ifwc ria presentation 2010

V4033109Ó FundQuest Incorporated 2010

Institute for Family Wealth Counseling

RIA Advisory Product and Service Offering


A Strategic Partnership RIA Advisory Product and Service Offering

Firm Overview

Platform Overview

Product and Service Offerings

3For Investment Professional use only. Not for distribution to the public.

Click to edit Master title style

Founded in 1993

$40 billion in assets under management & administration in combined US and European operations*

Subsidiary of BNP Paribas, one of world’s largest and most stable financial services firms

Registered Investment Advisor (RIA)

A global leader in managed account solutions

*FundQuest's services are offered in the US through FundQuest Incorporated, a registered investment advisor

FundQuest Snapshot


Click to edit Master title styleGlobal Presence

A global organization with investment teams in Boston, Paris, London

210 people, including 48

investment professionals in combined US and European operations

ParisBoston

London


Click to edit Master title styleStrategic Outsourcing for Advisory Firms

BanksInsurance

CompaniesBroker-Dealers

Trust /Wealth-Management

Over 180 Financial Advisory Firm Clients

RIAs

Over 80 RIA firms with $25 million to $3 billion in AUM

12 of top 20 independent broker dealer networks

3 of the top 10 bank broker-dealers

28 of the top 100 credit unions

The largest third party bank investment marketing firm

10 of top 50 life insurance broker-dealers

Major regional bank trust and family office divisions



Firm Overview

Platform Overview



Click to edit Master title styleSample RIA Business Model

Asset Gathering

InvestmentAdvice

Client Servicing

InvestmentManagement

Trading / Rebalancing

Portfolio Accounting

Client Reporting

Compliance

Custodian #1

Custodian #2

TPA#1

Etc.

Investment Advisory Professionals

Investment Manufacturing and Support Professionals

3rd Party Custodians and other Book of Record Providers


Click to edit Master title styleFundQuest Managed Account Platform

Proposal Tools

Advisor Servicing

Portal

Practice Management

Manager Due

Diligence

Operational Support Services


and Reporting

Client Reporting

Investment Product

Custodian #1

Custodian #2

TPA#1

Etc.

Investment advisory professional web portal coupled with field and telephone based sales and service support professionals

Comprehensive investment management and support services offered on a bundled or à la carte basis

Seamless integration with major custodians and record keepers


Click to edit Master title styleFlexible FundQuest Partnership Model

Asset Gathering

InvestmentAdvice

Client Servicing

InvestmentManagement

Trading / Rebalancing


Client Reporting

Compliance

Custodian #1

Custodian #2

TPA#1

Etc.

FQ

FQ

E X A M P L E

A flexible solutions driven approach allows RIA to take

advantage of a custom tailored set of tools and services to supplement the RIAs core

competencies


Click to edit Master title styleCustody and Clearing Flexibility

Proposal Tools

Advisor Servicing

Portal

Practice Management

Manager Due

Diligence



and Reporting

Client Reporting

Investment Product

Custodian #1

Custodian #2

TPA#1

Etc.

Clearing and

Custody Providers

FundQuest has partnerships with the major clearing and custody firms:

Fidelity (IWS and NFS) Pershing (PAS and BDS) Schwab Institutional TD Ameritrade J.P. Morgan Ridge Clearing NSCC VA / VUL interfaces DST FanMail interfaces



Firm Overview

Platform Overview



Click to edit Master title style

Advisor portal allows web access to investment support and client servicing tools:

Website branded to the RIA with ability to post customized news bullets and firm related investment and product documents

Investment center that provides product detail and research tools

Investment proposal tools

Account look up and report center

Forms and paperwork center

Advisor Servicing Portal

Advisor Servicing

Portal


Click to edit Master title styleWelcome Page

Advisor Servicing

Portal

1/8/2010 Recent Market Outlook Available <here>

Hunter GroupH

Welcome to the Hunter Group Financial Advisors Portfolio Management Program, an advisor-driven, managed account program offered through FundQuest. FundQuest is a leading independent investment management firm that designs, develops and operates managed account investment programs that enable financial institutions to offer managed account products.

Clicking on the links in the top of this page will bring to the appropriate section of the website.

If you have any questions, please contact FundQuest support at 1-800-234-6522 or [email protected]

HOME CLIENT PROFILING INVESTMENT CENTER FORMS CENTER ACCOUNT LOOKUP


Click to edit Master title styleInvestment Center

Advisor Servicing

Portal

Due Diligence Analysis

Fact Sheets

Commentaries and Product Detail


Click to edit Master title styleAccount Viewing

Advisor Servicing

Portal

The account lookup feature allows the advisor to query accounts in a variety of ways:

Household drilldown. Information is grouped by household with ability to drill into the account level

Account View. This view shows current actuals versus target allocations and flags exceptions

Performance View. Presents performance as of previous business day

Account Detail. Transaction history, account fee schedules, and prompts to create interim statements are also available


