Nationwide Financial IV CONGRESS OF POLISH BROKERS MAY 25, 2001 MARI RADEL DIRECTOR, PENSION OPERATIONS NATIONWIDE FINANCIAL

Nationwide Nationwide FinancialFinancial

IV CONGRESS OF POLISH BROKERSIV CONGRESS OF POLISH BROKERS

MAY 25, 2001MAY 25, 2001

MARI RADELMARI RADEL

DIRECTOR, PENSION OPERATIONSDIRECTOR, PENSION OPERATIONS

NATIONWIDE FINANCIALNATIONWIDE FINANCIAL

BROKER SERVICING BROKER SERVICING THROUGH THROUGH

TECHNOLOGY TECHNOLOGY

Today and TomorrowToday and Tomorrow

BROKER POPULATION IN BROKER POPULATION IN THE UNITED STATESTHE UNITED STATES

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Broker Channel Breakdown247,000 Total U.S. Brokers - 2000

NATIONWIDE FINANCIAL NATIONWIDE FINANCIAL RECENTLY COMPLETED RECENTLY COMPLETED

EXTENSIVE MARKET EXTENSIVE MARKET RESEARCH TO IDENTIFY RESEARCH TO IDENTIFY BROKER PREFERENCESBROKER PREFERENCES

NATIONWIDE FINANCIAL NATIONWIDE FINANCIAL MARKET RESEARCHMARKET RESEARCH

Nationwide Financial solicited Nationwide Financial solicited feedback from over 1,400 U. S. feedback from over 1,400 U. S. Broker Dealer firms to determine Broker Dealer firms to determine how to become their #1 companyhow to become their #1 company.


What prompts you to sell What prompts you to sell with a different company?with a different company?What makes you keep What makes you keep selling with a particular selling with a particular company?company?What are the most What are the most important services you important services you receive from your receive from your Nationwide Financial Nationwide Financial wholesalers?wholesalers?

What products do What products do brokers most often sell?brokers most often sell?What are your most What are your most important daily activities?important daily activities?What are your most What are your most pressing challenges?pressing challenges?What are the most What are the most important services you important services you receive from Nationwide receive from Nationwide Financial?Financial?

QUESTIONS ASKEDQUESTIONS ASKED


U. S. BROKER MARKETS U. S. BROKER MARKETS IndividualsIndividualsCorporationsCorporationsSmall Business OwnersSmall Business OwnersNon-Profit OrganizationsNon-Profit OrganizationsReligious OrganizationsReligious OrganizationsSchoolsSchools

Mutual FundsVar AnnuitiesSec/StocksVar Life58%58%

20%20%

9%9%8%8%


PRODUCTS MOST OFTEN SOLD BY BROKERSPRODUCTS MOST OFTEN SOLD BY BROKERS


Finding:Finding:

BROKERS BROKERS CHOOSE ONE CHOOSE ONE PRODUCT OVER PRODUCT OVER ANOTHER FOR ANOTHER FOR MANY DIFFERENT MANY DIFFERENT REASONSREASONS

Wholesaler Wholesaler RelationshipRelationshipMarketing MaterialsMarketing MaterialsUp-front CommissionsUp-front CommissionsTrail CommissionsTrail CommissionsPerformancePerformanceBenefits and FeaturesBenefits and FeaturesLow FeesLow Fees


0%

10%

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60%

ProvideAdvice

ExplainMarket

PrepareReports

ExplainPerf

ResolveErrors

BROKER’S TOP DAILY ACTIVITIESBROKER’S TOP DAILY ACTIVITIES

BROKER’S GREATEST BROKER’S GREATEST CHALLENGESCHALLENGES

Servicing Clients - 70%Servicing Clients - 70%Managing Client Information - 52%Managing Client Information - 52%Client Demands - 48%Client Demands - 48%Product Complexity - 31%Product Complexity - 31%


OTHER CHALLENGES FACING OTHER CHALLENGES FACING BROKERS:BROKERS:

Lead Development/Finding ProspectsLead Development/Finding ProspectsTime ManagementTime ManagementInternet and Online InvestingInternet and Online InvestingHigher CompetitionHigher CompetitionUncertain Market PerformanceUncertain Market Performance



