with who will work for a fee level between FS and their current fee with lower minimums. This would improve our access to high quality lower minimums. This would improve our access to high quality managers. managers.

Accomplishments in 2004 - Accomplishments in 2004 - 20052005

Foundation/Endowment < $25 Million CommitteeFoundation/Endowment < $25 Million Committee Developed Initial Committee Responses,Developed Initial Committee Responses, Developed Priorities for this committee to pursue Developed Priorities for this committee to pursue

a.  Support CG in developing marketing materials  for this market a.  Support CG in developing marketing materials  for this market b.  Support development of better RFP Response Capabilities  ( Will assist CG in b.  Support development of better RFP Response Capabilities  ( Will assist CG in

populating it's new software "The RFP Machine") populating it's new software "The RFP Machine") c.  Support development of Finals Presentation Resources   c.  Support development of Finals Presentation Resources   d.  Focus on Marketing Opportunities - Philanthropic Services - Rockefeller d.  Focus on Marketing Opportunities - Philanthropic Services - Rockefeller

Philanthropic Advisors      Philanthropic Advisors     

Industry Advisory CouncilIndustry Advisory Council Building a Culture that embraces Ethics and Professional Standards Building a Culture that embraces Ethics and Professional Standards Portfolio ConstructionPortfolio Construction Behavioral Finance ResearchBehavioral Finance Research

Member Internet Services CommitteeMember Internet Services Committee Worked with StreetSmarts technology provider, Involve Technology, to enhance its Worked with StreetSmarts technology provider, Involve Technology, to enhance its

member communication tool with improved features and usability. These include: member communication tool with improved features and usability. These include: Reworked the categories in the Website Members Exchange to conform with Reworked the categories in the Website Members Exchange to conform with

StreetSmarts and then placed all of the current items into the categories with StreetSmarts and then placed all of the current items into the categories with descriptive information.descriptive information.

Reworked the committee report module to make it easier to post reportsReworked the committee report module to make it easier to post reports..

Accomplishments in 2004 - Accomplishments in 2004 - 20052005

Accomplishments in 2004 - Accomplishments in 2004 - 20052005

Membership CommitteeMembership Committee Performed and reported major study of membership Performed and reported major study of membership

compositioncomposition Researched and recommended new Qualifications for Researched and recommended new Qualifications for

MembershipMembership Created presentation/assisted with Board Membership Created presentation/assisted with Board Membership

campaign campaign Since July 2004, responded to 123 applications of which 91 Since July 2004, responded to 123 applications of which 91

were recommended for approval by the Board. APIC were recommended for approval by the Board. APIC began the year with 372 Voting members and 168 Non-began the year with 372 Voting members and 168 Non-Voting members; as of May 30, 2005 there were 223 Voting members; as of May 30, 2005 there were 223 Voting members and 108 Non-Voting members. Voting members and 108 Non-Voting members.

Worked with the Internet Members Services Committee to Worked with the Internet Members Services Committee to implement further upgrades to Online Application Process implement further upgrades to Online Application Process and continued the process of improving and simplifying and continued the process of improving and simplifying the Online Application Processthe Online Application Process

New Mission and Five-Year New Mission and Five-Year PlanPlan

“A Community of Colleagues Fostering Professionalism

Through a Culture of Consulting”

APIC Membership APIC Membership Requirements Requirements Effective January 1, 2005Effective January 1, 2005

In order to qualify for voting membership, a member In order to qualify for voting membership, a member must have one of the following credentials:must have one of the following credentials:

Senior Institutional Consultant (SIC)Senior Institutional Consultant (SIC) Chartered Financial Analyst (CFA) – 06/2005Chartered Financial Analyst (CFA) – 06/2005 Certified Investment Management Analyst (CIMA)Certified Investment Management Analyst (CIMA) Private Wealth Management Advisor (PWMA)Private Wealth Management Advisor (PWMA) Corporate Client Group Director (CCG Dir.)Corporate Client Group Director (CCG Dir.) Senior Investment Management Consultant (SIMC)Senior Investment Management Consultant (SIMC)

Individuals who were voting members prior to January Individuals who were voting members prior to January 1, 2005, and do not possess any of these credentials 1, 2005, and do not possess any of these credentials will have two years from 1/1/05 to obtain one of the will have two years from 1/1/05 to obtain one of the listed credentials OR, members will be grandfathered listed credentials OR, members will be grandfathered if they have been members in good standing for at if they have been members in good standing for at least five years as of 1/1/05.least five years as of 1/1/05.

