The Rules of Engagement

The Rules of Engagement An industry report card based on Advisor Impact s Economics of Loyalty research February 2013 Created by: Sponsored by:

The Rules of Engagement When we get it right, measurement is not only a way to keep score, but a way to keep us focused on what is most important. The Client Engagement Index was designed to do just that provide the industry with an annual assessment of performance built around a single primary index client engagement and a series of additional, related, metrics that reflect what is most important to both clients and the industry as a whole. The Client Engagement Index, and this report, is based on data collected through Advisor Impact s Economics of Loyalty research, conducted annually in the United States, Canada and the United Kingdom. This report highlights the findings from 1,018 investors surveyed in Canada in October, 2012. All respondents worked with a financial advisor, made or contributed to the financial decisions in the household and met household asset criteria that were reflective of the clients with whom financial advisors typically work. 1 We believe that client engagement is a critical driver of success in our industry. When engagement is high, clients are among the most satisfied and loyal and are helping to drive growth through referrals. It s a classic win-win. I hope this report, and the reports and whitepapers to follow, helps you focus on what matters most to your clients and your business. It may serve as a wake-up call and cause us to question traditional approaches to growth. At the same time, it should serve to give advisors a strong pat on the back for the work they have done to drive engagement. We welcome and look forward to your input or comments. Julie Littlechild CEO, Advisor Impact For more information on this study or Advisor Impact: Phone: 877.686.0660 x222 Email: info@advisorimpact.com Web: www.advisorimpact.com 1 See Appendix 1 for an overview of methodology and key demographics

Canadian investors have spoken. The Rules of Engagement And the words they re using to describe their Investment Advisors may surprise you. Results of The Economics of Loyalty*, a national survey of investors, show that despite four years of unprecedented market volatility, Canadians: But these words don t surprise us. Canadian investors value their Investment Advisors who care about their financial future, understand their priorities, listen to their concerns, and help them address financial concerns at every stage of life. Canada s investment professionals help clients plan for, and stay on track to reach, their financial goals across generations. Good marks for Advisors, good news for Canada. The survey results confirm that Canadian investors, guided by their professional Advisors, are confident in their decision-making and willing to invest. This is good news for Canadian companies raising capital and for the competitiveness of Canada s capital markets. The Investment Industry Association of Canada is proud to have partnered with Advisor Impact on The Economics of Loyalty study. Investment Industry Association of Canada Representing Canada s investment professionals * The Economics of Loyalty, a survey commissioned by the IIAC and conducted by Advisor Impact, examines input from 1,018 investors across Canada, gathered between September and October 2012. The sample includes investors who work with an Investment Advisor, make or contribute to the financial decisions in their household and meet specific household asset criteria.

The Rules of Engagement 1 The Client Engagement Index The Advisor Impact Client Engagement Index is a composite number that measures both the quality of client relationships and the impact those relationships have on growth. The Client Engagement Index, itself, is presented in the context of several other metrics which we believe are both related and important in providing context for industry performance the Essential 13. By presenting the additional information we recognized that success, for both advisors and clients, is more complex than any single metric can communicate. The Essential 13 focuses attention on: what clients are experiencing with respect to clarity, confidence and control in their financial lives; how clients perceive advice and advisors in contributing to a successful financial future; how advisors are performing in delivering on a strong client experience; the extent to which advisors are building relationships which are both meaningful and profitable, defined as engaged client relationships; and how all of that comes together to reflect client trust in advisors and the industry. The chart below shows the Client Engagement Index and the supporting data points for the industry, highlighting the impact and importance of client engagement. The data reflects a top two box score, which is typically a four or five out of five. While it is common to focus on the top two box score as an assessment of overall performance, it is reasonable that advisors may want to set a goal of reaching an even higher standard. A complete breakdown of the data below is included in Appendix 2. The Client Engagement index and the Essential 13 Client state of mind Clarity 97% of clients are very clear on their financial goals. Confidence 86% of clients feel very confident they will reach their goals. Control 86% of clients feel in very high control of their financial futures. Role of Advisor Advice 86% of clients say advice is critical in reaching their goals. Leadership 65% of clients see their advisor as a leader. Client Experience Satisfaction 86% of clients are satisfied. Loyalty 88% of clients are extremely likely to continue working with their financial advisor. Likely to Refer 81% of clients say they are likely to refer. Have Referred 25% of clients say they have referred in the last 12 months. Client Engagement Client Engagement Index 23% of clients are Engaged. Engagement Outcomes Value/Market 78% of all clients and 93% of Engaged clients say their advisor adds value beyond market performances. Value/Fees 63% of all clients and 84% of Engaged clients recieve high value relative to fees paid. Trust 84% of all clients and 98% of Engaged clients have a high level of trust in their primary advisor. Note: Shows top two box score for all metrics which are scaled.