0%5%

10%15%20%25%30%35%40%45%50%

Poor Service Poor Product MoreProducts

Fees Too High

REASONS BROKERS SWITCH TO A NEW COMPANYREASONS BROKERS SWITCH TO A NEW COMPANY

VERY IMPORTANT REASONS TO VERY IMPORTANT REASONS TO STAY STAY WITH A COMPANYWITH A COMPANY

ServiceServiceProduct CharacteristicsProduct CharacteristicsCustomer FocusCustomer Focus


SERVICE, SERVICE, SERVICESERVICE, SERVICE, SERVICEQuality of Service - 93%Quality of Service - 93%Efficient Problem Resolution - 87%Efficient Problem Resolution - 87%Easy To Do Business With - 84%Easy To Do Business With - 84%Frequent Contact By Wholesaler - 22%Frequent Contact By Wholesaler - 22%Frequent Contact By Home Office - 14% Frequent Contact By Home Office - 14%


GREAT PRODUCTSGREAT PRODUCTS

Fund Performance - 77%Fund Performance - 77%Broad Range of Products - 63%Broad Range of Products - 63%Innovative Products - 44%Innovative Products - 44%Commission Options - 37%Commission Options - 37%


CUSTOMER FOCUSCUSTOMER FOCUS

Focus on Client Needs - 80%Focus on Client Needs - 80%Consumer-friendly Materials - 54%Consumer-friendly Materials - 54%Reputable Name - 39%Reputable Name - 39%


HOW CAN NATIONWIDE FINANCIAL HOW CAN NATIONWIDE FINANCIAL HELP BROKERS SELL MORE HELP BROKERS SELL MORE BUSINESS?BUSINESS?

Expand the Use of TechnologyExpand the Use of TechnologyGenerate Qualified LeadsGenerate Qualified LeadsProvide “Be the Best” TrainingProvide “Be the Best” TrainingExpert AccessExpert AccessProfiling ClientsProfiling Clients



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60%T

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NF HELPING BROKERSNF HELPING BROKERS

NATIONWIDE FINANCIAL’S NATIONWIDE FINANCIAL’S RESPONSE TO MARKET RESPONSE TO MARKET

RESEARCHRESEARCH

Develop “Be the Develop “Be the Best” TechnologyBest” Technology

Develop “Be the Develop “Be the Best” Product and Best” Product and Services Training Services Training for Brokersfor Brokers

Develop “Be the Develop “Be the Best” ServicesBest” Services

Develop “Be the Develop “Be the Best” Client Best” Client Advice Advice

NATIONWIDE FINANCIALNATIONWIDE FINANCIAL

WHAT INTERNET SERVICES DOES WHAT INTERNET SERVICES DOES NATIONWIDE FINANCIALNATIONWIDE FINANCIAL PROVIDE PROVIDE TO BROKERS IN TODAY’S TO BROKERS IN TODAY’S FINANCIAL SERVICES FINANCIAL SERVICES MARKETPLACE?MARKETPLACE?

NATIONWIDE FINANCIAL - NATIONWIDE FINANCIAL - INTERNET SERVICES FOR INTERNET SERVICES FOR

TODAY’S BROKERTODAY’S BROKER

INFORMATION ABOUT THE COMPANYINFORMATION ABOUT THE COMPANY Corporate OverviewCorporate Overview Company FinancialsCompany Financials Press ReleasesPress Releases AwardsAwards Community InvolvementCommunity Involvement How to Contact UsHow to Contact Us Media ContactsMedia Contacts



ACCOUNT INFORMATION AND SERVICESACCOUNT INFORMATION AND SERVICESAccount BalanceAccount BalanceStatus of Pending TransactionsStatus of Pending TransactionsTransaction ConfirmationsTransaction ConfirmationsTransaction HistoryTransaction HistoryView, Order and Print StatementsView, Order and Print StatementsPurchase, Exchange or Withdraw Purchase, Exchange or Withdraw Download Account FormsDownload Account Forms



PRODUCT INFORMATIONPRODUCT INFORMATION 1, 3, 5 and 10 Year Return Information1, 3, 5 and 10 Year Return Information Daily Unit ValuesDaily Unit Values Minimum Investment InformationMinimum Investment Information Fees and ChargesFees and Charges Third Party Insurance RatingsThird Party Insurance Ratings Investment Performance ProfilesInvestment Performance Profiles Product OverviewProduct Overview Download of ProspectusDownload of Prospectus



