WealthTouchTEAM WORKBOOKDecisions and Notes for Modules 1 – 5

BSMART Business Simulation Management and Relationship Training

Vision, Mission & StrategyThe Foundation of a Business

MODULE ONE

Your Vision

Preeminent provider of family office like services for executives, business owners and families in the $2M - $10M range within the New Jersey/New York region. Aspire to grow the business to $3B AUM in the next 5 years through organic and inorganic growth with expansion possibilities in South East region. We seek to create an organization that provides a career path for our associates that rewards then for their participation in our growth achievements.

A vision statement describes what you want your firm to look like in the future, typically three to five years out, or longer, and is both an internal and an external message. If you keep it front and center, it can help you stay focused on your goals. It can also help inspire and motivate your staff, and instill confidence in clients that you know where you want to be in the future.As you craft a vision statement for your firm, ask:• What do we aspire to become in three to five years?• What does success look like for our firm over this period?• What does our end-state look like?

A vision statement describes the future state you are looking to create – your desired end-game for the firm in 2020.

Your Mission

The WealthTouch Mission:To secure and grow the wealth of our clients and future generations.To be the first point-of-contact for any financial decision in their lives.

A mission statement describes why you are in business, and is primarily used internally. It plays an important role in helping you assess your activities and determining if they are in line with your core purpose. It can be used to “sanity check” what you may be considering doing – if activities stray from your core purpose, you may decide not to do them or to reevaluate your mission.As you craft a mission statement for your firm, ask:• What is our purpose for being here? Why do we do what we do?• What needs do clients have when they come to us?• What are the most significant strengths of our business?• Why do clients choose our firm over other firms? What are our

differentiators?

A mission statement describes why the organization exists – its core purpose.

Your Strategy

WealthTouch – We specialize in solving the complex wealth needs of senior executives, law firm partners, business owners and real estate executives. We help our clients navigate the financial waters with strategies to grow and protect their assets during their career, during their transition to retirement and as they decide their legacy for future generations and charitable organizations.WealthTouch – With investment, financial planning, tax and real estate expertise, WealthTouch is passionate about wealth management and bringing our resources and over 130 years experience to provide exceptional service and solutions to our clients.WealthTouch – Our employees are active members of the community in Northern NJ where we are proud to be the largest RIA.

Questions that may help:

• What makes us better than the competition?

• Why do customers choose us?

• What makes us unique?

• What do we have that others do not?

• What do we do that cannot be replicated?

• Why are we successful?

• What created our success to date?

Our competitive advantage is…

SWOT Analysis

4

Strengths Weaknesses

• Experience/Reputation - Strong Team of Partners with over 130 years of investment advisory experience.

• Underinvested in Marketing & Business Dev – Marketing & BD expense < 1% of firm revenue

• Total Turnkey Solution – True Comprehensive Wealth Mgmt Services

• Underinvested in Technology – Technology expense 1% of firm revenue

• Access to Capital – Partnership includes Private Equity firm CCP

• M&A Experience - Original Partners have little experience in this area (inorganic growth)

• Niche Client Target Profile - Firm has a clear and well defined target client profile

• Organic Growth - Firm lacks true organic Business Development strategy

• Service Delivery/Client Experience – well staffed and trained service team provides high touch experience

• Client Target Profile – have one in place, but should we redefine? Is our footprint expanding, etc?

• Investment Offering/Resources - deep level of expertise including Alternatives & Stock Plan Services

• Compensation Plan – is the plan aligned with firms business goals?

• Location – strong new business opportunities located in NY/NY metropolitan area

• Geographical Focus – Partners need decide on the future business model/location strategy

• Top 100 Barron’s Advisor – firm partner recognized as a top investment advisor

• Defined Roles & Responsibilities - need to review & then determine associates roles & org structure

• Strong P&L – compared/relative to reported Ensemble metrics as well as Fidelity BM results

• Aging Client Population – need to define strategy to retain existing clients and approach to Gen X&Y

• Succession Plan – aging Partners and no clear internal transition plan.

SWOT Analysis

4

Opportunities Threats• General movement away from traditional

brokerage/banking, toward “conflict-free” advice.

• Banks and BDs adopting “wealth management” services and identifying themselves as “wealth advisors.”

• No clear next steps by regulators of applying fiduciary standard to brokerage/wire house industry – gives RIAs a competitive leg-up vs. BDs.