The Rules of Engagement 2 Industry Report Card Taking all key metrics into consideration, the story is one of highs and lows. If you view the glass as half empty, the results may seem disappointing. If you view the glass as half full you will marvel at the industry s success in achieving such a high standard of performance, while recognizing that there is always room for improvement. Client State of Mind: Have we, as an industry, succeeded in helping clients feel confident and in control of their financial future? While clients who work with advisors have clarity regarding their goals, they are clearly feeling the negative impact of the downturn, impacting their level of confidence and control. As an industry we need to do more to help clients in creating a more positive vision for their own financial futures. Role of Advisor: Do clients feel that their advisor is actively helping them reach their goals? Advisors receive high ratings with respect to the role of advice in helping clients meet their goals. The perceived role of advice and the acknowledgement that advisors are playing a leadership role in the lives of their clients is a positive reflection on the industry. Client Experience: How are advisors performing, using traditional metrics, in delivering on the client experience? Clients are generally satisfied and loyal; however, far fewer meet the higher standard of demonstrating a willingness to refer their advisor to a friend or colleague. We need to set a higher standard for assessing performance, one that is deep enough to cause clients to share their experience with friends and family. Client Engagement: What percentage of clients are truly engaged as measured by satisfaction, loyalty and referral activity? Client engagement has increased since 2011, creating a strong base of deeply engaged clients. While engagement is a naturally low number, given the way in which it is calculated (details are included in this report), the upward trend is a very positive indicator. Engagement Outcomes: What is the impact of engagement as reflected on the most important measures of success? The impact of engagement on both perceived value and trust are very clear. In general, we have work to do in enhancing the value proposition, which begins with helping clients to fully understand and appreciate the value that is being delivered above and beyond market performance. The research demonstrates the connection with value, trust and engagement; as such, the balance of the report will focus on defining, measuring and driving client engagement.

The Rules of Engagement 3 The Argument for Client Engagement We believe that client engagement is the new standard for advisors an aspirational goal that should drive all activity. Traditionally, the industry has used a single metric such as satisfaction, loyalty or likelihood to refer, to measure the quality of client relationships. The reality is that no single measure captures the complexity of the client/advisor relationship. For example, a client who rates high on loyalty, because they plan to continue working with an advisor, may not be highly satisfied. Further, none of the traditional metrics incorporate growth, including the popular Net Promoter Score. A client may be comfortable referring and, in fact, say that he or she is likely to refer, however that does not necessarily mean that a referral will actually be made. We argue that actual referral activity must be incorporated into any assessment of performance for two reasons: 1. There is a clear difference between being comfortable doing something and actually doing it. It can be argued that those clients who took the tangible step of recommending their advisor reflect a deeper and more successful relationship. It is one thing to feel satisfied in a relationship with a financial advisor and quite another to feel the trust and confidence to refer that individual to a friend, colleague or family member. As the chart clearly shows, satisfaction, likelihood to refer and comfort referring do not necessarily translate into actual referrals. Percentage who provided a referral in last 12 months 8 6 4 2 39% 35% 36% Very Satisfied Very Likely to Refer Client Group Very Comfortable Referring Q: Have you provided a referral to your advisor in the last 12 months? 2. The most successful advisory businesses are built on a strong foundation of both deep client relationships and growth. Neither exists in isolation and both are critical to long term success for both the client and the advisor. To that end, client engagement reflects a measure that incorporates both the quality of the client experience and actual growth.