INVESTOR EDUCATIONINVESTOR EDUCATION Price of Procrastination Benefits of Tax Deferral Addressing Retirement Planning Addressing Estate Planning Addressing Other Life Stages Glossary of Financial Terms Answers to Frequently Asked Questions Press Releases



TAX CENTERTAX CENTER

Tax GuideTax Guide Tax Frequently Asked QuestionsTax Frequently Asked Questions Tax Form ViewsTax Form Views



NEWS PAGE

Financial News HeadlinesFinancial News Headlines Performance of Market IndicesPerformance of Market Indices Press ReleasesPress Releases



PLANNING TOOLS AND CALCULATORPLANNING TOOLS AND CALCULATOR

Retirement Needs Planning Calculator Tax Deferral Calculator College Planning Calculator



E-MAIL CAPABILITIESE-MAIL CAPABILITIES

E-Mail General CapabilitiesE-Mail General CapabilitiesE-Mail Feedback About WebsiteE-Mail Feedback About WebsiteE-Mail Secure Account InquiriesE-Mail Secure Account InquiriesE-Mail Transaction ConfirmationsE-Mail Transaction Confirmations



HELP FUNCTIONALITYHELP FUNCTIONALITY

Site MapSite MapSite Search EngineSite Search EngineTools and Software to Aid in Using SiteTools and Software to Aid in Using Site

Nationwide Financial Internet Nationwide Financial Internet Demo Website:Demo Website:

https://secure.nwservicecenter.com

SERVICING FOR THE SERVICING FOR THE BROKER OF TOMORROWBROKER OF TOMORROW

TECHNOLOGY FOR TECHNOLOGY FOR TOMORROW’S BROKERTOMORROW’S BROKER

COMPANY SITESCOMPANY SITES

Contact and Referral GeneratorsContact and Referral GeneratorsSales InitiationSales InitiationTrue Online SalesTrue Online SalesVirtual WholesalingVirtual WholesalingBroadcasting Broadcasting


Let’s take a look at some examples of the benefits of Let’s take a look at some examples of the benefits of VIRTUAL WHOLESALING via Company Websites:VIRTUAL WHOLESALING via Company Websites:

Links with palm pilots/PDAs for scheduling, lead generation and account maintenance

Tracking of visits to Broker/Dealer offices Generation of leads that can be readily accessed Better management of territories E-mail to follow-up or precede a physical visit Enables focus towards consultation and management


Let’s take a look at some examples of BROADCASTING Let’s take a look at some examples of BROADCASTING via Company Websites:via Company Websites:

Audio Visual Clips of Fund Managers Discussing Their Audio Visual Clips of Fund Managers Discussing Their Investment StrategiesInvestment Strategies

Online Discussions Between Portfolio Managers, Brokers Online Discussions Between Portfolio Managers, Brokers and Customersand Customers

Proprietary Manager CommentariesProprietary Manager Commentaries Newsroom for Financial JournalistsNewsroom for Financial Journalists Archived Video Updates and Investment Information……Archived Video Updates and Investment Information……

just to name a few!!just to name a few!!


SUPERMARKETS AND MALLSSUPERMARKETS AND MALLS

Carrier LeadsCarrier LeadsAgent ReferralsAgent ReferralsOnline AgenciesOnline AgenciesThird Party AdministratorsThird Party Administrators


RELATIONSHIP BASED SITESRELATIONSHIP BASED SITES

Portals and Banner SitesPortals and Banner SitesEvent Triggered Presence or LinksEvent Triggered Presence or Links

BROKER SERVICING FOR BROKER SERVICING FOR TOMORROW - What Is on the TOMORROW - What Is on the

Technology Horizon? Technology Horizon?

Some technologies will play an even bigger role in altering the commercial landscape of financial services.”

Financial Services OnlineFinancial Services Online

Take a look at what many believe will be the top 8 most influential technologies during 2001 and beyond:

“In the brave new world of online financial services, increasingly dominated by global markets and a sophisticated global customer base, new technologies are providing answers to problems barely imagined by the science fiction of the 1950s and 1960s.


Technology Horizon?Technology Horizon?