Structural Changes to the Structural Changes to the ConferenceConference

Avoid all perception of conflicts of Avoid all perception of conflicts of interestinterest

APIC no longer accepts investment APIC no longer accepts investment advisor sponsorships for any functionsadvisor sponsorships for any functions

Return APIC to its roots, when the Return APIC to its roots, when the conference was educationally focused conference was educationally focused featuring FC’s exchanging ideas and featuring FC’s exchanging ideas and networkingnetworking

APIC members will be the beneficiaries APIC members will be the beneficiaries of “Returning to Our Roots” and to of “Returning to Our Roots” and to

spending more time sharing ideas with spending more time sharing ideas with our friends and fellow practitionersour friends and fellow practitioners

Budgetary ChangesBudgetary Changes Conference last year netted a surplus for APIC. Conference last year netted a surplus for APIC.

With that reserve we were able to make needed With that reserve we were able to make needed changeschanges

We cut over $150k from the budget including over We cut over $150k from the budget including over $75k from conference planning, over $10k from $75k from conference planning, over $10k from meetings, $21k from printing, $15,000 by having meetings, $21k from printing, $15,000 by having the firm absorb the cost of FundFire and $8k from the firm absorb the cost of FundFire and $8k from credit card feescredit card fees

Today we are a leaner organization, completely Today we are a leaner organization, completely focused on providing value to our colleagues: focused on providing value to our colleagues:

You the APIC memberYou the APIC member

New Committees = New Problem New Committees = New Problem SolvingSolving

Best Practices Committee is generating great ideas that are Best Practices Committee is generating great ideas that are shared with the entire membershipshared with the entire membership• George Dunn’s ideas on allocating to commoditiesGeorge Dunn’s ideas on allocating to commodities• Scott Thayer’s finals presentations, etc.Scott Thayer’s finals presentations, etc.

Professional Development CommitteeProfessional Development Committee• Committed to raising the knowledge level and differentiating Committed to raising the knowledge level and differentiating

our practicesour practices• The Mitch Anthony Program that was conducted todayThe Mitch Anthony Program that was conducted today

New management structure at APIC – Exec team will stay New management structure at APIC – Exec team will stay for another year to provide continuity during this current for another year to provide continuity during this current transition period transition period • Chris Aitken, PresidentChris Aitken, President• Tim Kneen, President-Elect, June 2006Tim Kneen, President-Elect, June 2006• Jim Pupillo, Past President 2004Jim Pupillo, Past President 2004• Doug Berger, Secretary and TreasurerDoug Berger, Secretary and Treasurer• Elaina Spilove, Conference OversightElaina Spilove, Conference Oversight

Partnering with The FirmPartnering with The Firm

FundFire cost savingsFundFire cost savings

Board meetings held at CG Board meetings held at CG and other firm events to and other firm events to create cost sharingcreate cost sharing

Top priorities listTop priorities list

Conference planningConference planning

2005 - 2006 Top Priorities of 2005 - 2006 Top Priorities of APICAPIC

Create and/or buy Performance Reporting that is accurate and Create and/or buy Performance Reporting that is accurate and “the standard of the industry”.“the standard of the industry”.