The Rules of Engagement 4 Client Engagement: Defined Throughout this report you will see results that compare and contrast Engaged clients to all others. Client Engagement is examined using cluster analysis, which is a methodology to identify groups of clients which are similar to one another but differentiated from others, based on how they respond to a set of core questions. In this case, engagement incorporates feedback on: loyalty; satisfaction; share of wallet; and referral activity. 5 42% 4 38% Percentage of respondents 3 2 18% 16% 22% 24% 18% 23% 1 Disgruntled Complacent Content Engaged 2011 2012 By clustering clients in this way, we have created a shortcut to assess the quality of client relationships. As you can see, 23 percent of clients were identified as Engaged, a five percent increase from the last Canadian study in 2011. Client Engagement and Referral Activity Once clients have been clustered, the vast differences in their referral behaviour are amplified. While referral activity is included in the definition of engagement, it highlights that growth through referrals is attributable to a relatively small group of clients. All referrals are made by just 25 percent of clients. Further, by clustering clients we can clearly see the vast disconnect between being comfortable providing a referral and actually doing so. Both findings are important in helping us target and refine our referral strategy.

The Rules of Engagement 5 10 99% 10 Percentage of respondents somewhat or very comfortable/responding 'yes' 8 6 4 2 42% 84% 89% 5% Disgruntled Complacent Content Engaged Comfortable referring Has referred Q: How comfortable are you providing a referral to your advisor? Q: Have you provided a referral to your financial advisor in the last 12 months? The importance of the referral potential uncovered by the study cannot be underestimated. Not only did all 23 percent of Engaged clients say they had provided a referral, each had provided an average of two referrals in the last 12 months. 5 Percentage of Engaged respondents 4 3 2 1 39% 43% 8% 3% 7% 1 2 3 4 5 or more Number of referrals provided Q: How many people have you referred in the last 12 months?

The Rules of Engagement 6 Client Engagement and the Advisor Relationship Engaged relationships are deeper relationships. Across the board, Engaged clients are not only more satisfied and loyal but are also more likely to see a stronger connection between the advice they receive and reaching their financial goals. All clients Engaged clients Thinking about your most important financial goal, how important do you consider the advice you receive from your advisor in reaching that goal? (Percent rating as critical ) 39% 53% Not surprisingly, Engaged clients also recognize advice as separate and distinct from market performance and ascribe greater value to advice relative to the fees they pay. They might be described as more sticky relationships, as a result. One of the most profound differentiating factors with an Engaged client relationship is the role of advisors as leader. Eighty-eight percent of Engaged clients describe their advisor as a strong leader, dropping to 29 percent among disgruntled clients. Leadership is clearly a powerful descriptor, suggesting an active role in guiding the client through the, often complex, decisions in his or her financial life. Among the leadership qualities rated in the study, provides guidance, is proactive in managing our relationship and helps me focus on the long-term are ranked as most important by clients. The table on the next page shows a top box score (5 out of 5) on satisfaction with each of the leadership qualities that were examined, shown as the percentage who agrees that their advisor is performing on that attribute. It is interesting to note that there are fairly wide gaps between the average of all participants and Engaged clients on all attributes. Leadership is very clearly about taking an active role and helping clients to focus on those things that will impact their financial futures. It is not surprising that we see the most striking differences in leadership during a market downturn, when an advisor s resolve is most sorely tested.

