investment proposal - a home for independent brokers proposal builder sample.pdf · russell...

Investment proposal

PREPARED FOR:

Kevin MitchellNAME

March 01, 2013DATE

PREPARED BY:

Sally S. AdvisorFinancial ProfessionalWealth Management International, Inc.125 Main StreetAnytown, Washington 98401United Statesp (206) 555-3493f (206) 555-3499e [email protected]

A PERSONAL INVESTMENT PROPOSAL FORMITCHELL

.ANALYSIS CONDUCTED ON MARCH 01, 2013

Important information

2

This report analyzes your current securities portfolio and compares it to a portfolio of investments recommended by yourfinancial professional. Your financial professional has prepared this report using a web-based investment software and dataservice (the "Service") known as Russell Portfolio Builder (RPB) made available by Russell Investments. Please review thefollowing important information and disclosures regarding this analysis and the recommendations contained in this report:

• The Service is made available to your financial professional on an "as is" basis. The provider of the Service expresslydisclaims all warranties with respect to the Service and its output (or any results to be obtained from the use thereof),including but not limited to any implied warranty of merchantability or fitness for a particular purpose or use, accuracy,completeness, originality or non-infringement and all warranties arising from course of performance, course of dealing andusage of trade or their equivalents under the laws of any jurisdiction.

• Your financial professional assumes full responsibility for determining the suitability and fitness of any investmentstrategies, asset allocations or securities purchases or sales recommended in this report. While the Service includes arisk profile questionnaire that can be used to determine your tolerance for risk and to identify a target asset allocation thatis consistent with this risk tolerance, your financial professional may choose not to complete the questionnaire or mayoverride its results. This questionnaire is not an exhaustive treatment of risk tolerance, thus it might not accurately reflectyour actual risk tolerance. Russell Investments does not create, endorse or provide investment advice.

• In no event shall Russell Investments or its suppliers or their respective affiliates have any liability for damages of any kindbased on any use of RPB, including this report, or on any decisions, actions or analyses arising out of any use of RPB.

• Your financial professional and their firm is not affiliated with the Russell Investment Group or any of their subsidiaries.

IMPORTANT: The projections or other information generated by RPB regarding the likelihood of various investmentoutcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.

Limitations of Analysis and Risks of Investment• The results of the calculations used to generate this report may vary with each use of RPB and over time. Data values are

current as of the market close on the last business day before the report was generated, unless noted otherwise.• All personal information, including, but not limited to, investment horizon, risk preferences and current investment holdings,

utilized in this analysis is provided by you, the client, as input by your financial professional. Although deemed reliable,the accuracy of this information has not been verified. Accordingly, your financial professional, Russell Investmentsor its affiliates make no representations regarding the results that are dependent upon such information andhereby disclaim all warranties related to information and results are dependent hereon, including but not limitedto warranties of merchantability or fitness for any particular purpose.

• Allocations represent sample portfolios depicted by asset class. These allocations cannot be invested in directly. Actualcombinations of underlying assets selected by you will depend upon your investment objectives and will differ from theillustrated combinations. This material contains information concerning investments and asset classes other than thoseoffered by Russell Investments, its affiliates or subsidiaries. Neither Russell nor its affiliates are responsible for investmentdecisions made with respect to such investments or asset classes or the accuracy or completeness of informationregarding them. Allocations to underlying assets within an asset class may vary. Information about such investmentsand/or asset classes provided by you or your financial professional, although deemed reliable, is not guaranteed by youradvisor, Russell Investments or its affiliates. To obtain further information about such investments, please contact yourfinancial professional.

• This analysis was conducted using hypothetical estimates of future market conditions based upon Russell strategicplanning assumptions and with certain numerical applied models to that information. These assumptions may change overtime. This analysis is not meant to serve as a direct prediction regarding the future performance of your retirement assetsor the income and capital gains that they might produce. Similarly, they are in no way intended to predict or guaranteefuture investment performance of any sort.



Important information (continued)

3

• This asset allocation study uses parameters (expected return, risk, and correlations) that describe the future expectedbehavior of the investment opportunities being considered. By limiting the number of parameters to the broad assetclasses of US Equity, Non-US Equity, Global Real Estate, Commodities, Infrastructure, Alternative Strategies, FixedIncome, Global High Yield and Cash, each consisting of structurally distinct securities, Russell attempts to minimizeforecast uncertainty. Other investments not considered may have characteristics similar or superior to those beinganalyzed.

• As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times,unintentionally reduce returns. Rebalancing your portfolio may create tax consequences on the taxable portion. Financialmodels make assumptions regarding the actual mix of underlying assets and other parameters at a specific point in time,accordingly there are no assurances that the investment goals and objectives stated in this material will be met. Also,these models may not coincide with your actual investment results.

• The securities portfolios analyzed in this report were selected and entered by your investment professional. Otherinvestments not considered in this report may have characteristics similar or superior to those proposed by yourinvestment professional.

• Except as otherwise specifically noted, the portfolio analyses appearing in this report are based on style classificationsassigned to the securities within the applicable portfolio. They do not reflect the historic or projected performance of anyactual securities in the portfolio.

• This implementation plan is offered exclusively by your financial professional who is solely responsible for its contents andusage, and is an independent registered investment advisor or other financial intermediary authorized to provide clientswith access to various Russell investment products and services. They may also independently provide clients with variousother investment services. Nothing contained in this material is intended to constitute Russell's legal, tax, securities, orinvestment advice, nor an opinion regarding the appropriateness of any investment. The general information containedin this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensedprofessional.

• Should you decide to make use of this analysis in designing a portfolio, it is imperative you understand that—as a generalproposition—past performance of markets and asset classes is not representative of future results, the investment returnand principal value of an investment will fluctuate so that investments, when liquidated, may be worth more or lessthan their original cost. Current performance may be lower or higher than the performance data quoted. Strategic assetallocation and diversification do not assure profit or protect against loss in declining markets.

• The portfolio recommended by your investment professional is not FDIC insured, has no bank guarantee, and may losevalue.

• Please refer to the glossary at the end of this report for an explanation of investment terminology and to the notesaccompanying each analysis section of this report for an explanation of, and specific disclosures relating to, its content.

Russell Investments is a Washington, USA corporation, which operates through subsidiaries worldwide, and is a subsidiary ofThe Northwestern Mutual Life Insurance Company.

Russell Investment Company Funds and services offered through Russell Financial Services, Inc., member FINRA,part of Russell Investments.

RFS 9671

Revised March 2013

Securities and Insurance Products:NOT INSURED BY FDIC OR ANY

FEDERAL GOVERNMENT AGENCYMAY LOSE

VALUENOT A DEPOSIT OF OR GUARANTEEDBY A BANK OR ANY BANK AFFILIATE



Risk profile

4

The investment profile identifies your tolerance for risk while considering your investment needs and time horizon.

Analysis of the holdings in your current portfolio indicates that it is a equity growth portfolio. If you implement the proposedportfolio, the new portfolio will be considered balanced based on the underlying holdings.

The characteristics of each investor type are varied and can depend on many factors. The definitions below provide a generalillustration of various types of investors, and may not apply to your specific investment needs or situation.

CONSERVATIVE The portfolios that may best suit a conservative investor seek to provide current income and low long-termcapital appreciation.

MODERATE The portfolios that may best suit a moderate investor seek to provide high current income and moderate,long-term capital appreciation.

BALANCED The portfolios that may best suit a balanced investor seek to provide above-average capital appreciation and amoderate level of current income.

GROWTH The portfolios that may best suit a growth investor seek to provide high, long-term capital appreciation with lowcurrent income.

EQUITY GROWTH The portfolios that may best suit an equity growth investor seek to provide high, long-term capitalappreciation.



Proposed asset allocation

5

Asset allocation is the process of determining optimal allocations across the broad categories of assets (such as stocks,bonds, real assets, cash, etc.) that suit your risk tolerance and investment time horizon.