• Potential movement by regulators to apply fiduciary standard to BDs could neutralize RIA’s competitive edge in terms of standard of customer care.

• Greater activity from roll-up/aggregator firms providing capital for investment in infrastructure, and/or M&A.

• Deployment of capital from parent subject to the whims of senior management team could be contrary to that of WealthTouch.

• Strong/re-bounding real estate market.• General volatility of real estate market –

downturn such as 2009 could spook investors.

• Ability to manufacture proprietary real estate funds/alternative investments.

• Investor demands for transparency in alternative investments, compliance costs.

• Technology enhancements providing scale at an exponential rate.

• Changing demographics of investors and future wealth (Gen X/Y); proliferation of “robo-advisors.”

George SLIDE to add couple sentences at bottom

Initiatives and Notes

Initiatives for Improvement

The responsibility of these 5 initiatives can be discussed, but we felt this is a great starting point. Some are also listed here as there are some “unknowns” within the firm – see #2 on Comp Plan and Org Structure, understanding the number of “Advisors” we have on staff that includes or does not include the “Professional Staff” is an example.

Last but not least, large firms require a sound Compliance & Risk Strategy and we felt this is a year to year as well as long term strategic initiative that must be documented, planned for and tracked.

Write down and agree on Strategy initiatives in your firm and elect a “champion” for each initiative.

Notes

Improvement Opportunity Who Will Complete

1. Make Better Use of Tech & Enhance Internal Infrastructure Chuck

2. Evaluation of compensation plan and organizational restructuring Art

3. Develop/Define a true growth plan strategy (organic, inorganic, geographic expansion) Paula

4. Develop a Succession Plan Price

5. Compliance/Risk Strategy Carry

GrowthBuilding the Firm

MODULE TWO

CHARACTERISTICS OF THE IDEAL CLIENT

CHARACTERISTICS OF THE NOT-SO-GREAT REFERRAL

Business YouWould LikeTo Win

$2M - $10M invest amounts Small balance, low revenue producing

Senior Exec, Partners, Real Estate Executives

Short term results driven

Complex Wealth needs (tax, legal)

History of switching financial advisers

Referencable

Large network of family, friends, and professionals

CHARACTERISTICS OF THE IDEAL COI

CHARACTERISTICS OFTHE NOT-SO-GREAT COI

COI RelationshipsYou Would Like To Have

Compliment WealthTouch services

Duplicating/overlapping services

”Succeed together” mindset Numerous COI relationships already exist

Passion for what they do Unable to articulate story or mission

Potential acquisition for WealthTouch

Growth mode

Territory leader

Ideal Profile

Initiatives and Notes

Initiatives for Improvement

Above, we’ve identified the underlying improvement opportunities and initiatives which roll-up into the overall growth plan strategy we identified as one of our top 5 strategic initiatives: to develop and define a true growth plan strategy (organic, inorganic, geographic expansion).

Write down and agree on Growth initiatives in your firm and elect a “champion” for each initiative.

Notes

Improvement Opportunity Who Will Complete

1. Create a business development organization via compensation goals, incentives and an organizational structure Human Capital audit.

Paula

2. Explore inorganic growth thru acquisition or merger. Price

3. Develop external lead sources i.e. WAS, COIs, professional organizations related to our client base. Carry

4. Build infrastructure (i.e. technology and marketing materials) as well as procedures to support growth. Chuck

5. Institute a business development culture through training and best practices; referral growth strategies targeting ideal client profile and existing clients.

Carry

Notes

Staffing and CompensationAttracting, Retaining and Organizing Talent

MODULE THREE

Organizational Chart

Draw your firm’s organizational chart. Label the positions.

Compensation Philosophy

WealthTouch’s compensation philosophy demonstrates our commitment to how we value employees. It is designed to be consistent and provide a frame of reference for all compensation discussions.

The goal of WealthTouch’s compensation philosophy is to attract, retain and motivate employees. Wealthtouch’s compensation philosophy is designed to track the development of skills and reward employee proficiency, rather than longevity. To accomplish these goals, we use a mixture of three main components of a compensation plan: base salary, variable incentive pay, and non-cash award pay.

• Competitive Base Salary – not overly aggressive, but a base that an employee could find elsewhere, though slightly over market.

• Variable Incentive Pay – based upon pre-defined metrics regarding employee skills, proficiency, and performance. Designed simply so that high performance employees are highly compensated.