The Rules of Engagement 7 Leadership Qualities Importance Rating (out of 5): All Strongly agree: All Strongly agree: Engaged Gap Provides guidance 4.2 49% 67% 18% Helps me focus on long-term 4.0 5 69% 19% Is proactive in managing our relationship 4.0 4 57% 17% Helps me make difficult decisions 3.9 37% 56% 19% Provides reassurance 3.8 41% 61% 2 Provides me education 3.8 37% 55% 18% Engages me in difficult conversations about my financial future 3.8 33% 55% 22% Taking Action If client engagement does, in fact, represent the ideal balance between the quality of relationships and growth, then driving engagement should be the focus. The goal of engagement analysis is to isolate ideal clients those who reflect what advisors are seeking to achieve in all relationships. From there we can reverse engineer to uncover the drivers of engagement to help advisors push more clients into this category. You ll find those drivers summarized below. The Drivers of Engagement In assessing the drivers of engagement and the path from merely satisfied to actively engaged, we can identify several key factors, drawing on this study and similar studies conducted annually in the United States and the United Kingdom. 1. As we move toward engagement, it becomes clear that great service is a table stake something that advisors just need to get right in order to have a base of satisfied clients. Service would include the fundamentals such as frequency of contact and responsiveness. And while service may sit at the foundation, it is a critical building block of engagement a necessary, but not a sufficient, condition of deep relationships. 2. As we move further toward engagement we see an offer and a relationship that is characterized by increased personalization. The unique needs of the client and his or her circumstances drive the way in which service is delivered. Advisors have a process to gather input from clients and focus on getting the fit right.

The Rules of Engagement 8 3. As we move even further toward engagement, we see the scope of the offer expanding beyond investment management to a more holistic approach. It moves beyond the individual client to his or her family and across generations and beyond the financial advisor to incorporate other professional advisors. Engaged Personalized Relationship Beyond investments Beyond individual client Beyond advisor Offer Service Satisfied Standardized From a tactical perspective, the model above suggests that advisors need to apply an engagement filter when thinking about their businesses. Specifically, there are five areas you should evaluate and refine as necessary. The specifics of execution will depend on the advisor and the needs of his or her clients no two businesses are exactly the same. 1. The right offer for the right clients Action Items Defining the ideal client Gathering client feedback 2. Laying a strong foundation Defining and communicating service standards 3. Beyond investments: the scope of the offer 4. Beyond individual client: multi generational planning Implementing a financial planning approach Providing services that extend beyond the individual clients to actively include multiple generations 5. Beyond individual advisor: integrating your professional network Providing services that are coordinated across clients professional advisors

The Rules of Engagement 9 1. The right offer for the right clients It may seem obvious, but worth noting that if the fit is not right between advisor and client, the chances of engagement are slim. Further, if the offer does not reflect what is important to those clients, the chances of engagement are further reduced. On the subject of fit, clients are focused on investment philosophy, values and communication style. Engaged clients are more likely to focus on fit with respect to investment philosophy, values, communication style and personality than other clients. This reflects the increasingly personal relationships between advisor and client as we move to Engaged. TAKE ACTION: Define your ideal client, establish acceptance criteria and assess fit when meeting with prospective clients. 10 8 Percentage rating critical 6 4 54% 43% 47% 35% 47% 34% 27% 2 18% 1 5% 9% 4% Investment Philosophy Values Comunication Style Personality Similar lifestyle/ interests Similar background Engaged Clients All Clients Q: How important to a successful relationship with your advisor is finding a close or perfect fit on each of the following? The search for right fit focuses our attention on the composition of a client base the who. The next logical question should focus on the what what does a meaningful offer look like for these individuals. There is, arguably, one group of individuals that have the answer to the question of what and that is the clients themselves. Not surprisingly, then, we find a strong connection between having a process in place to gather input from clients and client engagement. Engaged clients are considerably more likely to have been asked for their input on the service provided by an advisor. Thirty-five percent of those Engaged clients, who were asked for feedback, provided that feedback through a formal survey.