Current PortfolioEquity Growth

Proposed PortfolioBalanced

Asset Class Amount Weight % Amount Weight %US Equity $832,966.65 83.30% $260,500.00 26.05%

Non-US Equity $128,529.97 12.85% $229,500.00 22.95%

Fixed Income $28,503.36 2.85% $348,249.99 34.82%

Global High Yield Bond $0.00 0.00% $31,750.00 3.18%

Global Real Estate $0.00 0.00% $30,000.00 3.00%

Commodities $0.00 0.00% $40,000.00 4.00%

Infrastructure $0.00 0.00% $30,000.00 3.00%

Alternative Strategies $0.00 0.00% $30,000.00 3.00%

Cash $10,000.00 1.00% $0.00 0.00%

Other/Unclassified $0.02 0.00% $0.01 0.00%

TOTAL $1,000,000.00 100.00% $1,000,000.00 100.00%

The asset allocation models for your current and proposed portfolios are provided above. A proposed balanced portfolio maybe better suited for your investment needs because it has a lower volatility (risk) than your current equity growth portfolio. Inexchange for a higher return potential, you must be willing to assume additional risk.

US EQUITY Investment in US company stocks. Stock represents ownership and control in a corporation and may paydividends as well as appreciate or depreciate in value. The value of a stock will rise and fall in response to the activities of thecompany that issued it, general market conditions, and economic conditions.

NON-US EQUITY Investment in non-US stocks. Investments in non-U.S. markets can involve risks of currency fluctuation,political and economic instability, different accounting standards and foreign taxation. Such securities may be less liquid andmore volatile. Investments in emerging or developing markets involve exposure to economic structures that are generally lessdiverse and mature, and political systems with less stability than in more developed countries.

FIXED INCOME A government, municipal or corporate bond that pays a fixed rate of interest until the bond matures; ora preferred stock that pays a fixed dividend. Bond investors should carefully consider risks such as interest rate, credit,repurchase and reverse purchase transaction risks. Greater risk, such as increased volatility, limited liquidity, prepayment,non-payment and increased default risk, is inherent in portfolios that invest in high yield ("junk") bonds or mortgage backedsecurities, especially mortgage backed securities with exposure to sub-prime mortgages.

GLOBAL HIGH YIELD BONDS The high yield market consists of the debt of corporations that have relatively high levels ofleverage. These debt securities are rated as 'below investment grade,' or "junk bonds," i.e. BB rated or lower (using Standardand Poor's rating definition). These issuers have been assigned lower ratings by credit rating agencies based on their greaterrisk of default and/or loss on default. Hence, higher yields are required to attract and compensate investors for taking on thatdefault risk.



Proposed asset allocation

6

GLOBAL REAL ESTATE A Real Estate Investment Trust (REIT) invests in real estate loans (mortgages and trust deeds)and/or has equity interests in real estate. Specific sector investing, such as real estate, can be subject to different and greaterrisks than more diversified investments. Declines in the value of real estate, changes in economic conditions, property taxes,tax laws, and interest rates all present potential risks to real estate investments.

COMMODITIES are physical substances, such as food, grains, and metals, which are interchangeable with another productof the same type. They are most often used as inputs in the production of other goods or services. Investors can buy or sellthese, usually through futures contracts. The price of the commodity is subject to supply and demand. Commodities arevolatile investments on their own and should form only a small portion of a diversified portfolio to aid in diversification and as apotential hedge against inflation.

INFRASTRUCTURE Infrastructure assets are long-lived assets that provide sustainable services that are essential for afunctioning economy. There are three broad categories, transportation, utilities, and communications. These include energysuch as power generation plants, transmission, and renewables, water and wastewater networks and desalination plants,transportation such as ports, rail, airports, roads, bridges and parking, communications such as cable networks and satellites,and social structures such as hospitals prisons, schools, courts, and public housing.

ALTERNATIVE STRATEGIES An aggressively managed portfolio of investments that uses advanced investment strategiessuch as leverage, long, short and derivative positions in both domestic and international markets with the goal of generatinghigh returns.

CASH Short-term investments which typically involve instruments such as 90-day government Treasury Bills, high qualityshort-term notes and commercial paper issued by major financial institutions and blue chip companies. While highly liquid,cash generally has not kept pace with inflation. Although the fund seeks to preserve the value of your investment at $1.00 pershare, it is possible to lose money by investing in the fund.

OTHER/UNCLASSIFIED Some portfolio assets, such as individual publicly traded securities, may be readily classified intothe above categories. Certain securities, such as mutual funds, ETFs, or other pooled investments, are not always as easyto classify. In some cases, a security or a portion of a security may be categorized as Other/Unclassified. Such assets areexcluded from analysis in this proposal where noted.



Efficient frontier 1

7

As of December 31, 2012

According to Modern Portfolio Theory, you can reduce the volatility of your portfolio by diversifying among different types ofinvestments. The efficient frontier represents the theoretical set of diversified portfolios with the maximum expected return fora given level of risk. A portfolio is said to be more efficient than another (meaning it has lower risk, a higher expected return, orboth) if it is closer to the frontier curve.

CurrentProposed

0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5

Risk:Standard Deviation(%)

0

1

2

3

4

5

6

7

8

Exp

ecte

d R

etu

rns(

%)

Current Portfolio Proposed PortfolioExpected Return 7.2% 5.7%Risk 17.7% 10.5%

The expected risk and return of your current and proposed portfolio asset allocations are plotted above. No single point alongthe frontier is necessarily better than any other point. Where your portfolio should lie is a decision you and your financialprofessional make based on your needs and feelings about risk.

The expected return and risk of a portfolio is generated by assigning proxy benchmark indexes weighted by the variousasset styles in the portfolio. For the list of appropriate indexes, please see the endnotes of this report. Risk is measured asthe standard deviation of return. Standard deviation is a statistical measure of the degree to which an individual value in aprobability distribution tends to vary from the mean of the distribution. The greater the degree of dispersion, the greater therisk.



Projected Growth of current allocation 2

8

Asset class assumptions as of December 31, 2012

Tax Status*: TaxableThe range of portfolio values below can provide additional information about the relative risk of investing according to aspecific asset allocation. This analysis was conducted using Monte Carlo simulation, a sophisticated mathematical approachused within the financial industry to model possible outcomes of future investment scenarios. While this method may reflect theuncertainty and randomness of future events, it is important to understand that it is based on assumptions about the future riskand expected returns of each asset class. Projected ending values are shown in nominal (i.e., not inflation-adjusted) terms.

2014 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 2033$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,00095th Percentile

75th Percentile

Median

25th Percentile

5th Percentile

PROBABILITY OF PORTFOLIO FAILURE: In 0% of simulated scenarios, the portfolio value was depleted before the end ofthe horizon.

Projected Ending Values95th Percentile $9,590,551.0075th Percentile $4,777,275.00Median (50th Percentile) $2,862,797.5025th Percentile $1,667,910.385th Percentile $703,811.50

IMPORTANT: The projections or other information generated by RPB regarding the likelihood of various outcomes arehypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

*In the case of taxable accounts, simulations assume an initial tax basis equal to the securities' starting value, no harvesting oftax losses, single filing status at $100K annual salary to determine marginal rates, no state taxes, and the tax impact of annualrebalancing back to the proposed allocation. Projected growth values are adjusted for portfolio taxes only, not income taxes onthe base salary.



Projected Growth of proposed allocation 2

9

Asset class assumptions as of December 31, 2012

Tax Status*: TaxableThe range of portfolio values below can provide additional information about the relative risk of investing according to aspecific asset allocation. This analysis was conducted using Monte Carlo simulation, a sophisticated mathematical approachused within the financial industry to model possible outcomes of future investment scenarios. While this method may reflect theuncertainty and randomness of future events, it is important to understand that it is based on assumptions about the future riskand expected returns of each asset class. Projected ending values are shown in nominal (i.e., not inflation-adjusted) terms.