ResearchResearch• Change structure and expand research capabilities Change structure and expand research capabilities • Focus on adding managers that add Alpha Focus on adding managers that add Alpha • Collaborate with 18 manager analysts in Private BankCollaborate with 18 manager analysts in Private Bank• Expand asset classes to include more alternatives Expand asset classes to include more alternatives

Umbrella Pricing Umbrella Pricing • Expand Advisor to include all products and asset classesExpand Advisor to include all products and asset classes

Friction ItemsFriction Items• Tax Recordkeeping and Reporting Tax Recordkeeping and Reporting • Questionnaires Questionnaires

Qualitative and Quantitative Client Discovery Process Qualitative and Quantitative Client Discovery Process Improved Risk Questionnaires integrating behavioral financeImproved Risk Questionnaires integrating behavioral finance

• Comprehensive Fee Calculator with transparency including all Comprehensive Fee Calculator with transparency including all discretionary and non discretionary fee based solutionsdiscretionary and non discretionary fee based solutions

Industry Custodial ReportingIndustry Custodial Reporting• Deliver a workable strategy Deliver a workable strategy

Looking Forward – Our Looking Forward – Our ChallengesChallenges

APIC is only as good as APIC is only as good as howhow involved its members are. involved its members are. We need to find ways to engage each of We need to find ways to engage each of youyou!!

Your Board of Directors has Committed to:Your Board of Directors has Committed to:

Run a financially tight ship with the elimination of Run a financially tight ship with the elimination of investment advisor sponsorshipsinvestment advisor sponsorships

Better communicate to the membership more of what each Better communicate to the membership more of what each committee is doing and what APIC is accomplishingcommittee is doing and what APIC is accomplishing

Encourage a free flow of idea sharing using cutting edge Encourage a free flow of idea sharing using cutting edge technology that addresses the usability issues with the old technology that addresses the usability issues with the old Chalkboard list serve and current StreetSmarts system. Chalkboard list serve and current StreetSmarts system.

Continue to attract the best practitioners to APICContinue to attract the best practitioners to APIC

Looking Forward – Our Looking Forward – Our ChallengesChallenges

Continue to push the firm to provide us with Continue to push the firm to provide us with the latest in technology at the branch and for the latest in technology at the branch and for the mobile consultantthe mobile consultant

Continue to push the firm on our highest Continue to push the firm on our highest priorities and items that enhance best priorities and items that enhance best practices like team trainingpractices like team training

Continue to push the firm to be leaders in the Continue to push the firm to be leaders in the investment management consulting industry investment management consulting industry and not be satisfied with past successand not be satisfied with past success

Insist that the Firm execute on what they Insist that the Firm execute on what they promise us they will dopromise us they will do

Paul ComptonPaul ComptonChair, APIC Governance CommitteeChair, APIC Governance Committee

Board Liaison, Membership CommitteeBoard Liaison, Membership Committee

Led the APIC Board of Directors Led the APIC Board of Directors through the Strategic Planning through the Strategic Planning

Process and implementation of its Process and implementation of its key elements key elements

that will bring APIC that will bring APIC ““Back to the Future”Back to the Future”

Association of Association of Professional Professional Investment Investment ConsultantsConsultants

A community of colleaguesA community of colleagues

fostering professionalismfostering professionalism

through a culture of through a culture of consultingconsulting

StructureStructure Professional AssociationProfessional Association

• Bylaws, Policy and Governance, Bylaws, Policy and Governance, ProceduresProcedures

Professional Expectations of membersProfessional Expectations of members• Qualifications – Skill-setQualifications – Skill-set

Committees of members – principal Committees of members – principal activityactivity• Standing CommitteesStanding Committees• Functional CommitteesFunctional Committees

Annual Educational ConferenceAnnual Educational Conference

VisionVision In a dynamic world, our clients, our firm and our industry In a dynamic world, our clients, our firm and our industry

need professional financial consultants who respond to need professional financial consultants who respond to their needs with customized comprehensive solutions.their needs with customized comprehensive solutions.

Our association supports an atmosphere of intellectual Our association supports an atmosphere of intellectual accomplishment and encourages reciprocal exchange of accomplishment and encourages reciprocal exchange of ideas. ideas.

Our passion for perfection enhances the financial Our passion for perfection enhances the financial consultant’s effectiveness and the quality of the client’s consultant’s effectiveness and the quality of the client’s experience. experience.

APIC is the communication link between unified financial APIC is the communication link between unified financial consultants and Smith Barney’s senior management. consultants and Smith Barney’s senior management.