U.S. wireless units will rise to 26 million by 2005 - TowerGroupHalf of U.S. trading volume could be wireless by 2005U.S. financial institutions are only beginning to explore the use of wireless services, still trying to figure out how to capitalize on Internet capabilities

1. 1. WIRELESSWIRELESSNext wave of online Next wave of online banking, brokerage and banking, brokerage and stock trading servicesstock trading servicesMobile phones and Mobile phones and handheld deviceshandheld devicesPlace orders, retrieve Place orders, retrieve real-time updates and real-time updates and account balances, review account balances, review historical trade activityhistorical trade activity



Banks and brokerage Banks and brokerage firms have begun offering firms have begun offering this service, including:this service, including:

Chase ManhattanChase Manhattan

CitigroupCitigroup

[email protected]@nk

Wells FargoWells Fargo

FidelityFidelity

Merrill Lynch - plannedMerrill Lynch - planned

2. AGGREGATION2. AGGREGATION“screen scraping” that extracts data from various Internet web sites and presents it to customersallows customers to have control over all their financial data from banks, brokerages, lenders, financial institutions….all on one Internet Web page



Financial services firms Financial services firms are developing their own are developing their own proprietary portals or proprietary portals or investment channelsinvestment channelsA few U.S. technology A few U.S. technology firms are offering services firms are offering services to develop commercial to develop commercial portals for financial portals for financial services firmsservices firms

3. PORTALS3. PORTALSDay of the high-priced Day of the high-priced portals through Internet portals through Internet providers may be overproviders may be overincludes bill paying, includes bill paying, account aggregation, news, account aggregation, news, sports, stock market sports, stock market quotes, weather, travel quotes, weather, travel services and e-mailservices and e-mail



CRM software manages CRM software manages customer e-mail, text-based customer e-mail, text-based chat and voice chat and voice communications over the communications over the InternetInternetcombines data-combines data-warehousing, e-commerce warehousing, e-commerce applicationsapplications and call center and call center technologiestechnologies

4. ELECTRONIC 4. ELECTRONIC CUSTOMER CUSTOMER MANAGEMENT MANAGEMENT (e-CRM)(e-CRM)

designed to integrate designed to integrate traditional customer traditional customer relationship management relationship management with online customer with online customer serviceservice



Most U.S. companies are focused on improving their overall security measures

Advanced Encryption Standards offers a much higher level of security and will be highly used by most U.S. companies

5. SECURITY5. SECURITYElectronic Signatures Act Electronic Signatures Act makes e-signatures legally makes e-signatures legally bindingbinding

Neural network Neural network technology makes sense of technology makes sense of patterns and can shut patterns and can shut systems down before systems down before damage can occurdamage can occur



Banks and brokerage Banks and brokerage firms will have to change firms will have to change their systems to their systems to accommodate EBPP in the accommodate EBPP in the future, although the future, although the greatest opportunity for greatest opportunity for success resides with bankssuccess resides with banksInternet-based EBPP Internet-based EBPP market jumped 540% market jumped 540% worldwide in 1999.worldwide in 1999.

66. . ELECTRONIC ELECTRONIC BILL BILL PRESENTMENT PRESENTMENT AND PAYMENT AND PAYMENT (EBPP)(EBPP)

Little activity in the U.S. Little activity in the U.S. financial services industryfinancial services industry



Online modeling and Online modeling and loan initiationloan initiation

7. 7. ONLINE ONLINE LENDING LENDING SYSTEMSSYSTEMS

Most applicable for Most applicable for financial services firms financial services firms engaging in loans engaging in loans



impact on financial impact on financial services industry is huge, as services industry is huge, as this will enable the this will enable the exchange of financial data exchange of financial data between banks, customers, between banks, customers, stock brokers, mutual stock brokers, mutual funds and financial service funds and financial service companiescompanies

8. XML8. XML

language that will soon language that will soon rival HTML for use in rival HTML for use in online financial servicesonline financial services

CHALLENGES WE FACE WITH CHALLENGES WE FACE WITH THE TECHNOLOGY OF THE TECHNOLOGY OF

TOMORROWTOMORROW

Band Width of the InternetBand Width of the InternetElimination of “Personal Touch”Elimination of “Personal Touch”Constantly Evolving TechnologiesConstantly Evolving TechnologiesEducation of Customers, Brokers, IntermediariesEducation of Customers, Brokers, IntermediariesCost of ImplementingCost of Implementing New Technologies New Technologies Fee-based PricingFee-based PricingMove to Wireless TechnologyMove to Wireless Technology

QUESTIONS?

Documents

Nationwide Financial IV CONGRESS OF POLISH BROKERS MAY 25, 2001 MARI RADEL DIRECTOR, PENSION OPERATIONS NATIONWIDE FINANCIAL