2014 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 2033$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

95th Percentile

75th Percentile

Median

25th Percentile

5th Percentile

PROBABILITY OF PORTFOLIO FAILURE: In 0% of simulated scenarios, the portfolio value was depleted before the end ofthe horizon.

Projected Ending Values95th Percentile $4,721,732.0075th Percentile $2,993,356.00Median (50th Percentile) $2,216,201.2525th Percentile $1,602,902.385th Percentile $979,479.69

IMPORTANT: The projections or other information generated by RPB regarding the likelihood of various outcomes arehypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

*In the case of taxable accounts, simulations assume an initial tax basis equal to the securities' starting value, no harvesting oftax losses, single filing status at $100K annual salary to determine marginal rates, no state taxes, and the tax impact of annualrebalancing back to the proposed allocation. Projected growth values are adjusted for portfolio taxes only, not income taxes onthe base salary.



Projected Growth of proposed allocation 2

10

Percentile values, including the Median which is the 50th Percentile, are solely for comparison purposes. These values canbe used to compare relative probabilities of different outcomes. Half of the simulated outcomes fall between the 25th and the75th percentiles and nine-tenths fall between the 5th and 95th percentiles. The 5th Percentile corresponds to wealth valuesin which 95% of the simulated cases exceed this level and only 5% fall below. It reflects simulated results assuming a seriesof extremely poor market conditions. Remember that it is possible to lose the entire value of a portfolio. A different set ofassumptions would create a different probability distribution. Expert opinion regarding expected returns, volatility and markettrends varies widely.

Russell's strategic planning assumptions change periodically. The data presented here is as of a certain point in time andresults may vary with each use and over time. Your actual experience may be different than the Russell strategic planningassumptions.

This hypothetical example is for illustration only. There are no guarantees that any of the stated objectives will be met.



Portfolio contributions and withdrawals 2

11

This table shows the contribution and withdrawal goals applied to your portfolio. These goals are reflected in the projectedgrowth charting.

ContributionsDescription Start

YearEndYear

Initial AnnualAmount

Adjust forInflation?*

AdditionalAnnual Increase

Savings 2014 2026 $20,000 No 5%

WithdrawalsDescription Start

YearEndYear

Initial AnnualAmount

Adjust forInflation?*

AdditionalAnnual Increase

Retirement Spending 2027 2033 $60,000 Yes 0%*Inflation assumption is 2.7% annually.

The Initial Annual Amount is the value used for first year (Start Year) calculations. The Adjust for Inflation and AdditionalAnnual Increase values, if applicable, are made to annual amounts of subsequent years.

Summary of annual contributions and withdrawals

This chart summarizes the net results of the goals listed above. A positive value for a year corresponds to a net portfoliocontribution. A negative value for a year corresponds to a net portfolio withdrawal.

2014 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 2033

Years

-80,000

-60,000

-40,000

-20,000

0

20,000

40,000



Historical asset class performance 3

12


Based on the asset allocation of the current and proposed portfolios, the historical return of your current portfolio may begreater or less than the proposed portfolio. The chart below illustrates the hypothetical growth of $10,000 invested in thecurrent and proposed portfolios. The proposed asset allocation is based on your stated time horizon and risk tolerance. Pastperformance is no guarantee of future results.

Current Portfolio Proposed Portfolio

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$7.5k

$9k

$10.5k

$12k

$13.5k

$15k

$16.5k

$18k

$19.5k

$21k

$22.5k

This historical, hypothetical performance is determined by assigning proxy benchmark indexes weighted by the various assetstyles in the portfolios. For a list of the applicable indexes please see the endnotes of this report. This example is for illustrationonly and is not intended to reflect the return of any actual investment. Investments do not typically grow at an even rate ofreturn and may experience negative growth.



Proposed asset allocation and holdings

13

As of March 01, 2013

The proposed holdings were chosen by your financial professional to match your target asset allocation, based on yourinvestor profile.

Other investments not considered might have characteristics similar or superior to those proposed by your financialprofessional. The analysis used in creating your proposed allocation does not search for, analyze or favor certain securities orinvestments. See page 4 for investor profile definitions.

Balanced US Equity $260,500.00 26.05%

Non-US Equity $229,500.00 22.95%

Fixed Income $348,249.99 34.82%

Global High Yield Bond $31,750.00 3.18%

Global Real Estate $30,000.00 3.00%

Commodities $40,000.00 4.00%

Infrastructure $30,000.00 3.00%

Alternative Strategies $30,000.00 3.00%

Cash $0.00 0.00%

Other/Unclassified $0.01 0.00%

Symbol Name Amount WeightingRLESX Russell U.S. Small Cap Equity Fund-Class S $40,000.00 4.00%RGESX Russell Global Equity Fund-Class S $90,000.00 9.00%RRESX Russell Global Real Estate Securities; Class S

Shares$30,000.00 3.00%

RMSSX Russell Multi-Strategy Alternative Fund;ClassS $30,000.00 3.00%RFCTX Russell Strategic Bond Fund-Class S $350,000.00 35.00%REMSX Russell Emerging Markets Fund-Class S $40,000.00 4.00%RINTX Russell International Dev Markets Fund-Class S $140,000.00 14.00%RCCSX Russell Commodity Strategies Fund; Class S

Shares$40,000.00 4.00%

RSESX Russell U.S. Strategic Equity Fund-Class S $180,000.00 18.00%RGISX Russell Global Infrastructure; Class S Shares $30,000.00 3.00%RGCSX Russell Global Opportunistic Credit Fund, Class S $30,000.00 3.00%TOTAL $1,000,000.00 100.00%

In the case of mutual funds listed above, fund objectives, risks, charges and expenses should be carefullyconsidered before investing. A summary prospectus, if available, or a prospectus containing this and other importantinformation can be obtained by calling 800-787-7354 or by visiting www.russell.com. Please read a prospectuscarefully before investing.



Style analysis 4

14


CurrentPortfolio

ProposedPortfolio

US EquityLarge Cap Growth 63.36% 10.80%

Large Cap Value 18.38% 10.80%

Small Cap Growth 0.00% 2.22%

Small Cap Value 1.56% 2.22%

Non-US EquityDeveloped Markets 10.01% 18.97%

Emerging Markets 2.84% 4.00%

Fixed IncomeMunicipal Bond 0.00% 0.00%

Corporate Bond 1.52% 15.75%

TIPS 0.00% 0.00%

Convertible Bond 0.00% 0.00%

Mortgage-Backed Securities 0.00% 7.00%

International Bond 0.00% 1.92%

U.S. Government Bond 1.33% 10.15%

Preferred 0.00% 0.00%

Global High Yield Bond 0.00% 3.17%

AlternativesGlobal Real Estate 0.00% 3.00%

Commodities 0.00% 4.00%

Infrastructure 0.00% 3.00%

Alternative Strategies 0.00% 3.00%

Cash 1.00% 0.00%

Certificate of Deposit 0.00% 0.00%

Style - Other/Unclassified 0.00% 0.00%

Total 100% 100% 0% 10% 20% 30% 40% 50% 60%

Underweight/Overweight

-15 0 15 30 45

* Underweight In the current investment portfolio, having less exposure to a given asset class or style relative to the proposedportfolio.

* Overweight In the current investment portfolio, having more exposure to a given asset class or style relative to the proposedportfolio.



Sector analysis

15


CurrentPortfolio

ProposedPortfolio Underweight/Overweight

*

Industrials 15.20% 5.15%

Telecomm Services 2.28% 1.96%

Consumer Discretionary 4.15% 4.60%

Energy 4.48% 3.87%

Financials 6.66% 12.33%

Health Care 4.90% 4.71%

Materials 2.60% 4.42%

Consumer Staples 25.61% 6.30%

Information Technology 28.84% 6.00%

Utilities 1.43% 4.03%

Sector-Other/Unclassified 0.00% 1.64%

Excluded 3.85% 44.99%

0% 10% 20% 30% 40% 50% -60 -40 -20 0 20 40

The excluded category represents portions of a portfolio (e.g., non-equity allocations) that are excluded from the sectoranalysis.

