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1 “Making the Right Choices...for you” Kovack Kovack Advisors, Inc. Advisors, Inc. Featuring Featuring ...Capstone Asset ...Capstone Asset Management, Cumberland Advisors, FDx Management, Cumberland Advisors, FDx Advisors, Groesbeck Investment Advisors, Groesbeck Investment Management, Healthcare Trust of Management, Healthcare Trust of America and ”What’s America and ”What’s Your Your Advisory Advisory IQ?” IQ?”

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Kovack Advisors, Inc. “Making the Right Choices...for you”. Featuring ...Capstone Asset Management, Cumberland Advisors, FDx Advisors, Groesbeck Investment Management, Healthcare Trust of America and ”What’s Your Advisory IQ?”. Kovack Advisors, Inc. Today we’re going to tell you. AM - PowerPoint PPT Presentation

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Page 1: “Making the Right Choices...for you”

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“Making the Right

Choices...for you”

Kovack Advisors, Kovack Advisors, Inc.Inc.

FeaturingFeaturing...Capstone Asset Management, ...Capstone Asset Management, Cumberland Advisors, FDx Advisors, Cumberland Advisors, FDx Advisors, Groesbeck Investment Management, Groesbeck Investment Management, Healthcare Trust of America and ”What’s Healthcare Trust of America and ”What’s YourYour Advisory IQ?”Advisory IQ?”

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Kovack Advisors, Inc.

AM The KAI Investment Advisory Platform Online Resources...”There’s no place like (KAI) Home” Q&A

PM New Technology Capturing Lost Revenue Through Program Expansion What’s Hot – What’s Not...Removing Emotion The Relationship & Focusing on What You CAN Control Fiduci-WHAT? Resources

Advisory IQ Question #1: Assets in fee-based managed investment solutions comprise what percentage of theoverall retail intermediary market?A. 9%B. 17%C. 31%

Answer: B

Today we’re going to tell you...

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Kovack Advisors, Inc.

The Right Solutions for You and Your Clients

CHOICE Advisor Non-discretionary, Advisor-directed, fee-based brokerage account

CHOICE SMA Access to disciplined, repeatable and time-tested institutional

investment managers CHOICE Fund

Professionally managed, multi-strategy mutual fund wrap investment program (Principled Portfolio Solutions – Ron Madey)

CHOICE UMA Uses a combination of investment vehicles in one “core” account

CHOICE Annuity Used with existing VA investments

The KAI Investment Advisory Platform

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Standard Account NFS Pershing 20 Basis Point Cost to

Advisor $19.50 Transaction

Charge to Client $50,000 Household

Minimum

Optional Account NFS Pershing 40 Basis Point Cost to

Advisor No Transaction Fee to

Client $50,000 Per Account

Minimum

Kovack Advisors, Inc. CHOICE Advisor: Non-Discretionary / Advisor-Directed

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Access to industry-leading Investment Managers Stocks (All Cap, Large, Mid, SMID, Small, Micro,

International, Global) Bonds (taxable/exempt), Balanced, REIT, ETFs

Discretionary Trading Authority 90 Basis Points Average Cost to Rep $100,000 Average Account Minimum Custom Client Presentations Quarterly conference calls One-on-one client meetings

Kovack Advisors, Inc. CHOICE SMA: Professional Third-Party Investment Management

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AllianceBernstein Capstone Asset Management Clover Capital Management Cumberland Advisors Davis Selected Advisors Forward Uniplan Advisors Gannet Welsh & Kotler Geneva Investment Management Groesbeck Investment Management Insight Capital Research & Management John Hancock

Lotsoff Capital Mgmt. MacquarieAllegiance MFC Global Investment Mgmt. Navellier & Associates Newgate Capital Mgmt. Pinnacle Associates The Roosevelt Investment Group Sovereign Asset Mgmt. Transamerica Investment Mgmt. ValueWorks LLC Washington Crossing Advisors

Kovack Advisors, Inc. CHOICE SMA: Current Manager / Discipline List

Advisory IQ Question #2: True or False? From 1Q06 – 3Q08, the market share of SMA assets declined while increases were realized in Mutual Fund Advisory, Rep as Portfolio Manager an UMA segments.