The Rules of Engagement 10 10 Percentage responding 'yes' 8 6 4 38% 46% 46% 73% 2 Disgruntled Complacent Content Engaged Q: Has your financial advisor ever asked you for feedback on the service that he or she provides? Seventy-four percent of Engaged clients indicated that it was important or critical to be asked for their input on the service being provided by their financial advisor. TAKE ACTION: Gather feedback from clients to assess what they need, want and expect in their relationship with you. 2. Laying a Strong Foundation A strong service proposition is not engaging, in and of itself, but it is a necessary foundation for engagement. At a minimum, that foundation includes defining the scope of the service being provided, the frequency of direct contact and, potentially, the degree to which educational communications or activities will be employed. Engaged clients do tend to both expect and receive more review meetings.. Average number of meetings (expected) Average number of meetings (actual) Disgruntled Complacent Content Engaged 2.7 2.8 3.0 3.3 2.6 2.8 3.0 3.5 TAKE ACTION: Clearly define service standards, communicate through a service agreement and review annually with clients.

The Rules of Engagement 11 As important in crafting a service delivery plan, is communicating it to clients. Engaged clients are more likely to indicate that service standards have been communicated. 10 8 Percentage responding yes 6 4 2 1 37% 7% 54% 7% 8% 58% 67% Disgruntled Complacent Content Engaged Informally Written agreement Q: Has your advisor outlined the level of service you can expect in a 12-month period (e.g. the number of review meetings you can expect)? 3. Beyond investments: The Scope of the Offer Client engagement is a holistic concept and tends to exist when an advisor takes a broad view of the relationship. The first aspect of that approach is tied to financial planning or the existence of a written financial plan. Sixty-two percent of Engaged clients say they have a written financial plan, dropping to 44 percent for all other clients. Advisors with more Engaged clients will, therefore, tend to look beyond investment management at a more holistic offer. TAKE ACTION: Help clients articulate and document a vision for their financial future.

The Rules of Engagement 12 10 8 Percentage responding yes 6 4 3 39% 43% 62% 2 Disgruntled Complacent Content Engaged Q: Do you have a written financial plan? More than the mere existence of a plan, Engaged clients are more likely to place a higher value on the plan in helping them reach their financial goals. 10 8 Percentage of respondents 6 4 13% 33% 31% 47% 2 36% 55% 53% 39% Disgruntled Complacent Content Engaged Somewhat valuable Very valuable Q: How valuable is the written plan in helping you reach your financial goals? 4. Beyond individual client: multi-generational planning When examining client engagement we find an underlying theme that is best characterized by a holistic approach to the client s life and a focus on those things that matter most. As a result, Engaged clients are more likely to work with an advisor who manages wealth across the family.

The Rules of Engagement 13 6 5 Percentage responding yes 4 3 2 28% 27% 29% 42% 1 Disgruntled Complacent Content Engaged Q: Does your primary advisor provide a service that helps you with managing or transferring your wealth across generations, often referred to as family wealth management? The connection between engagement and multigenerational planning is supported when clients with adult children are asked if their advisor works with their children. Nearly twice as many Engaged clients say their adult children work with their primary advisor. That said, there is still a substantial opportunity. TAKE ACTION: Actively involve the extended family in the wealth management process. 5 4 Percentage responding yes 3 2 11% 11% 15% 28% 1 Disgruntled Complacent Content Engaged Q: Does one or more of your adult children work with an advisor (n=those with adult children). Show percentage working with the same advisor.