MissionMission APIC APIC

• advocatesadvocates for our standards and for our for our standards and for our members’ needs; members’ needs;

• innovatesinnovates to provide creative solutions to to provide creative solutions to client problems; client problems;

• educateseducates to raise the skill of its members to raise the skill of its members and and

• communicatescommunicates to support free to support free interchange of our best practices, ideas interchange of our best practices, ideas and information, and to build the collective and information, and to build the collective wisdom of our members and our wisdom of our members and our association.association.

Core ValuesCore Values Client-Centered business practicesClient-Centered business practices Highest ethical standardsHighest ethical standards Collaborative, professional Collaborative, professional colleaguescolleagues

• academically inquisitive thinkers who share our academically inquisitive thinkers who share our intellectual capitalintellectual capital

State-of-the-art solutionsState-of-the-art solutions• for our clients and our consulting practicesfor our clients and our consulting practices

AdvocateAdvocate• dedicated to being a positive influence within our dedicated to being a positive influence within our

firmfirm • a unified voice representing the business needs of a unified voice representing the business needs of

the membershipthe membership

Education & Professional Education & Professional DevelopmentDevelopment

Best Content Systems for DevelopmentBest Content Systems for Development• Best Practices CommitteeBest Practices Committee

Innovative Educational ContentInnovative Educational Content Educational ConferencesEducational Conferences

• Members PracticesMembers Practices• Outside Industry LeadersOutside Industry Leaders

Align Educational Content with CG Align Educational Content with CG TrackTrack• FC’s prepared to qualifyFC’s prepared to qualify

Professional Development CommitteeProfessional Development Committee Electronic CommunicationElectronic Communication

AdvocacyAdvocacy

StakeholdersStakeholders Inform the FirmInform the Firm

• Profitable use of Firm capitalProfitable use of Firm capital A willing, qualified membershipA willing, qualified membership Support Program-oriented CommitteesSupport Program-oriented Committees Industry Advisory CouncilIndustry Advisory Council

• Behavioral FinanceBehavioral Finance• Portfolio ConstructionPortfolio Construction• Professional Standards GuideProfessional Standards Guide

CommunicationCommunication

Unified communication strategyUnified communication strategy•Oracle upgrade / APIC JournalOracle upgrade / APIC Journal•Website upgrade pathWebsite upgrade path•Media relationsMedia relations

APIC archives – publish historyAPIC archives – publish history•Annually itemize Annually itemize

accomplishmentsaccomplishments

InnovationInnovation

Drive change by teaching Drive change by teaching innovationsinnovations•Ongoing member Ongoing member prospectingprospecting

•Conference contentConference content•Industry Advisory CouncilIndustry Advisory Council

Member ExpectationsMember Expectations

Share the VisionShare the Vision Professional StandardsProfessional Standards Ethical PracticesEthical Practices LeadershipLeadership Committee ServiceCommittee Service

• ChallengeChallenge• Natural talent + willing to learnNatural talent + willing to learn

Association of Association of Professional Professional Investment Investment ConsultantsConsultants

A community of A community of colleaguescolleagues

fostering fostering professionalismprofessionalism

through a culture of through a culture of consultingconsulting

Jim PupilloJim PupilloImmediate Past PresidentImmediate Past PresidentChair, Steering CommitteeChair, Steering Committee

Chair, Industry Advisory CouncilChair, Industry Advisory Council

Guided APIC’s Initiatives in Two Key Guided APIC’s Initiatives in Two Key ProgramsPrograms

Professional StandardsProfessional StandardsMaximizing APIC’s Industry Maximizing APIC’s Industry

RelationshipsRelationships

Focus on Standards and Focus on Standards and InnovationInnovation

Creating resources for building a Creating resources for building a culture that values high culture that values high professional standardsprofessional standards

Tapping into the best of the Tapping into the best of the investment management investment management consultant industry to create consultant industry to create innovation and new directions for innovation and new directions for the practitionerthe practitioner

Professional Standards Professional Standards ProjectProject

Initiated by former President Jim Initiated by former President Jim Stoker with the guidance of the Stoker with the guidance of the Steering CommitteeSteering Committee

Assisted by the resources of Don Assisted by the resources of Don Trone and the Foundation for Trone and the Foundation for Fiduciary StudiesFiduciary Studies

Partnership with the Partnership with the Foundation for Fiduciary Foundation for Fiduciary

StudiesStudiesDistribution partners Distribution partners

with the Foundation with the Foundation of their publication of their publication –“Prudent –“Prudent Investment Investment Practices Practices Handbook” Handbook”

APIC members APIC members receive a special receive a special discounted price.discounted price.