Answer: True – SMA market share fell 10%

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Definition: The unified managed account is an evolution of the separate account, which is similar in that it is a professionally managed account which is rebalanced often but only contains one type of investment instrument (such as mutual funds). If an investor wanted to have a well-diversified portfolio of stocks, bonds and mutual funds, he or she would need to open three separate accounts. The UMA removes the need to have more than one account and combines all of the assets into one account with a single registration. Source: Investopedia.com

Kovack Advisors, Inc. CHOICE UMA: Unified Managed Account

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10 Mutual Fund Models (5 Taxable / 5 Tax Exempt) $30,000 account minimum $135,000 average account size Financial & Intellectual/Human Capital

Kovack Advisors, Inc. CHOICE Fund: Professionally Managed Multi-Strategy Mutual Fund Wrap

Advisory IQ Question #3: According to a recent MMI study, what segment of the managed investment solutionindustry do investment managers expect the greatest opportunity for growth?

A. Mutual Fund AdvisoryB. SMAC. UMA

Answer: C

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Advisor Directed 40 Basis Point Cost to Advisor Bill from Annuity or Brokerage Account Not Paid on Payout Grid $25,000 Minimum Most Annuity Companies

Kovack Advisors, Inc. CHOICE Annuity: Used w/ Existing VA Investments

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Financial Profiles Kettley’s NaviPlan Thomson One (Through NFS)* Set your own fee schedules Provide Kovack Advisors a copy for compliance Paid on your payout level

Kovack Advisors, Inc. Financial Plans:

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Billing- Monthly For New Accounts and Quarterly For All Accounts

Performance Reports- Quarterly Account Reconciliation Drift Monitoring Technology- Website & Advisory Platform Sales & Marketing Support

Kovack Advisors, Inc. What We Provide:

Advisory IQ Question #4: Recent research by MMI and Dover Financial Research found that what percentage of allfinancial advisors have a portion of their book ($10 million or more) in fee-based advisory business?

A. 10%B. 40%C. 70%

Answer: 40%

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Kovack Advisors, Inc.

www.kovackadvisors.com Username: kai Password: advisor

Program Overviews Account Opening/Funding Instructions Account Paperwork E-Mail Archives Marketing Library

Online Resources...”There’s no place like (KAI) Home”

Advisory IQ Question #5: What broad trend has occurred over the last few years in the managed solutions industry?

A. A shift away from product-specific solutions toward holistic wealth management solutions.B. A shift away from holistic wealth management solutions toward product-specific solutions.C. Sponsor firms acquiring asset management firms.

Answer: A

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Kovack Advisors, Inc.

Are KAI forms available on LaserApp? What’s the “average” fee? Can I fund an account with securities or, in the case of mutual

fund wrap, with mutual funds? When am I paid? How much should I discount my business? Who’s responsible for firing a money manager?

Q&A... Here are some to break the ice

Advisory IQ Question #6: What percentage of assets in the managed investment solutions industry are in UMA?

A. 3%B. 21%C. 49%

Answer: 3%

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Kovack Advisors, Inc.

David R. Kotok is the Chairman and Chief Investment Officer of Cumberland Advisors.  He co-founded the firm in 1973 and has guided its investment strategy from inception.  Mr. Kotok holds a B.S. degree in economics from The Wharton School as well as dual master’s degrees from the University of Pennsylvania.

Mr. Kotok maintains an active global presence as the Director and Program Chairman of the Global Interdependence Center (GIC), a Philadelphia-based global trade and monetary policy think tank. Mr. Kotok is the global chair of the GIC 2009-2010 Capital Markets Series that will be held in successive meetings in Vietnam, China, Chile, Czech Republic, France, and Philadelphia.  He most recently chaired the GIC 2009 Food & Water Conference Series with meetings held in Philadelphia, Paris, Livingstone (Zambia), and Singapore.     

Mr. Kotok’s articles and financial market commentary have appeared in The New York Times, The Wall Street Journal, Barron's, and other publications. He is a frequent contributor to CNBC programs, including Morning Call, Power Lunch, Kudlow & Company, Squawk on the Street, Squawk Box Asia, and Worldwide Exchange.