The Rules of Engagement 14 5. Beyond individual advisor: integrating your professional network Advisors seeking to engage clients think beyond their own role in a client s financial life. Most clients work with multiple advisors who impact their overall finances, including but not limited to their accountant and lawyer. TAKE ACTION: Play the quarterback with clients, keeping other professional advisors informed and involved. 10 8 Percentage of respondents 6 4 28% 41% 2 12% 17% Disgruntled Complacent Content Engaged Q: Which, if any, of the following best describes the role that your financial advisor plays relative to other professional advisors with whom you work (e.g. accountant or lawyer)? Shows My advisor plays a central role in my financial life, coordinating across my other professional advisors The Impact of Engagement The Client Engagement Index includes measures of engagement and also highlights the impact of engaged relationships. Clients who are engaged ascribe higher value to the advisory relationship and higher levels of trust. Value We measure perceived value in two ways. The first approach asks clients to consider value over and above market performance, which speaks to the role of an advisor above and beyond the value of the market itself. Clients often define the value they receive from their advisor as more than investment performance. Fully 93 percent of Engaged clients agree that their advisor adds value above and beyond market performance. Notice the striking difference in the way in which Engaged clients view value relative to market performance among those who strongly agree. They are dramatically more likely to separate the value of their advisory relationship and investment

The Rules of Engagement 15 returns. This does not mean that Engaged clients are happy to have poor investment performance. In fact, clients who are very dissatisfied with performance are likely to be Disgruntled. And while dissatisfaction with investment returns may land someone in the Disgruntled category, it does not explain if a client will be Complacent, Content or Engaged. That is, clients do not become increasingly engaged with higher performance. The implication? Because Engaged clients take a broader view of value, this creates more sticky relationships through the ups and downs of the market. 10 8 Percentage of respondents 6 4 34% 39% 59% 2 1 15% 48% 47% 34% Disgruntled Complacent Content Engaged Somewhat agree Strongly agree Q: To what extent do you agree or disagree that your primary advisor adds value above and beyond market performance? A similar trend is found when we examine value relative to fees, arguably one of the biggest tests of value. It is interesting to note that a startling 37 percent of clients do not know how much they pay their advisor in fees so would not be in a position to gauge value relative to fees. In general, however, investors see the value they receive from their advisor as being consistent with the fees they pay, with 85 percent of Engaged clients rating value as high or very high. The implication? By understanding the drivers of engagement, we can understand the drivers of value. Those activities will help create deeper and more entrenched client relationships and are different from a focus on satisfaction.

The Rules of Engagement 16 10 8 Percentage of respondents 6 4 13% 11% 26% 2 5% 15% 52% 57% 58% Disgruntled Complacent Content Engaged Somewhat agree Strongly agree Q: How would you describe the value that you receive from your primary advisor, relative to the fees paid? Trust Trust may be the highest standard we can apply to any relationship and this is true of the relationship between client and financial advisor. Engaged clients place an extremely high level of trust in their advisors. Engaged 98% Content 94% Complacent 89% Disgruntled 39% 1 2 3 4 5 6 7 8 9 10 Percentage High/Very High Trust Q: How would you describe your level of trust in your financial advisor?

The Rules of Engagement 17 On a more sobering note, we finish by assessing the extent to which trust in one s advisor extends to create trust in the industry as a whole. It does not. No matter the engagement cluster, all clients reported a precipitous decrease in trust in the industry as compared to their advisor or the firm for whom their advisor works. Your primary advisor 84% 98% The firm for which your primary advisor works 77% 89% The financial services industry as a whole 32% 42% 1 2 3 4 5 6 7 8 9 10 Percentage High/Very High Trust Engaged clients All clients Moving Forward The Client Engagement Index reflects both incredible strengths and room for improvement. By focusing on these metrics, we are pushing the industry to accept nothing less than the highest possible ratings on those things that matter to clients and to their own growth. To that end, the Client Engagement Index and the Essential 13 are aspirational a call to focus on engagement both to ensure that clients benefit from deep and meaningful relationships and that the industry expands, profitably. What s Next? Look for Advisor Impact s Engagement De-Constructed report, providing in-depth analysis and insights on the information presented here. Look also for future whitepapers examining key issues and highlighting the tactics that advisors can use to drive engagement and growth.