APIC Code of EthicsAPIC Code of Ethics

In 2004 the Board of Directors In 2004 the Board of Directors approved an APIC member Code approved an APIC member Code of Ethicsof Ethics

Designed as a membership Designed as a membership guideline, it provides you with a guideline, it provides you with a resource to demonstrate to clients resource to demonstrate to clients how you operate your practice in how you operate your practice in a highly ethical fashiona highly ethical fashion

APIC Code of EthicsAPIC Code of EthicsI recognize that this Code of Ethics, its principles, and I recognize that this Code of Ethics, its principles, and

obligations are in addition to those set forth by any other obligations are in addition to those set forth by any other code which governs my professional and ethical conduct.code which governs my professional and ethical conduct.

To my consulting clients, I willTo my consulting clients, I will Act with honesty and integrity, and seek to avoid conflicts of Act with honesty and integrity, and seek to avoid conflicts of

interest, real or perceived. interest, real or perceived. Ensure the timely and understandable disclosure of relevant Ensure the timely and understandable disclosure of relevant

information that is accurate, complete, and objective; including information that is accurate, complete, and objective; including any actual or potential conflicts of interest. any actual or potential conflicts of interest.

Be responsible when determining the value of my services and Be responsible when determining the value of my services and my form of compensation, taking into consideration the time, my form of compensation, taking into consideration the time, skill, experience, and special circumstances involved in the skill, experience, and special circumstances involved in the performance of my services.performance of my services.

Know the limits of my expertise, and refer to colleagues and/or Know the limits of my expertise, and refer to colleagues and/or other professionals on issues beyond my knowledge and skill. other professionals on issues beyond my knowledge and skill.

Respect the confidentiality of information acquired in the Respect the confidentiality of information acquired in the course of my work. I will not disclose such information, except course of my work. I will not disclose such information, except when authorized or otherwise legally obligated to do so. I will when authorized or otherwise legally obligated to do so. I will not use confidential information acquired in the course of my not use confidential information acquired in the course of my work for my personal advantage.work for my personal advantage.

APIC Code of EthicsAPIC Code of EthicsTo APIC, I willTo APIC, I will

Proactively promote and be an example of ethical behavior as a Proactively promote and be an example of ethical behavior as a responsible partner among peers, in the work environment, and responsible partner among peers, in the work environment, and the community. the community.

Ensure that my fee structures and the overall promotion of my Ensure that my fee structures and the overall promotion of my practice are implemented in the best interests of the profession.practice are implemented in the best interests of the profession.

Seek, accept, and offer honest criticism of technical work; Seek, accept, and offer honest criticism of technical work; acknowledge and correct errors; and properly credit the acknowledge and correct errors; and properly credit the contributions of others.contributions of others.

Use corporate assets and resources employed or entrusted to Use corporate assets and resources employed or entrusted to me in a responsible manner. me in a responsible manner.

Continue to improve my knowledge and skills, share ideas and Continue to improve my knowledge and skills, share ideas and information with my colleagues, and assist them in their information with my colleagues, and assist them in their professional development. professional development.

Approved by the APIC Board of Directors as a membership Approved by the APIC Board of Directors as a membership guideline on March 1, 2004.guideline on March 1, 2004.

Promoting Professional StandardsPromoting Professional Standards

The The Professional Standards Professional Standards Guide for Investment Guide for Investment Management Management Consultants Consultants is a new tool is a new tool to use in growing your to use in growing your practice. The standards practice. The standards were developed in were developed in conjunction withconjunction with Prudent Prudent Investment PracticesInvestment Practices and and provide a common set of provide a common set of operating standards that operating standards that should be used by all should be used by all professional investment professional investment management management consultants.consultants.

Working with Smith Working with Smith Barney’s legal Barney’s legal compliance team, APIC compliance team, APIC has created a guide that has created a guide that you can use internally you can use internally and as a valuable and as a valuable marketing tool to marketing tool to demonstrate how you demonstrate how you operate your practice.operate your practice.