* Underweight In the current investment portfolio, having less exposure to a given sector relative to the proposed portfolio.

* Overweight In the current investment portfolio, having more exposure to a given sector relative to the proposed portfolio.



Security overlap analysis Current Holdings

16


The Security Overlap Analysis identifies multiple holdings of the same asset in a portfolio, including assets that are heldindirectly through mutual funds, Exchange Traded Funds (ETFs), or other packaged products.

The analysis shows the total weight of the asset in the portfolio (darker bars) and the component weight of that asset in eachindividual position, fund or packaged product (lighter bars).

SourceSymbol

SourceName

ComponentWeight

TotalWeight

Value

MSFT Microsoft Corporation 25.45% $254,500.00

CWGIX Capital World Growth & IncomeFund; Class A Shares

0.19%

ANCFX Fundamental Investors, Inc; ClassA Shares

0.26%

MSFT Microsoft Corporation 25%

HD Home Depot, Inc. 0.7% $7,000.00


0.19%

ANCFX Fundamental Investors, Inc; ClassA Shares

0.51%

NVSEF Novartis AG 0.51% $5,100.00


0.37%

AEPGX EuroPacific Growth Fund; Class AShares

0.14%

BAYZF BAYER AG ORD 0.35% $3,500.00


0.24%


0.11%

AHBIF Anheuser-Busch Inbev SA 0.22% $2,200.00


0.13%


0.09%



Security overlap analysis Current Holdings

17

NOTE: For mutual funds, ETFs, and SMAs, the Security Overlap Analysis only looks at the top ten holdings.



Security overlap analysis Proposed Holdings

18


The Security Overlap Analysis identifies multiple holdings of the same asset in a portfolio, including assets that are heldindirectly through mutual funds, Exchange Traded Funds (ETFs), or other packaged products.

The analysis shows the total weight of the asset in the portfolio (darker bars) and the component weight of that asset in eachindividual position, fund or packaged product (lighter bars).

SourceSymbol

SourceName

ComponentWeight

TotalWeight

Value

NSRGF Nestle SA 0.25% $2,500.00

RGESX Russell Global Equity Fund-ClassS

0.13%

RINTX Russell International Dev MarketsFund-Class S

0.12%

NOTE: For mutual funds, ETFs, and SMAs, the Security Overlap Analysis only looks at the top ten holdings.



Proposed transactions

19


This is the suggested transaction plan based on your current versus your proposed portfolio of investments as determined byyour financial professional. Implementation of the suggested transaction plan may vary based on additional client input, yourfinancial professional’s implementation strategy, and fluctuation of security prices.

Total number of transactions: 19

Total Sell: 8

Total Buy: 11

Symbol Name Transaction Value

$CASH Cash Sell $10,000.00

AEPGX EuroPacific Growth Fund; Class A Shares Sell $65,000.00

ANCFX Fundamental Investors, Inc; Class A Shares Sell $150,000.00

COST Costco Wholesale Corporation Sell $201,000.00

CWGIX Capital World Growth & Income Fund; Class AShares

Sell $125,000.00

LDFVX Lord Abbett Fundamental Equity Fund; Class AShares

Sell $100,000.00

MSFT Microsoft Corporation Sell $250,000.00

RCCSX Russell Commodity Strategies Fund; Class SShares

Buy $40,000.00

REMSX Russell Emerging Markets Fund-Class S Buy $40,000.00

RFCTX Russell Strategic Bond Fund-Class S Buy $350,000.00

RGCSX Russell Global Opportunistic Credit Fund, ClassS

Buy $30,000.00

RGESX Russell Global Equity Fund-Class S Buy $90,000.00

RGISX Russell Global Infrastructure; Class S Shares Buy $30,000.00

RINTX Russell International Dev Markets Fund-Class S Buy $140,000.00

RLESX Russell U.S. Small Cap Equity Fund-Class S Buy $40,000.00

RMSSX Russell Multi-Strategy Alternative Fund;ClassS Buy $30,000.00

RRESX Russell Global Real Estate Securities; Class SShares

Buy $30,000.00

RSESX Russell U.S. Strategic Equity Fund-Class S Buy $180,000.00

UPS United Parcel Service Inc (UPS) Sell $99,000.00



Risk profile questionnaire

20

1. The investment I am now consideringrepresents the following percentage of my totalinvestment portfolio.

80-100% 60-80% 40-60% 20-40% 20% or less

2. In how many years do you expect to startspending the money you're investing?

1 Year 2-5 Years 6-10 Years 11-20 Years 21+ Years

3. I do not foresee any major expenses thatmight cause me to make withdrawals from thisinvestment before that time.

Strongly Agree Agree Neutral Disagree StronglyDisagree

4. When I start making withdrawals from thisinvestment, they will be used to fund my livingexpenses.


5. When it comes to investing, protecting themoney I have is my highest priority.


6. I always choose investments with the highestpossible return.


7. I prefer an investment strategy designed togrow steadily and avoid sharp ups and downs.


8. To meet my financial goals, my investmentsmust grow at a high rate of return.


9. I am unwilling to wait several years to recoverfrom losses I incur in an extended down market.


10. I prefer investments that are low risk, even ifreturns are lower than the rate of inflation.




Glossary

21

LARGE CAP Large capitalization investments involve stocks of companies generally having a market capitalization greaterthan $2 billion. The value of securities will rise and fall in response to the activities of the company that issued them, generalmarket conditions and/or economic conditions.

MID CAP Refers to US company stocks with a relatively mid market capitalization. The definition of mid cap can vary amongbrokerages, but generally it is a company with a market capitalization of between $2 billion and $10 billion. Stock representsownership and control in a corporation and may pay dividends as well as appreciate in value.

SMALL CAP Small capitalization investments involve stocks of companies with smaller levels of market capitalization(generally less than $2 billion) than larger company stocks (large cap). Small cap investments are subject to considerable pricefluctuations and are more volatile than large company stocks. Investors should consider the additional risks involved in smallcap investments.

BOND FUND A fund that invests in fixed income instruments. A bond fund can range from very conservative governmentbond funds to more volatile high yield funds. Bond investors should carefully consider risks such as interest rate, credit,repurchase and reverse purchase transaction risks. Greater risk, such as increased volatility, limited liquidity, prepayment,non-payment and increased default risk, is inherent in portfolio that invest in high yield ("junk") bonds or mortgage backedsecurities, especially mortgage backed securities with exposure to sub-prime mortgages.A Fund may invest in derivatives, including futures, options, forwards and swaps. Investments in derivatives may causethe Fund's losses to be greater than if it invests only in conventional securities and can cause the Fund to be more volatile.Derivatives involve risks different from, or possibly greater than, the risks associated with other investments. The Fund's use ofderivatives may cause the Fund's investment returns to be impacted by the performance of securities the Fund does not ownand result in the Fund's total investment exposure exceeding the value of its portfolio.

NON-US FUND A fund that can invest in companies located in any geographic area outside the US. Investments in non-U.S.markets can involve risks of currency fluctuation, political and economic instability, different accounting standards and foreigntaxation. Such securities may be less liquid and more volatile. Investments in emerging or developing markets involveexposure to economic structures that are generally less diverse and mature, and political systems with less stability than inmore developed countries.

MONEY MARKET FUND A fund that invests in short-term debt instruments. Its objective is to earn interest for its investorwhile maintaining a constant price of $1.00. An investment in a money market fund is not insured or guaranteed by the FederalDeposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of yourinvestment at $1.00 per share, it is possible to lose money by investing in the fund.