Click to edit Master title styleOn Demand Reporting

Advisor Servicing

Portal

Advisors may generate portfolio accounting style reports for one or more household relationships or one or more accounts. Consolidated or per account views User defined output formats including PDF and MS excel Point to point performance reporting and “as of” position

statements


Click to edit Master title styleOn Demand Reporting Samples

Advisor Servicing

Portal


Click to edit Master title styleProposal Tools

Proposal Tools

Client profiling application provides suitability questionnaire and customizable client investment proposal:

Suitability questionnaire provided by FundQuest or customized to the RIA

Existing portfolio diagnostic

Investment recommendation

Portfolio analytics – recommended versus benchmark

Mutual fund, ETF, and manager strategy fact sheets


Click to edit Master title styleClient Profiling

Proposal Tools

Client Questionnaire Portfolio Construction Proposal Creation


Click to edit Master title styleClient Proposal Options

Proposal Tools

Current and Recommended Portfolio Presentation

Fact Sheets

Portfolio Analytics


Click to edit Master title stylePractice Management

Practice Management

FundQuest sales and service competency: Toll free service desk for inquiries and assistance preparing

proposals as needed Field force available for on site training and support Conference calls with FundQuest Investment Management and

outside speakers on a quarterly basis Marketing collateral design assistance


Click to edit Master title styleInvestment Product – RIA Manufactured

An RIA may offer their own product through the FundQuest platform:

FundQuest’s internet based manager portal allows for the submission of product models and manager strategy models

Flexible model management including rebalancing instructions and alternate security treatment

Allows for full outsource of trading responsibilities and overhead

Investment Product


Click to edit Master title styleInvestment Product – ActivePassive® Portfolios

Investment Product

Access to FundQuest ActivePassive® Portfolios, an innovative product that efficiently allows the investor to combine active and passive investment strategies:

Each fund has established active to passive ratio guidelines that are the minimum and maximum boundaries for the fund’s allocation to the actively and passively managed components.

PASSIVE MANAGEMENT BENEFITS• Generally lower management fees• No decision making required by the manager• Better potential for capturing full performanceof the index: up and down

PASSIVE MANAGEMENT CHALLENGES• Investors cannot expect to exceed index returns• No ability to provide downside protection

ACTIVE MANAGEMENT BENEFITS• Expert analysis by experienced investmentprofessionals• Upside potential: the possibility of achievingreturns higher than those of the index• Downside protection: managers may actdefensively during market downturns and periodsof market uncertainty

ACTIVE MANAGEMENT CHALLENGES• Higher fees and operating expenses• Poor security selection or sector allocationdecisions may impact returns


Click to edit Master title styleInvestment Product – UMA

UMA offering allows either a model based approach or for those investment advisors who want to do hands-on portfolio management:

Open architecture product depth and breadth. Ability to construct portfolios using a wide universe of separate account manager strategies, ETFs, mutual funds, and legacy stock positions within a single account

Advanced overlay process. Sophisticated overlay portfolio management processes with drift tolerances calibrated to sleeve size

Flexible restriction handling. Industry sectors, individual securities, KLD research categories, and SIC codes may all be used as screening criteria

Enhanced tax management capabilities. Systematic, risk-managed tax harvesting processes support identification of opportunities throughout the year. Sensibly calibrated optimization is aimed at minimizing small trades

Lower manager minimums and fees. As compared to traditional SMA products

Investment Product


Click to edit Master title styleInvestment Product – UMA

Investment Product

Typical UMA Concerns The FundQuest Difference

Only model portfolios are available

Advisor may be given the discretion to construct a portfolio to meet the clients specific needs

UMA cannot accommodate a legacy position

A legacy position may be set up as an individual security

Key managers are not willing to participate in many UMA programs

FundQuest’s overlay process provides trading flexibility that allows participation in manager rotations, trading techniques dictated by the manager and manager step out trading

Fixed income manager strategies are not available

Fixed income manager strategies are available at minimums starting at $100,000

Fees are too high Manager strategy fees discounted as compared to traditional SMA account solutions


Click to edit Master title stylePortfolio Accounting and Reporting

Proprietary portfolio accounting system consolidates all accounts across RIAs custodians:

Daily downloads with major custodians supported by daily reconciliation and performance measurement calculations

Firm level management reporting available

Advisor level on demand reports available through the advisor website

Ability to link multiple accounts at a household relationship level for viewing and reporting

Ability to maintain cost basis at the lot level


and Reporting


Click to edit Master title styleOperational Support Services

FundQuest Advisor Services and Operations teams dedicated to ongoing advisor support:

Sophisticated overlay technology allows FundQuest to provide trading and rebalancing services for modeled products

Flexible fee engine supports diverse sets of fee schedules with automated interfaces to major custodians for fee deductions

Support for periodic and ad hoc cash deposits and withdrawals and dollar cost averaging requests

Operational support models tailored to the needs of the RIA



Click to edit Master title styleClient Reporting – Quarterly Performance Report

Client Reporting


Click to edit Master title styleClient Reporting – Account Snapshot Report

Client Reporting


Click to edit Master title styleClient Reporting – Web Access

Client Reporting

A/C#

ColumnAccount Name Columns

Client web access available

Quarterly performance reports may be posted

ifwc ria presentation 2010

Documents

service offerings

firm overview

platform overview