Eight Standards for Eight Standards for Professional PracticeProfessional Practice

Sample StandardSample Standard

How to Use the Professional How to Use the Professional Standards Guide in Your Standards Guide in Your

PracticePractice

Benchmark how you operate your Benchmark how you operate your practice.practice.

Training of new staff and colleagues Training of new staff and colleagues to practice the “APIC” way.to practice the “APIC” way.

Demonstrate to clients that you work Demonstrate to clients that you work at a high level of professional at a high level of professional standardsstandards

How to Obtain the GuideHow to Obtain the Guide APIC is placing a .pdf copy of the Guide on APIC is placing a .pdf copy of the Guide on

the members only section of the website – the members only section of the website – your’s free to download as a member your’s free to download as a member benefit.benefit.

Attractive color copies will also be available Attractive color copies will also be available to purchase. to purchase. • First 25 copies: First 25 copies: $7.00 each$7.00 each• Next 25 copies: Next 25 copies: $6.00 each$6.00 each• Next 50 copies: Next 50 copies: $5.00 each$5.00 each• Over 100 or more copies: Over 100 or more copies: $4.00 each$4.00 each• We are offering a 25% pre-publication discount We are offering a 25% pre-publication discount

for 1,000 copies ordered. for 1,000 copies ordered.

Creating innovation and new Creating innovation and new directions for the practitionerdirections for the practitioner

Mission of the Industry Advisory Mission of the Industry Advisory Council is two-fold:Council is two-fold:• Industry Communication Bridge – Industry Communication Bridge –

Function as a communication link with Function as a communication link with key industry leaders to stay abreast of key industry leaders to stay abreast of cutting edge technological innovations cutting edge technological innovations and other developments.and other developments.

• Industry Think Tank – Function as an Industry Think Tank – Function as an exploratory investment consulting exploratory investment consulting research and developmental think-tank.research and developmental think-tank.

Industry LeadershipIndustry Leadership

The IAC consists of such key leaders The IAC consists of such key leaders as:as:• Frank SortinoFrank Sortino • Bob SeabergBob Seaberg• Donald TroneDonald Trone• Bob PadgetteBob Padgette• Ron SurzRon Surz

APIC leadership is actively involved APIC leadership is actively involved in leading this effort.in leading this effort.

Projects that the IAC is Projects that the IAC is Focused OnFocused On

Building a Culture that embraces Ethics and StandardsBuilding a Culture that embraces Ethics and Standards • Implementing a Code of Ethics for APIC MembersImplementing a Code of Ethics for APIC Members• Developed the APIC Standards of PracticeDeveloped the APIC Standards of Practice• Collaborating with the Foundation for Fiduciary Studies to Collaborating with the Foundation for Fiduciary Studies to

foster a culture that values ethical behavior within a foster a culture that values ethical behavior within a standard set of practicesstandard set of practices

Portfolio ConstructionPortfolio Construction• Blending Active/Passive Investment StrategiesBlending Active/Passive Investment Strategies • Alpha Through Enhanced Asset AllocationAlpha Through Enhanced Asset Allocation • Research of Minimum Acceptable Returns (MAR)Research of Minimum Acceptable Returns (MAR)

Behavioral Finance ResearchBehavioral Finance Research• Obtain Better Understanding of Behavioral FinanceObtain Better Understanding of Behavioral Finance• Provide Informational Resources for Financial ConsultantsProvide Informational Resources for Financial Consultants

In Closing – Two Thank In Closing – Two Thank You’sYou’s

First – To the conference committeeFirst – To the conference committee

No committee has ever faced bigger challenges! Please No committee has ever faced bigger challenges! Please give them give them constructiveconstructive ideas and more importantly, ideas and more importantly, Thank them – Elaina Spilove, Steve Thacker and Mike Thank them – Elaina Spilove, Steve Thacker and Mike EngelEngel

Second – The APIC Board and Committee ChairsSecond – The APIC Board and Committee Chairs• If you would all stand - Thank YOUIf you would all stand - Thank YOU

• You do the day-to-day work of APIC!You do the day-to-day work of APIC!