REIT FUND A fund with an objective of investing in real estate. A REIT can invest in property directly or in the debt associatedwith real estate. Specific sector investing such as real estate can be subject to different and greater risk than more diversifiedinvestments. Declines in the value of real estate, economic conditions, property taxes and tax laws and interest rates allpresent potential risks to real estate investments.

SECTOR FUND A fund whose objective is to invest in a particular industry or sector of the economy. Specific sector funds canbe subject to different and greater risk than more diversified investments.



Glossary

22

COMMODITY FUND A fund that is intended to provide exposure to the performance of the collateralized commodityfutures market. Commodities are considered real assets – goods such as natural resources like oil or precious metals,livestock, or raw agricultural products such as soybeans or coffee beans – that are used to produce many of the productsused by consumers around the world. Owning or investing in physical commodities – buying them directly – is difficult andimpractical for most people. Therefore, in order to participate in the commodities market, a fund will invest in commodityindex-linked securities, other commodity-linked securities, derivative instruments (including forward and swap agreements,commodity-linked structured notes, futures and options contracts with respect to indexes or individual commodities and optionson futures contracts), cash and fixed income securities.Investments in derivatives may cause the Fund’s losses to be greater than if it invests only in conventional securities and cancause the Fund to be more volatile. Derivatives involve risks different from, or possibly greater than, the risks associated withother investments. The Fund’s use of derivatives may cause the Fund’s investment returns to be impacted by the performanceof securities the Fund does not own and result in the Fund’s total investment exposure exceeding the value of its portfolio.

INFRASTRUCTURE FUND A fund that invests primarily in equity securities of infrastructure companies located in a numberof countries around the world. Infrastructure refers to the systems and networks of energy, transportation, communication andother services required for the normal function of society.

MARKET INDEX A market index is a group of assets traded on a particular investment market, and a statistic reflectingthe composite value of those component assets. It is used as a tool to represent the characteristics of its components, allof which bear some commonality such as trading on the same exchange, belonging to the same industry, or having similarcapitalizations. Many indexes compiled by news or financial services firms are used to benchmark the performance ofinvestment portfolios.

PREFERRED STOCK A class of stock that pays dividends at a specified rate and that has preference over common stock inthe payment of dividends and the liquidation of assets. Preferred stock does not ordinarily carry voting rights.

VARIABLE ANNUITY An annuity contract whose value fluctuates with that of an underlying securities portfolio or otherperformance index. The return to investors may be in the form of a periodic payment that varies with the market value of theportfolio or a fixed minimum payment with add-ons based on the rate of portfolio appreciation.

SEPARATELY MANAGED ACCOUNT (SMA) A privately managed investment account opened through a brokerage orfinancial advisor to buy individual assets.

EXCHANGE TRADED FUND (ETF) Investments in ETFs are exposed to similar risks associated with investments in otherdiversified stock portfolios. A primary risk is that the general level of stock prices may decline, thus affecting the value of ETFs.Exchange traded funds based on the Russell Indexes are not products of Russell. This is not an offer or solicitation for thepurchase of this instrument.

GROWTH Investments focusing on stocks of companies whose earnings/profitability are accelerating in the short term orhave grown consistently over the long term. Such investments may provide minimal dividends which could otherwise cushionstock prices in a market decline. Stock value may rise and fall significantly based, in part, on investors’ perceptions of thecompany, rather than on fundamental analysis of the stocks. Investors should carefully consider the additional risks involved ingrowth investments.

VALUE Investments focusing on stocks of income producing companies whose price is low relative to one or more valuationfactors, such as earnings or book value. Such investments are subject to risks that their intrinsic values may never be realizedby the market, or, such stock may turn out not have been undervalued. Investors should carefully consider the additional risksinvolved in value investments



Glossary

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MARKET-ORIENTED Investments generally subject to risks similar to that of both growth and value style investing. Theseinclude the risk that a value style investment’s intrinsic values may never be realized by the market, or, such stock may turnout not to have been undervalued. Growth style investments may provide minimal dividends which could otherwise cushionstock prices in a market decline. Growth stock value may rise and fall significantly based, in part, on investors’ perceptions ofthe company, rather than on fundamental analysis of the stocks. Investors should carefully consider all the risks involved inmarket-oriented investments.

ALTERNATIVES Alternatives can include real estate, physical commodities (including oil, gold and copper), and infrastructure(such as bridges, toll roads and utilities networks), multi-strategy funds, and hedge funds. These investing strategies have thepotential to add a diversifying return stream. At certain points in history, the value of alternatives has been driven by aggregateprice rises, so at times they may offer investors some protection from unanticipated inflation. Alternatives are sourced andconsumed globally, adding to the global diversification of the portfolio.

Sector Definitions

INDUSTRIALS Includes companies whose businesses are dominated by one of the following activities: The manufacture anddistribution of capital goods, including aerospace and defense, construction, engineering and commercial products, electricalequipment and industrial machinery. The provision of commercial services and supplies, including printing, employment,environmental, and office services. The provision of transportational services, including airlines, couriers, marine, road and railand transportational infrastructure.

TELECOMM SERVICES Contains companies that provide communications services primarily through a fixed-line, cellular,wireless, high bandwidth and/or fiber optic cable network.

CONSUMER DISCRETIONARY SECTOR The GICS Consumer Discretionary Sector encompasses those industries thattend to be the most sensitive to economic cycles. Its manufacturing segment includes automotive, household durable goods,textiles & apparel and leisure equipment. The services segment includes hotels, restaurants and other leisure facilities, mediaproduction and services, and consumer retailing and services.

ENERGY Comprised of companies whose businesses are dominated by either of the following activities: The constructionor provision of oil rigs, drilling equipment and other energy related services and equipment, including seismic data collection.Companies engaged in the exploration, production, marketing, refining, and/or transportation of oil and gas products, coal andother consumable fuels.

FINANCIALS SECTOR The GICS Financial Sector contains companies involved in activities such as banking, mortgagefinance, consumer finance, specialized finance, investment banking and brokerage, asset management and custody, corporatelending, insurance, and financial investment, and real estate including REITs.

HEALTH CARE SECTOR The GICS Health Care Sector encompasses two main industry groups. The first includescompanies who manufacture health care equipment and supplies or provide health care related services, including distributorsof health care products, providers of basic health care services, and owners and operators of health care facilities andorganizations. The second groups companies primarily involved in the research, development, production and marketing ofpharmaceuticals and biotechnology products.

MATERIALS SECTOR The GICS Materials Sector encompasses a wide range of commodity-related manufacturingindustries. Included in this sector are companies that manufacture chemicals, construction materials, glass, paper, forestproducts and related packaging products, and metals, minerals and mining companies, including producers of steel.



Glossary

24

CONSUMER STAPLES SECTOR The GICS Consumer Staples Sector comprises companies whose businesses are lesssensitive to economic cycles. It includes manufacturers and distributors of food, beverages and tobacco and producers ofnon-durable household goods and personal products. It also includes food & drug retailing companies as well as hypermarketsand consumer super centers.

INFORMATION TECHNOLOGY SECTOR The GICS Information Technology Sector covers the following general areas:firstly, Technology Software & Services, including companies that primarily develop software in various fields such as theInternet, application, systems, database management, and /or home entertainment, and companies that provide informationtechnology consulting and services, as well as data processing and outsourced services; secondly Technology Hardware& Equipment, including manufacturers and distributors of communications equipment, computers & peripherals, electronicequipment and related instruments; and thirdly, Semiconductors & Semiconductor Equipment Manufacturers.

UTILITIES SECTOR The GICs Utilities Sector encompasses those companies considered electric, gas or water utilities, orcompanies that operate as independent producers and/or distributors of power.

OTHER/UNCLASSIFIED This category includes companies not identified as fitting into any one specific economic sector. Thismay include companies referred to as multi-sector companies.