The Rules of Engagement 18 Appendix 1: Methodology and Demographics The Economics of Loyalty: Canada was conducted via on-line survey from October 3 to October 22, 2012, utilizing recognized investor panels. 1,018 participants completed a survey, which took an average of 21 minutes to complete. The margin of error is +\- 3.1 percent. An additional 200 clients who work with an advisor in a bank branch were also surveyed; they are not included in this report. Respondents were filtered to ensure that all worked with a financial advisor and made/ contributed to the financial decisions in the household. A defined number of participants were included for the asset levels identified. The asset levels were determined based on an assessment of more than 100,000 surveys returned to Advisor Impact, as part of its Client Audit program, to reflect the typical distribution of clients working with advisors today. 10 8 Percentage of respondents 6 4 37% 24% 31% 2 9% $50,000 - $99,999 $100,000 - $499,999 $500,000 - $999,999 $1,000,000 + Q: What is the total value of your investable assets, excluding your home or employer pension plans? (Include mutual funds, stocks, bonds, GICs, RRSPs, etc.) 10 8 Percentage of respondents 6 4 36% 4 2 5% 6% 13% < 34 35-44 45-54 55-65 65 + Q: In what year were you born (compute age)?

The Rules of Engagement 19 10 8 Percentage of respondents 6 4 66% 34% 2 Male Female Q: Are you.(male/female)?

The Rules of Engagement 20 Appendix 2: The Essential 13 Client State of Mind: Engagement Cluster CLARITY: Which of the following best describes how you think about your financial goals? Engagement Cluster Total Disgruntled Complacent Content Engaged I m not at all clear on my financial goals; I don t have a picture of where I want to be I have a general idea of my financial goals; I still need some clarification I m very clear on my financial goals; I know exactly where I want to be 2.4% 6.3% 2.9% 0. 0.9% 33.4% 47.5% 34.2% 34.4% 20.8% 64.2% 46.2% 62.9% 65.6% 78.3% CONFIDENCE: How confident are you that you will reach your primary financial goal? Engagement Cluster Total Disgruntled Complacent Content Engaged Not at all confident 1.2% 6.3% 0.5% 0. 0. Not very confident 3.9% 5.7% 4.8% 3.3% 1.8% Neutral 6.9% 13.3% 5.8% 4.1% 6.6% Somewhat confident 45.9% 47.5% 49.1% 47.5% 38.5% Very confident 40.4% 23.4% 38.5% 43.4% 52.2% CONTROL: How confident do you feel that you can impact your own financial future? Engagement Cluster Total Disgruntled Complacent Content Engaged Not at all confident 1. 5.7% 0.3% 0. 0. Not very confident 3.4% 4.4% 4.5% 2.5% 2.2% Neutral 8.9% 16.5% 8.2% 7.8% 5.8% Somewhat confident 46.8% 41.8% 49.1% 56.1% 37.2% Very confident 38.8% 29.7% 36.9% 32.4% 54.9%

The Rules of Engagement 21 Role of Advisor ADVICE: Thinking about your most important financial goal, how important do you consider the advice you receive from your advisor in reaching that goal? Total Disgruntled Complacent Content Engaged Not at all important 2.2% 7.6% 1.9% 0.4% 0.9% Not very important 3.7% 13.9% 2.4% 1.6% 0.4% Neutral 7.2% 18.4% 7.4% 4.1% 2.2% Somewhat important 47. 35.4% 54.4% 47.1% 43.4% Critical 39.2% 24.1% 33.2% 45.5% 53.1% LEADERSHIP: Do you consider your advisor a strong leader? Total Disgruntled Complacent Content Engaged Yes 65.2% 29.1% 64.5% 69.7% 88.1% No 16.2% 51.3% 13.8% 9.4% 3.1% I don t know 18.6% 19.6% 21.8% 20.9% 8.8% Client Experience SATISFACTION: Please rate your overall level of satisfaction with your financial advisor. Total Disgruntled Complacent Content Engaged Not at all satisfied 2.3% 13.3% 0.6% 0. 0. Not very satisfied 2.8% 12. 1.1% 1.2% 0.4% Neutral 8.9% 32.3% 7.6% 3.3% 0.4% Somewhat satisfied 39.4% 33.5% 44.2% 46.3% 28.3% Very satisfied 46.5% 8.2% 46.4% 49.1% 70.8% LOYALTY: How likely are you to continue to use your financial advisor to manage your financial plan or portfolio in the next 12-24 months? Total Disgruntled Complacent Content Engaged Not at all likely 2.8% 17.7% 0. 0. 0. 2 2.4% 13.3% 0.5% 0. 0.4% 3 6.9% 26.6% 4.2% 2.9% 0.9% 4 18.7% 27.8% 19.6% 18. 11.5% Extremely likely 69.4% 14.6% 75.6% 79.1% 87.2%