Finally, in closing, I would like to read you an Finally, in closing, I would like to read you an email exchange between my Vice President and email exchange between my Vice President and one of our members. It speaks to who we have one of our members. It speaks to who we have always been!always been!

First, thanks for your comments. We can only serve better by First, thanks for your comments. We can only serve better by listening. Second, I couldn't agree with you more about listening. Second, I couldn't agree with you more about getting Value. If APIC is not providing value to you and your getting Value. If APIC is not providing value to you and your practice then you should leave and find it elsewhere. practice then you should leave and find it elsewhere. However, let me share a few thoughts about how APIC is However, let me share a few thoughts about how APIC is providing value in my life and practice and see what you think providing value in my life and practice and see what you think in the end:in the end:

1) When I first joined APIC I was a pretty good producer (1st 1) When I first joined APIC I was a pretty good producer (1st quintile type) and I did OK bringing in new clients and I did quintile type) and I did OK bringing in new clients and I did pretty good managing my clients assets. I attended my first pretty good managing my clients assets. I attended my first conference and was struck with the awesome reality that conference and was struck with the awesome reality that what I thought was pretty good was in fact pretty average. what I thought was pretty good was in fact pretty average. The best practitioners were using cutting edge ideas that I The best practitioners were using cutting edge ideas that I had not even thought of. The best practitioners were thinking had not even thought of. The best practitioners were thinking about asset allocation problems that were coming, not here about asset allocation problems that were coming, not here yet, but just around the corner. The best were not simply yet, but just around the corner. The best were not simply satisfied with being pretty good at manager selection they satisfied with being pretty good at manager selection they demanded and had a plan to b better. Let me give you some demanded and had a plan to b better. Let me give you some examples:examples:

• The best practitioners were thinking about alternative The best practitioners were thinking about alternative asset classes 10 years ago, sourcing out hedge funds and asset classes 10 years ago, sourcing out hedge funds and other opportunities so that when the difficult markets other opportunities so that when the difficult markets came their clients were prepared. They were there came their clients were prepared. They were there teaching me what these asset classes could do to risk and teaching me what these asset classes could do to risk and return so I would have my clients prepared. return so I would have my clients prepared.

• The best practitioners were thinking 10 years ago about the brick The best practitioners were thinking 10 years ago about the brick wall that most FC's hit where there are just not enough hours in the wall that most FC's hit where there are just not enough hours in the day to do any more bizz and taught me how to leverage my time day to do any more bizz and taught me how to leverage my time through the building of a high performance team. through the building of a high performance team.

• The best practitioners were there years ago when they saw that our The best practitioners were there years ago when they saw that our reporting systems were not adequate to serve our market and lead reporting systems were not adequate to serve our market and lead the way in helping design Orion and other reporting tools..yes that the way in helping design Orion and other reporting tools..yes that was an APIC project. was an APIC project.

• The best practitioners were there years ago when research was The best practitioners were there years ago when research was causing us lots of problems in firing managers that we had just causing us lots of problems in firing managers that we had just hired. They led the way in creating the new warning system that is hired. They led the way in creating the new warning system that is in place....yes that was an APIC project tooin place....yes that was an APIC project too

I could keep going on but the point is who was going to be my advocate I could keep going on but the point is who was going to be my advocate with the firm, who was going to teach me all of these things if the best with the firm, who was going to teach me all of these things if the best practitioners who are the members of APIC and constantly share with us practitioners who are the members of APIC and constantly share with us were not there. I can honestly say I would not have gotten to where I were not there. I can honestly say I would not have gotten to where I am with out this organization!am with out this organization!