DEFENSIVE Defensive style emphasizes investments in equity securities of companies that are believed to have lower thanaverage stock price volatility, characteristics indicating high financial quality, (which may include lower financial leverage)and/or stable business fundamentals.

DYNAMIC Dynamic style emphasizes investments in equity securities of companies that are believed to be currentlyundergoing or are expected to undergo positive change that will lead to stock price appreciation. Dynamic stocks typically havehigher than average stock price volatility, characteristics indicating lower financial quality, (which may include greater financialleverage) and/or less business stability.



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1 Efficient FrontierThese Asset Class Capital Market Forecast assumptions are created by using a globally integrated perspective,country-specific equity risk premiums, a comprehensive term structure for determining yield curves, distributions of assetreturns, sensitivity to market conditions and a building block approach to individual asset classes. The forecast assumptionstake into account the dynamic behavior of returns using a statistical factor model that incorporates random (i.e. time-varying)volatility. The model includes a number of initial conditions, such as nominal and real yield curves, equity dividend yields, creditspreads and exchange rates. The creation of the Asset Class Capital Market Forecasts also incorporate historical index datafor the Russell 3000®, market-cap weighted combination of regional equities excluding US (this is not EAFE) for InternationalDeveloped Equity, FTSE EPRA/NAREIT Developed Real Estate Index, Dow Jones UBS Commodity Total Return Index, S&PGlobal Infrastructure Index, various Barclays Bond Indices for Fixed Income, and bond prices based on 150 securities forcash. Global High Yield Bond forecasts are constructed using a market-cap weighted combination of High Yield from Europe,the UK and the US based on High Yield characteristics from Barclays. Alternative strategies forecasts are developed using theHFRI Index. Forecasts are updated quarterly, because our assumptions about the capital markets evolve over time.

Indexes are unmanaged, and do not reflect the deduction of any management fees, and cannot be invested in directly. Theyare provided for general comparison purposes only. Index performance is not indicative of any specific investment, and shouldnot be viewed as a representation of future results. Deductions for fees and expenses are not reflected in index returns. If theywere deducted, returns would be lower. Index return information is provided by vendors and although deemed reliable, is notguaranteed by Russell or its affiliates.

Note: If a portion of a portfolio is categorized as OTHER/UNCLASSIFIED, then that percentage of the portfolio is excludedfrom the calculation to determine a portfolio's risk and return.

Asset class assumptions20-year horizon as of December 31, 2012

Correlations

Asset ClassMean

ReturnStandardDeviation

U.S.Equity

Non-U.S.Equity

GlobalReal

EstateInfra-

structureComm-odities

AltStrats

FixedIncome

GlobalHY Bond Cash

U.S. Equity 7.4% 18.7% 1Non-U.S. Equity 7.3% 19.7% 0.78 1Global Real Estate 7.1% 20.6% 0.77 0.79 1Infrastructure 6.0% 17.1% 0.66 0.61 0.74 1Commodities 4.8% 16.1% 0.35 0.34 0.45 0.59 1Alternative Strategies 3.6% 6.3% 0.44 0.41 0.37 0.42 0.52 1Fixed Income 3.5% 3.4% 0.15 0.13 0.13 0.19 0.24 0.59 1Global High Yield Bond 5.6% 11.9% 0.25 0.23 0.24 0.24 0.16 0.28 0.36 1Cash 2.8% 5.2% 0.13 0.09 0.09 0.17 0.27 0.79 0.74 0.23 1

*Correlation coefficients, which can range from 1.0 to -1.0, measure the degree to which the movementsof two variables are related. A correlation coefficient of 1.0 means that two variables move in acompletely synchronized manner, while -1.0 means they move completely opposite. A coefficient ofzero means that movements are completely unrelated. Combining asset classes with lower or negativecorrelations may help reduce the volatility of returns over time.

2 Potential growth of current/proposed allocation

Monte Carlo simulation methodology:

These simulations are created using strategic planning assumptions developed from Russell's proprietary models that



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incorporate historical data from market and economic indexes as described above. The forecasts assume a well diversifiedportfolio and that the mix of investments in this portfolio is maintained for the entire simulated horizon, with no additionalinvestments, no margin borrowing or short sales, annual rebalancing back to the proposed allocation, no transaction fees onthis rebalancing. Russell's strategic planning assumptions are updated at least annually.

Because assumptions about the capital markets evolve over time, results of the calculations may vary with each use andover time. Your portfolio may not be adequately diversified, which could affect the validity of the simulation process describedabove when applied to your actual circumstances. Furthermore, these forecasts do not consider return and risk differencesassociated with holding a highly concentrated position, nor how long a security has been held. Other asset classes andinvestments not considered in this analysis may produce different results. There also may be other considerations pertinent toyour situation that have not been addressed, including, but not limited to, market conditions, the tax position of your assets orcash flows, or other available assets, such as personal real estate or other investments not included in this analysis.

Key Assumptions:

If a portfolio includes securities whose styles are not identified by RPB, those securities are excluded from the simulation withtheir value allocated among the remaining securities in the portfolio.

Within the simulations, the probability distribution of returns is a modified normal distribution. As with the familiar "bell curve,"not all outcomes are treated as equally likely. Instead, returns are more likely to be clustered around the middle. To reflect thehistoric behavior of the securities markets, the Monte Carlo Simulator allows more extreme events than would be seen within anormal distribution.

Limitations:

IMPORTANT: The projections or other information generated by RPB regarding the likelihood of various investmentoutcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.

3 Historical Asset Class Performance

1. The historical asset class performance graph is based on 10-years of historical monthly returns based on exposure tovarious indexes over the period specified ending with the calendar quarter end indicated. The risk and return of Large CapValue within each model are based on the Russell 1000® Value Index, Large Cap Growth is based on the Russell 1000®Growth Index, Small Cap Value is based on the Russell 2000® Value Index, Small Cap Growth is based on the Russell 2000®Growth Index, International Equities are based on the MSCI EAFE Index, REIT is based on the NAREIT Index, Fixed Incomeis based on the Barclays Aggregate Index, and Cash is based on the Merrill 3-Month T-Bill Index.

Note: If a portion of a portfolio is categorized as Other/Unclassified, then that percentage of the portfolio is excluded from thecalculation to determine a portfolio's risk and return.

4 Style Analysis

1. The style analysis uses the following indexes:

• Cash represents exposure to the Merrill 3-month Treasury Bill Index.

• U.S. Government Bond represents exposure to the Barclays Government Bond Index.

• Corporate Bond represents exposure to the Barclays Corporate Bond.

• Mortgage-Backed Bond represents exposure to the Barclays Mortgage Backed Securities Index.

• International Bond represents exposure to the Citigroup Non-US World Government Bond Index.

• Large Cap Value represents exposure to the Russell 1000® Value Index.



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• Large Cap Growth represents exposure to the Russell 1000® Growth Index.

• Small Cap Value represents exposure to the Russell 2000® Value Index.

• Small Cap Growth represents exposure to the Russell 2000® Growth Index.

• International Equity represents exposure to the MSCI EAFE Index.

• Global Real Estate represents exposure to the FTSE EPRA/NAREIT Developed Real Estate Index.

• Convertible Bonds represents exposure to Lipper Convertible Securities Fund Index.

• Certificate of Deposit represents exposure to Barclays US Treasury 1-3 year Index.

• Commodities represents exposure to the Dow Jones – UBS Commodity Index Total Return.

• Infrastructure represents exposure to the S&P Global Infrastructure Index.

• Alternative Strategies represents exposure to the HFRI Index.

• High Yield Bonds represents exposure to the Bank of America Merrill Lynch Global High Yield Index.

Indexes are unmanaged and are provided for general comparison purposes only. They cannot be invested in directly. RussellInvestment Group is the owner of the trademarks, service marks, and copyrights related to its indexes. Index return informationis provided by vendors and although deemed reliable is not guaranteed by Russell Investment Group or its affiliates.