The Rules of Engagement 22 LIKELIHOOD TO REFER: How likely is it that you would recommend your primary advisor to a friend or colleague? Total Disgruntled Complacent Content Engaged Detractors (0-6) 21.4% 65.2% 19.4% 12. 1.7% Passives (7-8) 38.1% 27.8% 43.3% 46.3% 42. Promoters (9-10) 40.6% 7. 37.4% 41. 70.4% HAVE REFERRED: Have you provided a referral to your financial advisor in the last 12 months? Total Disgruntled Complacent Content Engaged Yes 24.6% 13.3% 0. 0. 100. No 72.2% 81.6% 96. 96.3% 0. Engagement Outcomes VALUE AND MARKET PERFORMANCE: To what extent do you agree or disagree that your primary advisor adds value above and beyond market performance? Total Disgruntled Complacent Content Engaged Strongly disagree 3.6% 17.7% 1.1% 1.2% 0.4% Somewhat disagree 5.2% 21.5% 3.2% 2.5% 0. Neutral 11.7% 22.8% 11.9% 9. 5.3% Somewhat agree 40.6% 25.3% 47.7% 46.7% 34.1% Strongly agree 36.7% 10.1% 33.7% 38.5% 58.8% VALUE AND FEES: How would you describe the value that you receive from your primary advisor, relative to the fees paid? Total Disgruntled Complacent Content Engaged Very low 3.3% 18.4% 1.1% 0.4% 0. Low 6. 22.2% 3.4% 2.9% 2.2% Neutral 27.8% 39.2% 30.2% 28.7% 13.3% High 48.6% 15.2% 52.3% 57. 58.4% Very high 14.2% 5.1% 13. 11.1% 26.1%

The Rules of Engagement 23 Engagement Outcomes TRUST: How would you describe your level of trust in your primary advisor? Total Disgruntled Complacent Content Engaged Very low 2.4% 13.3% 0.5% 0. 0.4% Low 2.8% 15.2% 0.8% 0.4% 0. Neutral 10.5% 31.6% 9.5% 5.7% 1.3% High 36.7% 29.1% 41.6% 42.6% 27. Very high 47.4% 10.1% 47.5% 51.2% 70.8% TRUST: How would you describe your level of trust in the firm for whom your primary advisor works? Total Disgruntled Complacent Content Engaged Very low 1.8% 10.8% 0.3% 0. 0. Low 2.8% 10.1% 1.6% 0.8% 1.8% Neutral 17.2% 39.2% 14.9% 13.5% 8.8% High 43.2% 29.7% 47.5% 49.6% 39.4% Very high 33.3% 7.6% 47.5% 34. 49.1% TRUST: How would you describe your level of trust in the financial industry? Total Disgruntled Complacent Content Engaged Very low 5.3% 17.1% 4.2% 1.2% 3.1% Low 15.4% 22.8% 11.4% 16.8% 15. Neutral 45.6% 42.4% 48. 50.4% 38.9% High 26.3% 12. 28.9% 27. 31.4% Very high 5.5% 3.2% 5.3% 3.3% 10.2%