2) So what has APIC done for me lately? Look on the APIC website and 2) So what has APIC done for me lately? Look on the APIC website and you will see a list of great closing presentations recently posted by Scott you will see a list of great closing presentations recently posted by Scott Thayer, you will see a great study on commodities and how they can Thayer, you will see a great study on commodities and how they can affect asset allocation posted by several FC's including Bill Hendrix and affect asset allocation posted by several FC's including Bill Hendrix and George Dunn, you will see a new Morningstar report that Mary George Dunn, you will see a new Morningstar report that Mary Deathridge has found to give a snap shot look at MPT stats on a series Deathridge has found to give a snap shot look at MPT stats on a series of SMA portfolio's, you will see an idea by George Cook to use SMA's of SMA portfolio's, you will see an idea by George Cook to use SMA's inside of 401k's there by reducing participant cost, you will see inside of 401k's there by reducing participant cost, you will see competition updates, etc. I use all of these and you will see a lot more.competition updates, etc. I use all of these and you will see a lot more.

What you wont see is what you will get most any other What you wont see is what you will get most any other place...people who are not willing to share because they view you place...people who are not willing to share because they view you as their competition. I don't know of anywhere else where you as their competition. I don't know of anywhere else where you will go and the best practitioners in the world will openly share will go and the best practitioners in the world will openly share their very best ideas for you to use. Why will they do that? their very best ideas for you to use. Why will they do that? Because, like me, they have gotten so much from this place we Because, like me, they have gotten so much from this place we call APIC it is a honor to give back.call APIC it is a honor to give back.

3) APIC is my place to be part of the solution rather than part of 3) APIC is my place to be part of the solution rather than part of the problem! We have real problems at this firm like all other the problem! We have real problems at this firm like all other firms. Like all firms this one has limited resources to address firms. Like all firms this one has limited resources to address those problems. APIC provides a forum with Sr Mng to those problems. APIC provides a forum with Sr Mng to understand what our top concerns are, prioritize them and fund understand what our top concerns are, prioritize them and fund them. Someday we should list out in one document the hundreds them. Someday we should list out in one document the hundreds of things that have been accomplished at this firm that started on of things that have been accomplished at this firm that started on an APIC priority list. You would be amazed at how much it has an APIC priority list. You would be amazed at how much it has affected your daily working life. I want this to continue, in fact I affected your daily working life. I want this to continue, in fact I need this to continue if my practice is going to continue to grow.need this to continue if my practice is going to continue to grow.

APIC is my place to be part of the solution rather than part of the APIC is my place to be part of the solution rather than part of the problem! We have real problems at this firm like all other firms. Like problem! We have real problems at this firm like all other firms. Like all firms this one has limited resources to address those problems. all firms this one has limited resources to address those problems. APIC provides a forum with Sr Mng to understand what our top APIC provides a forum with Sr Mng to understand what our top concerns are, prioritize them and fund them. Someday we should list concerns are, prioritize them and fund them. Someday we should list out in one document the hundreds of things that have been out in one document the hundreds of things that have been accomplished at this firm that started on an APIC priority list. You accomplished at this firm that started on an APIC priority list. You would be amazed at how much it has affected your daily working life. I would be amazed at how much it has affected your daily working life. I want this to continue, in fact I need this to continue if my practice is want this to continue, in fact I need this to continue if my practice is going to continue to grow.going to continue to grow.

Finally, I will leave you with this thought. Some of my closest friends in Finally, I will leave you with this thought. Some of my closest friends in the world have come from my time at APIC. In these relationships I the world have come from my time at APIC. In these relationships I find the things that make me a better practitioner and a better person. find the things that make me a better practitioner and a better person. My hope is that you will get more involved in APIC. If you wait for all of My hope is that you will get more involved in APIC. If you wait for all of these things to come to you, you are probably correct in leaving. these things to come to you, you are probably correct in leaving. However, if you embrace wanting to be cutting edge then allow us to However, if you embrace wanting to be cutting edge then allow us to help you find one of our committee's that most closely aligns with your help you find one of our committee's that most closely aligns with your business I think you will get from APIC everything that I have. It was business I think you will get from APIC everything that I have. It was the best decision I ever made and one I hope you will make as well. the best decision I ever made and one I hope you will make as well.

Thanks for listening and allowing me to share my experiences with you. Thanks for listening and allowing me to share my experiences with you. Timothy B. Kneen, APIC Vice PresidentTimothy B. Kneen, APIC Vice President

The good news to this letter is that the member has now The good news to this letter is that the member has now renewed their 2005 membershiprenewed their 2005 membership!!

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