Citigroup Non-US World Government Bond Index A market capitalization weighted index consisting of the governmentbond markets of the following countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy,Japan, and The Netherlands. Country eligibility is determined based on market capitalization and investability criteria. All

issues have a remaining maturity of at least one year. Rebalanced monthly. The Citigroup global equity index system SM andthe names of each of the indexes and subindexes of which it is comprised (GEIS and such indexes and subindexes, each an"index" and collectively the "indexes") are service marks of Citigroup. Although information has been obtained from sourcesusually considered reliable, the data and indexes are provided "as is" and Citigroup does not guarantee its accuracy nor doesCitigroup accept any responsibility to any party for the data or the indexes. Citigroup is not undertaking to manage money oract as a fiduciary with respect to any account. The data and the index are part of a general information service and are notintended as an offer or solicitation with respect to the purchase or sale of any security.

FTSE EPRA/NAREIT Developed Index A global market capitalization weighted index composed of listed real estatesecurities in the North American, European and Asian real estate markets.

Barclays Corporate Bond Index Covers USD-denominated, investment-grade, fixed-rate, taxable securities sold byindustrial, utility and financial issuers. It includes publicly issued U.S. corporate and foreign debentures and secured notes thatmeet specified maturity, liquidity, and quality requirements.

Barclays Government Bond Index A benchmark index made up of the Treasury Bond Index and the Agency Bond Index aswell as the 1-3 year Government Index and the 20+Year Treasury Index.

Barclays Mortgage Backed Securities Index A benchmark index that includes 15- and 30-year fixed-rate securities backedby mortgage pools of the Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corporation(FHLMC), and Federal National Mortgage Association (FNMA).

Barclays US Treasury 1-3 year Index An index representative of coupon-bearing US Treasury debt with terms to maturity ofat least one year.

Lipper Convertible Securities Fund Index An unmanaged index of the 10 largest funds, based on total year-end net assetvalue, in the Lipper Convertible Securities fund category, which consists of funds that invest primarily in convertible bonds andconvertible preferred stock.



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Merrill 3-Month Treasury Bill Index Consists of US Treasury Bills maturing in 90 days.

MSCI EAFE Index An index, with dividends reinvested, representative of the securities markets of twenty developed marketcountries in Europe, Australasia, and the Far East.

Russell 1000® Growth Index Measures the performance of those Russell 1000® Index securities with higher price-to-bookratios and higher forecasted growth values, representative of U.S. securities exhibiting growth characteristics.

Russell 1000® Value Index Measures the performance of those Russell 1000® Index securities with lower price-to-bookratios and lower forecasted growth values, representative of U.S. securities exhibiting value characteristics.

Russell 2000® Growth Index Measures the performance of those Russell 2000® Index securities with higher price-to-bookratios and higher forecasted growth values, representative of U.S. securities exhibiting growth characteristics.

Russell 2000® Value Index Measures the performance of those Russell 2000® Index securities with lower price-to-bookratios and lower forecasted growth values, representative of U.S. securities exhibiting value characteristics.

Dow Jones – UBS Commodity Index Total Return IndexSM is an unmanaged index composed of futures contracts on 19physical commodities.

S&P Global Infrastructure Index provides liquid and tradable exposure to 75 companies from around the world thatrepresent the listed infrastructure universe. The index has balanced weights across three distinct infrastructure clusters:utilities, transportation and energy.

Bank of America Merrill Lynch Global High Yield Index is composed of below investment grade bonds of corporate issuersdomiciled in countries having an investment foreign currency long-term debt rating.

5 Sector Analysis

The Sector Analysis follows Standard & Poor's and Morgan Stanley Capital International's Global Industry Classified Standard(GICS®) sector classification. Your current and proposed investments may have similar but different definitions.

6 Associated risks

The recommendations and estimates contained within this proposal are based upon your personal financial information asprovided to your investment professional, including your investment horizon, risk preferences, and current investment holdings.Please remember that all investments carry some level of risk.

As with any type of portfolio structuring, attempting to reduce risk and increase returns could, at certain times unintentionallyreduce returns. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, maybe worth more or less than their original cost. Diversification does not assure a profit and does not protect against loss in adeclining market. Past performance is not representative of future results.

Risk is measured as the standard deviation of return. Standard deviation measures how much, on average, individualreturns of a given group vary (or deviate) from the average (or mean) returns for this same group. For example, in a normaldistribution, if your average rate of return is 6.0% over 20 years with a standard deviation of 4.0%, over that period, your returnwent as high as 10.0% (6% + 4%) and as low as 2.0% (6% - 4%). The greater degree of deviation, the greater degree of risk.

US Large Cap equity: Large cap stocks tend to resist being viewed as speculative stocks; in fact many of them are



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considered perfect for defensive investing because of their immense size, their history of consistency and tendency to paydividends. They do experience their ups and downs, but large cap stocks are not normally victims of the stock volatility thattheir smaller siblings experience.

US Mid Cap equity: Middle capitalization (middle cap) investments involve stocks of companies generally having a marketcapitalization between $2 billion and $10 billion and considered more volatile than large cap companies. Mid cap investmentsare often considered to offer more growth potential than larger caps (but less than small caps) and less risk than small caps(but more than large caps).

US Small Cap equity: While small-cap stocks have historically earned higher returns than other types of investments, theyalso carry a higher risk of market fluctuations. Therefore, they may be appropriate for investors with a long investment timeframe who hold a well-diversified portfolio.

International developed equity: Non-US markets entail different risks than those typically associated with US markets,including currency fluctuations, political and economic instability, accounting changes, and foreign taxation. Securities may beless liquid and more volatile.

Global equity: Involves risk associated with investments primarily in equity securities of companies located around the world,including the United States. International securities can involve risks relating to political and economic instability or regulatoryconditions. Investments in emerging or developing markets involve exposure to economic structures that are generally lessdiverse and mature, and to political systems which have less stability than those of more developed countries.

Emerging markets: Investments in emerging or developing markets involve exposure to economic structures that aregenerally less diverse and mature, and to political systems which can be expected to have less stability than those of moredeveloped countries. Securities may be less liquid and more volatile than US and longer-established non-US markets.

Global real estate: Specific sector investing such as real estate can be subject to different and greater risks than morediversified investments. Declines in the value of real estate, economic conditions, property taxes, tax laws, and interest ratesall present potential risks to real estate investments.

Commodities: Exposure to the commodities markets may subject the Fund to greater volatility than investments in traditionalsecurities, particularly if the investments involve leverage. The value of commodity-linked derivative instruments may beaffected by changes in overall market movements, commodity index volatility, changes in interest rates or sectors affectinga particular industry or commodity and international economic, political and regulatory developments. The use of leveragedcommodity-linked derivatives creates an opportunity for increased return, but also creates the possibility for a greater loss.

Global infrastructure: Investments in infrastructure-related companies have greater exposure to the potential adverseeconomic, regulatory, political and other changes affecting such entities. Investment in infrastructure-related companies aresubject to various risks including governmental regulations, high interest costs associated with capital construction programs,costs associated with compliance and changes in environmental regulation, economic slowdown and surplus capacity,competition from other providers of services and other factors. Investment in non-U.S. and emerging market securities issubject to the risk of currency fluctuations and to economic and political risks associated with such foreign countries.

Alternative strategies: Alternative strategies often engage in leveraging and other speculative investment practices that mayincrease the risk of investment loss. They can be highly illiquid and are not required to provide periodic pricing or valuationinformation to investors. Alternative strategies may involve complex tax structures and delays in distributing important taxinformation. They are not subject to the same regulatory requirements as mutual funds and often charge high fees.



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Fixed income: Bond investors should carefully consider risks such as interest rate, credit, repurchase and reverse repurchasetransaction risks. Greater risk, such as increased volatility, limited liquidity, prepayment, non-payment and increased defaultrisk, is inherent in portfolios that invest in high yield ("junk") bonds or mortgage backed securities, especially mortgage backedsecurities with exposure to sub-prime mortgages. Investment in non-U.S. and emerging market securities is subject to the riskof currency fluctuations and to economic and political risks associated with such foreign countries.