• Non-cash Award Pay – longer-term incentive for phantom stock options, and possibility of ownership in WealthTouch.

WealthTouch’s compensation plan is consistent, will not discriminate in any way, and will not be arbitrary. In addition, WealthTouch communicates its compensation philosophy to all associates throughout the organization.

What is your compensation philosophy?

Initiatives and Notes

Initiatives for Improvement

Above, we’ve identified the underlying improvement opportunities and initiatives which roll-up into the overall Human Capital strategies we identified as two of our top 5 strategic initiatives: evaluation of compensation plan, organizational structure and develop a succession plan.

Write down and agree on Human Capital initiatives in your firm and elect a “champion” for each initiative.

Notes

Improvement Opportunity Who Will Complete

1. Human Capital audit (review of employees, productivity, responsibilities) Art

2. Deliver/refine organizational structure with clearly defined roles and responsibilities including specific measurable growth goals per employee.

Art

3. Creation of professional development plans (i.e. sales and technology training) Wendle

4. Compensation alignment/audit Art

5. Creation of succession and career paths for roles. Wendle

Handouts in the Appendix

• Advisor HR Solutions• Sample Compensation Profiles

Notes

Operations and Technology

MODULE FOUR

Role of Operations

Service and Deliverables

Component-level Role

• Estate Planning

• Financial Planning

• Tax Planning

• Business Lending /Loan Negotiation

• Retirement Planning

Financial Planning Investment Management

• Client/Prospect-data gather for asset allocation • Rebalancing and Trading

• Taxes: gather tax info/complete return • Investment Research/ Alts

• Estate Planning-data gather/draft and execute plan

• Portfolio Construction/Reconcilliation

• Retirement Planning • Implementation

• Risk Profile • Produce customized quarterly reports

List and Documents Services

Process

PurposeTo execute the administrative tasks of account servicing and implement decisions made between the advisor and the client. Our reporting is intended to support our investment decision making . WeathTouch will closely monitor the portfolio and send quarterly performance reports. Reports will provide a detailed illustration of current holdings vs target allocations for each asset class. We will continuously review , consult and customize our strategies to the unique needs of each client.

Budget$164K- spread out across all technologies: PMS, CRM, Billing, Document Mgmt, Financial Planning. Our current spend is $47. Our goal for this initiative is to align our technology investment with Best Managed Firms that have revenue of at least $5MM

Resources Evaluate how well resource components are satisfied.

With our firm size of 26 individuals, we are near the benchmark per the Fidelity RIA benchmark for $1b+ firms. That being said, with the additional investment in technologies, our goal is to take advantage of any excess human capital capacity to dedicate to growth initiatives, technology initiatives and improvements in our high-touch servicing of clients.

Available Scalable

Attainable Sustainable

Portfolio Management & Reporting Document ManagementCRM Financial PlanningClient ReportingFee Billing

Initiatives and Notes

Initiatives for Improvement

Our vision for this Operations initiative is to better align our high touch service with the ever changing and evolving needs of our clients. Because of our customized/family office approach to client relationships, we’ll need to make sure we leverage technology, when applicable, and identify a areas where a scalable and repeatable process can be utilized to meet the demands of our clients.Our current technology spend is $47k. We would like to align our technology spend with ‘Best Managed’ firms in this area that have at least $5MM in revenue. Therefore, our budget is approximately $164K.

Write down and agree on Operations initiatives in your firm and elect a “champion” for each initiative.

Notes

Improvement Opportunity Who Will Complete

1. Technology Audit Chuck

2. Service Offering Audit Wendle

3. Update Written Policies and Procedures as well as Document Workflows

Wendle

4. Explore potential outsourcing opportunities e.g., compliance, data reconciliation, cloud computing

Price

Handouts in the Appendix

• Six Tell-Tale Signs That Your Business Processes May Need Attention

Financial ManagementMaking the Numbers Work

MODULE FIVE

Initiatives and Notes

Initiatives for Improvement

Write down and agree on Financial initiatives in your firm and elect a “champion” for each initiative.

Notes

Improvement Opportunity Who Will Complete

1. Assess revenue per staff member Price

2. Evaluate productivity and create a plan for utilizing capacity based on Human Capital and Service Offering Audit

Paula

3. Assess investment in marketing and technology Chuck

4. Asses and re-evaluate advisor (non-partner) compensation Art

Handouts in the Appendix

• Key Drivers of Firm Valuation