Mr. Kotok is a member of the National Business Economics Issues Council (NBEIC), the National Association for Business Economics (NABE), the Philadelphia Council for Business Economics (PCBE), and the Philadelphia Financial Economists Group (PFEG).  He has also served as a Commissioner of the Delaware River Port Authority (DRPA), on the Treasury Transition Teams for New Jersey Governors Kean and Whitman, on the board of the New Jersey Economic Development Authority, and as Chairman of the New Jersey Casino Reinvestment Development Authority.

Mr. David R. Kotok, Chairman and Chief Investment Officer of Cumberland Advisors - Outlook for the Economy and Financial Markets, October 2009

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Mr. Demirali joined Cumberland Advisors in 2002 as portfolio manager for Cumberland Advisors Taxable Bond style.

Prior to that, Peter was a Senior Portfolio Manager at Smith Barney Asset Management from 1990 to 1999. In that position, he initiated a corporate bond component for taxable fixed income portfolios. From 1999 to 2002, he was a partner in Anval, Inc., a commercial real estate brokerage company where he successfully developed new territories and clients for his firm. He traded zero coupon bonds at Yamaichi International, a Japanese securities dealer from 1987 to 1989. Peter began his career at Chemical Bank from 1983 to 1987. At Chemical, he traded short and intermediate zero coupon bonds and Treasuries.

His comments and analysis have appeared in Bloomberg Business News, Barrons, and The Bond Buyer. He has appeared on CNBC, Fox Business News as well as Bloomberg Television.

Mr. Demirali holds a Bachelor of Science in Business Administration from Georgetown University. He is a member of the Philadelphia Council of Business. Peter resides in Mendham, New Jersey with his wife and son.

Mr. Peter M. Demirali, Vice President and Portfolio Manager of Cumberland Advisors - Outlook for the Economy and Financial Markets, October 2009

Kovack Advisors, Inc.

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Kovack Advisors, Inc. Mr. Alex MacGillivray - Healthcare Trust of America, Inc.

Focusing on the Eastern Division, Mr. MacGillivray is responsible for developing and implementing sales strategies, coordinating marketing and sales efforts and increasing the number of selling agreements with retail broker-dealers.

Mr. MacGillivray brings extensive experience to Realty Capital Securities. Most recently, Alex served as managing director and President of his own 1031 wealth management company. He previously held key executive positions with three nationally recognized real estate sponsors, and has served as general partner and principal in numerous private placement equity offerings, specializing in structured finance and sales-leaseback financing.     

Mr. MacGillivray received his Bachelor of Arts in Psychology from Creighton University and holds FINRA Series 7, 63 and 26 licenses.

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12:00 – 1:00PM: Buffet Lunch and Networking – Grand Foyer

LUNCH!

Kovack Advisors, Inc.

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Kovack Advisors, Inc. New Technology Capturing Lost Revenue through Product Expansion What’s Hot – What’s Not...Removing Emotion The Relationship & Focusing on What You CAN Control Fiduci-WHAT? Resources

Advisory IQ Question #7: Over the last five years, the average all-in costs (i.e. advice, clearing/custody, manager fees) has held relatively steady at approximately:

A. 125 bpsB. 170 bpsC. 200 bps

Answer: B

PM

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Mr. Scott Frakes, Vice President and Mr. Scott Wynant, Senior Vice President of Capstone Asset Management Co. – Investing in RetirementThe Game Has Changed...Or Has It?

SCOTT FRAKESVice PresidentBA - Bowling Green University2001-present: Capstone Asset Management Company1996-2001:     A.G. Edwards & Sons, Inc. Series 7 Registered Representative

SCOTT WYNANTSenior Vice PresidentBA University of Oregon2008-Present: Capstone Asset Management Company1997-2008: AG Financial Solutions1982-1997: Shearson Lehman Brothers Smith Barney1978-1982: Sutton Financial Corporation

Kovack Advisors, Inc.

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2:45 – 3:15PM: Afternoon Snack Break – Grand Foyer

BREAK – Sponsored by Capstone Asset Management

Kovack Advisors, Inc.

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Kovack Advisors, Inc.

Mr. Dainesi is the Director of Research and a portfolio manager. He joined the firm in November 1993 and has 21 years of experience as an investment professional. His security analysis experience includes following several economic sectors and many industry groups. He has been a portfolio manager since 1991. He was a security analyst at Value Line and a portfolio manager with Sturdivant & Co. Prior to joining the firm, Mr. Dainesi was a portfolio manager and security analyst with Asiel & Co. Mr. Dainesi earned a BA degree in Economics from Queens College and an MBA in Finance from Bernard M. Baruch College. He is a member of the New York Society of Security Analysts and the CFA Institute.