Global high yield bond: Bonds that are rated below investment grade at the time of purchase. These bonds have a higherrisk of default or other adverse credit events, but typically pay higher yields than better quality bonds in order to make themattractive to investors.

The LifePoints® Funds, are a series of fund of funds which expose an investor to the risks of the underlying fundsproportionate to their allocation. Investment in Life-Points® Funds involves direct expenses of each fund and indirect expensesof the underlying funds, which together can be higher than those incurred when investing directly in an underlying fund.

Each of the LifePoints® Funds, Target Portfolio Series, invests its assets in shares of a number of underlying Russell Funds.From time to time, the fund's adviser may modify the target strategic asset allocation for any fund and/or the underlying fundsin which a fund invests including the addition of new underlying funds. A Fund's actual allocation may vary from the targetstrategic asset allocation at any point in time. In addition, the fund's adviser may also manage assets of the underlying fundsdirectly for a variety of purposes.

Income from funds managed for tax efficiency may be subject to an alternative minimum tax, and/or any applicable state andlocal taxes.

On August 15, 2012, the Russell U.S. Quantitative Equity Fund was renamed the Russell U.S. Defensive Equity Fund. Inaddition, the Fund changed its investment strategy from a quantitative investment approach to a defensive style of investingand discontinued the limited long-short strategy. As a result, the Fund’s primary benchmark changed from the Russell 1000®Index to the Russell 1000® Defensive Index™.

On August 15, 2012, the Russell U.S. Growth Fund was renamed the Russell U.S. Dynamic Equity Fund. In addition, the fundchanged its investment strategy from investing in growth stocks to a dynamic style of investing and may implement a limitedlong-short strategy. As a result, the Fund’s primary benchmark changed from the Russell 1000® Index to the Russell 1000®Dynamic Index™.

On October 15, 2012, the Russell U.S. Value Fund was merged into the Russell U.S. Defensive Equity Fund.

Effective April 26, 2013, the Russell Money Market Fund will be closed.

The Multi-strategy Alternative Fund may be subject to risks related to equity securities; fixed income securities, includingnon-investment grade fixed income securities, which involve higher volatility and higher risk of default than investment gradefixed income securities; non-U.S. and emerging markets securities, which involve risks such as currency fluctuation andpolitical and economic instability that could result in additional volatility; currency trading, which may involve instrumentsthat have volatile prices, are illiquid or create economic leverage; commodity investments, which may have greater volatilitythan investments in traditional securities; illiquid securities; and derivatives, including futures, options, forwards and swaps.Investments in derivatives may cause the Fund's losses to be greater than if it invests only in conventional securities and cancause the Fund to be more volatile. Derivatives involve risks different from, or possibly greater than, the risks associated withother investments. The Fund’s use of derivatives may cause the Fund’s investment returns to be impacted by the performanceof securities the Fund does not own and result in the Fund's total investment exposure exceeding the value of its portfolio.Additionally, the Fund may enter into short sales and certain money managers may utilize a short strategy. Short sales exposethe Fund to the risk of liability equal to the market value of the security that is sold, in addition to the costs associated withestablishing, maintaining and closing out the short position. Short sales have the potential for unlimited loss.



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The Strategic Call Overwriting Fund uses a call option writing (selling) strategy that may limit its opportunity to gain from anincrease in the market value of its equity portfolio and, conversely, may not reduce the extent of Fund losses during marketdeclines. The Fund uses multi–factor quantitative models to select stocks and guide its sale of index call options. Quantitativemodels may be flawed and may cause the Fund to underperform other funds with similar investment objectives and strategies.The Fund equity returns may not match or achieve a high degree of correlation with the returns of the S&P 500 Index dueto differences in security holdings, operating expenses, transaction costs, cash flows, operational inefficiencies and taxconsiderations.



Investment Policy Statement (IPS)

32

PurposeThe Investment Policy Statement (IPS) is the cornerstone of the investment management process. Investmentrecommendations will be made in concert with the guidelines that we agree upon and outline in this document. The IPS opensa channel of communication between us, so that important issues and concerns for either party can be clarified. An effectivelydeveloped IPS is the foundation upon which our work together will be based:

1. It establishes the criteria for matching long-term objectives to an appropriate investment plan.

2. It provides a frame of reference that will help keep us focused on long-term investment objectives. This focus is especiallyvaluable during periods of market volatility when there may be a temptation to react to short-term factors.

3. It establishes the criteria against which progress can be measured.

Investor ProfileThis Investment Policy Statement (IPS) governs the Investment Proposal dated March 01, 2013, created by Sally S. Advisoron behalf of Kevin Mitchell.

• Tax Status: Taxable.

This Investment Proposal specifies investable assets for Kevin Mitchell of $1,000,000.00.

General Investment Philosophy and ObjectivesConsistent with a financial professional’s and with a client’s respective investment styles and philosophies, a financialprofessional should make every effort to preserve capital and protect the real value of the assets. It is understood that lossesmay occur in individual securities, but that risk and losses will be considered at the aggregate portfolio level. A financialprofessional should adhere to the investment management styles for which they were hired and make reasonable efforts tomanage risk, recognizing that some risk is necessary to produce long-term results that are sufficient to meet the investmentobjectives.

RiskWe have discussed the various factors that influence your risk tolerance, such as time horizon and investment objectives, andhave concluded that you are a Balanced investor. An understanding of your risk tolerance helps define an investment strategythat you will feel confident maintaining through market fluctuations.

Return RequirementsGiven this risk tolerance, the Advisor will seek the best possible returns for a Balanced type investor. Given current economicconditions, the expected return for a Balanced portfolio matching your proposed allocation 5.66% (average annualized returnbased on Russell’s long term strategic planning assumptions). NOTE: Financial markets do fluctuate and there is no guaranteethat a certain return will be met, and past performance is not a guarantee of future results.

Time HorizonIn determining your risk tolerance, we assessed the time horizon for the assets in this investment proposal. Generallyspeaking, the longer the time frame, the more aggressive the portfolio should be if one wishes to obtain efficient returns.



Investment Policy Statement (IPS)

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Asset AllocationA sound asset allocation strategy is the cornerstone of prudent investing. Our investment strategy will involve under andoverweighting various asset classes based on our assessment of the risk and return potential specific to each asset class atany point in time. Based on our analysis, the following allocation guidelines are designed to achieve the objectives outlinedabove. Equity positions may incorporate diversification by market cap and style.

US Equity 26.05% Commodities 4.00%Non-US Equity 22.95% Infrastructure 3.00%Fixed Income 34.82% Alternative

Strategies3.00%

Global High YieldBond

3.18% Cash 0.00%

Global Real Estate 3.00%The target allocation indicates how we plan to allocate

the assets as of the date this report was written.

RebalancingOver time, market conditions may cause your portfolio to diverge from the target allocation. To remain consistent with theguidelines outlined in this Investment Policy Statement, we may periodically review the asset allocation of your portfolio andrebalance it back to the original target weightings.

Investment policy reviewTo assure continued relevance of the guidelines and objectives established in this statement of investment policy, the Clientplans to review the investment policy at least annually.

By committing our agreed upon thoughts to a written document, we minimize the potential for conflict and generalmisunderstandings. For this reason, we ask you to sign this agreement to confirm that you concur with its contents. ThisInvestment Policy Statement is not a contract of any kind. It is only meant to be a summary of our agreed upon investmentstrategy for your portfolio.

I have reviewed and approve the discussion above. I agree with the Investment Policy Statement as outlined in this document.I further agree that this document shall provide the guidelines under which my investment portfolio will be managed.

Investor Name _____________________________ Date _________________

Financial Professional/Firm ______________________________ Date _________________

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