Premium Portfolio Service (PPS)

Presentation to the Principals

Premium Wealth Management

31 August 2012

Michael Fogarty & Rodney Brown

How it works

Investment Menu (quasi APL)Full transaction capability

Other assetsE.g. Direct property

PWM

Model

portfolios

CashIMAs

Listed

securities

incl. ETFs

Managed

funds

Term

deposits

Comprehensive Investment Reporting

Valuation & asset allocation

incorporated into reporting

Margin enhancement

Wrap

52bps

100bps

100bps

Premium Portfolio Service

Admin Fee

Investment Manager Fee

Adviser Fee

32bps

60bps

100bps

Fee type

252bps Total cost to client 192bps

* Based on portfolio size of $500,000

What’s in it for Premium?

Repositions the PWM business around a fee for service based model

Extracts greater margin for the dealer from existing processes and relationships

Significant revenue and profit generation

• Transitions PWM from a “co-operative” to a business• Increases valuation of the PWM business to enhance shareholder value• Increases capacity to pay dividends

• Additional income to pay for increased dealer group services (adviser support, para-planning, marketing, insurance etc) and conferences

A unique value proposition to attract new advisers to the group and to differentiate our advice practices from competitors.

Client portability within member firms and dealer group will assist with succession

Reduced compliance concerns

Fully branded service offering

What’s in it for Premium Advisers?

Improved management of client portfolios

• Enables decisions to be acted upon quickly where market conditions dictate• Increased practice efficiency

• Use of model portfolios and IMAs means advisers don’t need to produce ROAs to make changes to client portfolios

• Allows more time to meet with clients & provide strategic advice• More time for new business generation• Less time spent on compliance and admin

Scalable solution increasing capacity to service more clients with little extra cost

Client portability assists with succession

Eliminates reliance upon platform rebates

Custody for portfolio liquidity, fees and corporate actions

What’s in it for Clients?

All the benefits of direct ownership – dividends, franking credits etc

Transparency – everything is visible and accountable

Professional portfolio management

Maintain unique tax position – flexibility regarding tax methodology chosen

Reduced fees

Portability – clients can in-specie securities and managed funds into and out of the service and between portfolios without triggering a CGT event

Progress Update

Ongoing discussions and negotiations with HUB24 Structure established (Premium Investment Management Pty Ltd)

Investment Committee reconstituted

Legal agreements being reviewed by PWM lawyers

Model portfolios developed and ratified by the Investment Committee

Still To Do

Legal agreements executed

Model portfolios to be reviewed by Zenith and signed off by PWM IC

Dealer negotiates with fund managers directly (enables dealer to achieve sharper mandate pricing from fund managers)

Branded documentation (white label PDS and short form PDS for models)

Branded website portal, branded reporting, branded welcome and password letters, application form etc

Training, rollout and transition of clients

Launch date – 1 December 2012

Structure

Premium Wealth Management Limited

AFSL holder & HUB 24 badge agreement

Premium Accounting Group Pty Ltd

Premium Asset Management Pty Ltd

Stake in Premium China Fund

Premium Investment Management Pty Ltd

CAR of PWM – manager of funds and portfolios

Stake in Emerald Club Limited

Model PortfoliosINCOME ASSETS

Australian Cash

Macquarie Cash Management Account

Australian Fixed Interest

BlackRock Indexed Australian Bond Fund

International Fixed Interest

PIMCO EQT Global Bond Fund

Alternative Fixed Interest

Macquarie Income Opportunities Fund

Total Income Assets

GROWTH ASSETS

Australian Shares

S&P/ASX 20 Portfolio

Dalton Nicol Reid Australian Equites High Conviction Portfolio

IML Australian Share Fund

Ausbil Australian Emerging Leaders Portfolio

International Shares

iShares S&P Global 100 ETF

Magellan Global Fund

Walter Scott Global Equity Fund (Hedged)

IFP Global Franchise Fund (Hedged)

Premium Asia Fund

Australian Property

Vanguard Property Securities Index ETF

Cromwell Phoenix Property Securities Fund

International Property

ING Wholesale Global Property Securities Fund

Alternatives

Winton Global Alpha Fund

Magellan Infrastructure Fund

AQR Wholesale DELTA Fund

Total Growth Assets

Model Portfolios

Asset Class Conservative ModeratelyConservative

Balanced Growth HighGrowth

IncomeAssets

85% 70% 50% 30% 15%

GrowthAssets

15% 30% 50% 70% 85%

Total 100% 100% 100% 100% 100%

Weighted MER

0.29% 0.40% 0.49% 0.65% 0.78%

Q: Do we need an additional model e.g. for a pension client?Q: Do we need any additional risk profile models e.g. 40/60?Q: Do you want to construct your own model portfolio/s?

Thank You

Questions?