Mr. Robert P. Dainesi, Executive Vice President of Groesbeck Investment Management – Dividend Investing and the Growth of Income Process

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Kovack Advisors, Inc.

Ronald Madey is responsible for providing research and investment solutions to FDx Advisors, the renamed SunGard Advisor Technologies business acquired by FolioDynamix in 2008. Before joining SunGard, Mr. Madey was vice president, National Director of Investments at Lincoln Financial Advisors/Sagemark Consulting. While there, he established a scalable, institutional quality investment process and designed sophisticated wealth management technologies utilizing Monte Carlo-based investment planning tools to serve the high net worth marketplace. Prior to joining Lincoln, Mr. Madey was National Director of Asset Consulting Services at Towers Perrin, where he was responsible for overseeing the firm’s asset consulting, asset allocation modeling and investment manager research units. Earlier, Mr. Madey held senior positions in portfolio management, research and proprietary trading with DuPont Capital Management, a subsidiary of E. I. du Pont de Nemours & Company, as well as at Bridgewater Associates and Credit Lyonnais Securities.

During his almost 25 years in investment management, consulting and financial services, Mr. Madey has applied risk-controlled investment strategies to areas ranging from fixed income portfolio management and multi-manager portfolio construction, to asset allocation and asset-liability management. He has spoken publicly on wealth management, investment strategy, risk management and liability driven investing at conferences for the American Bankers Association, the Money Management Institute, the CFA Institute, the Institutional Investor Institute and the Investment Management Institute. Mr. Madey is also a co-author of a Journal of Portfolio Management article on the "Advantages of Multi-period Portfolio Models."

Mr. Madey holds a bachelor of business administration, cum laude, in finance and real estate, and a MBA, with a focus on planning and strategy, from Kent State University. He has a CFA and is a member of the CFA Institute and the CFA Society of Philadelphia.

Mr. Ron Madey, CFA, Chief Investment Officer of Principled Portfolio Solutions – Foundations for Practice Growth and Client Success

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Kovack Advisors, Inc. Capturing Lost Revenue Through Program Expansion What’s Hot – What’s Not...Removing Emotion The Relationship & Focusing on What You CAN Control Fiduci-WHAT? Resources

Advisory IQ Question #8: True or False? The trend toward bundling fees has increased in recent years.

False – unbundling of fees is increasing

PM Cont...

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What’s Hot – What’s Not...Focusing on What You CAN Control

Kovack Advisors, Inc.

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What’s Hot – What’s Not...Focusing on What You CAN Control Cont...

Kovack Advisors, Inc.

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What’s Hot – What’s Not...Focusing on What You CAN Control Cont...

Kovack Advisors, Inc.

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Kovack Advisors, Inc. Fiduci-WHAT?

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www.kovackadvisors.com

Marketing Material

HOT OFF THE PRESS Slimjim!

“INVEST FOR LIFE” Client Brochure

Tips, Tools, & Tactics, KAI News & Notices, Meet Your Manager

Manager Profiles, Comparisons, & Manager Returns Sheets

Custom Client Presentations

www.kacfinancialservices.com

Kovack Advisors, Inc. Resources

Advisory IQ Question #9: True or False? The market share of the managed investment solutions industry controlled by wirehouse firms increased from 2Q08 – 2Q09.

False – Decreased from 68% to 60%.

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Chris MillsExecutive Vice PresidentKovack Advisors, Inc.Phone: 954-670-0617E-mail: [email protected]

We look forward to being a partner in the growth of your Advisory Practice!

Ryan R. WyllysVice PresidentKovack Advisors, Inc.Phone: 954-670-8707E-mail: [email protected]

Regina SchumakerExecutive Administrative AssistantKovack Advisors, Inc.Phone: 954-670-0621E-mail: [email protected]

Kovack Advisors, Inc.

Advisory IQ Question #10: Based on a recent Dover/MMI study, sponsor firms expect to convert what percentage of their SMA assets to UMA?

A. NoneB. 25%C. 50%

Answer: 50%