Sustainable Investment Solutions™A Custom Portfolio Design Process for Socially Conscious Investors

Johann Klaassen, PhD. VP, Managed Account Solutions1-800-422-7284 johann@firstaffirmative.com

Danielle Burns, AIF® Business Development Consultant1-877-542-8583 danielleburns@firstaffirmative.com

First Affirmative

• Independent Registered Investment Advisor

• Serving socially conscious investors

• $593 million in client assets under management (09/30/09)

• 15 employees in Colorado Springs / Boulder /Denver

• Nationwide network of locally focused financial planners and investment advisors

• Signatory to the UN Principles for Responsible Investment

Sustainable Investment Solutions™

Getting toKnow You

AssetAllocation

Implementation

Reporting &Monitoring

Changes?

Consultative Process

First Client Meeting:

• Advisor and client discuss how First Affirmative is uniquely positioned to serve socially conscious investors

• Discuss needs, time horizon, risk tolerance, return expectations, social criteria, etc…

• Complete Confidential Client Questionnaire

Confidential Client Questionnaire

Institutional Client Questionnaire

Portfolio Design

First Affirmative develops a custom Proposal and Investment Policy Statement based on the Questionnaire and supplemental information

Proposal includes asset allocation strategy

Funds, separate account managers, or a combination of funds and separate accounts

Signature Please

• Advisor and client review and discuss the Proposal and IPS

• Client signs Investment Advisory Services Contract

• Client signs IPS

• Client signs New Account Set-up Forms

• Client provides Photo ID

• Arrangements are made to fund the account

• All signed documents must be received by First Affirmative before implementing account management strategy

Sustainable Investment Solutions™

Unified Managed Accounts for

Socially Conscious Investors

We believe that investors must take responsibility for the impact our money has on the world.

We help clients make money and make a difference by consciously directing investment capital toward enterprises that contribute to a clean, healthy environment, treat people fairly, embrace equal opportunity, produce safe and useful products, and support efforts to promote world peace.

At First Affirmative

We understand that investment returns over the long term are driven primarily by the performance of innovative, well-managed corporations that are themselves dependent on the health of the human societies and ecological systems that sustain all economic enterprises.

We offer investors an opportunity to consciously connect good fortune and good will, and help transform our world.

For a smoother ride…

Combining Different Assets

Portfolio Target

Target

First Affirmative Managed Mutual Fund Portfolios Historical Composite Performance Since Inception December 31, 1998 through Sept. 30, 2009 NET of all Fees and Expenses

60

80

100

120

140

160

180

Conservative Grow th Balanced Balanced Grow th Capital Grow th Diversif ied Equity S&P 500

Investment StrategiesAsset Allocation ~ Diversification

Hybrid Accounts

Hybrid Accounts

Sustainable Investment Solutions™Asset Allocation ~ Diversification

Who / What is Folio Institutional?

• Internet based platform custody, trading, and clearing

• Provides stock trading services at much reduced costs compared to more traditional broker dealer firms

• Allows for creation of up to seven folios – a basket of up to 100 securities – in each client account

• Two daily 15 minute trading “windows”

Model Folio / Separate Account Managers

Advisor Partners• SRI US Equity Portfolio• Large Cap Growth Portfolio• Large Cap Value Portfolio• SRI International Equity Portfolio• Custom Portfolio Strategies

Azzad Asset Mgt.• International Equity Folio

Bassi Investments• Human Capital SRI Portfolio

Boston Common Asset Mgt.• International Equity Folio• Global Currents ValueCore International

SRI

CLS Investment Firm• Folio 1.0• Folio 0.75

First Affirmative Financial Network• FAFN / KLD: Large Cap SRI Folio • FAFN MidCap SRI Folio• Equity Income SRI Folio • Alternative Assets• High Current Income• Fixed Income Folio• Green Tomorrow Folio• Charles Sandmel: Municipal Bond

Management

Heartland Financial• Equity SRI Portfolio • Balanced Portfolio (50/40/10)• Taxable Bond Portfolio

High Impact Mgt.• High Impact Folio• High Impact Growth & Income

Model Folio / Separate Account Managers

Jantz Morgan• Large Cap SRI 50 Folio

Keel Asset Mgt.• Mid Cap Social Core Folio• Mid Cap Social Value Folio

Legg Mason Investment Counsel• Socially Responsive Core Equity

MMA Capital Mgt.• Growth Index• Value Index

Miller/Howard Investments• Global Utilities and Infrastructure Strategy • Income-Equity Strategy

Pax World Capital Mgt.• SRI Growth Portfolio • SRI GARP Portfolio

Portfolio 21 Investments• Domestic Equity Portfolio

Progressive Asset Mgt.• Large-Cap Growth Social Track Portfolio• Large-Cap Value Social Track Portfolio• Mid-Cap Growth Social Track Portfolio• Mid-Cap Value Social Track Portfolio• Small-Cap Growth Social Track Portfolio• Small-Cap Value Social Track Portfolio• International Social Track Portfolio

SKBA Capital Mgt.• Socially Responsible Value Portfolio

Strategic Partners Investment Advisors

• Taxable and Tax-Exempt Municipal Bond Portfolios

Summit Investment Mgt.• SRI Catholic Values 100 Portfolio

Model Folio / Separate Account Managers

Summit Portfolio Advisors • Socially Responsive Equities Hedged with

Collars

Trillium Asset Mgt.• All Cap Core Equity Portfolio • Large Cap Core Equity• Small/Mid-Cap Core Equity Portfolio • All Cap Core Balanced • Large Cap Core Balanced

Uniplan Real Estate Advisors• REIT Portfolios

Advisor’s Role Is Critical and Clear

• Primary point of contact with the client

• Develops a detailed understanding of client’s situation, financial objectives, risk tolerance, and social priorities

• Monitors performance of the account and of the mutual funds and/or separate account managers selected

• Meets with client periodically to monitor progress

• Notifies First Affirmative of any changes in client’s financial situation

Asset Management Fees

Maximum Fee to client:

First $200,000 1.55%

Next $300,000 1.50%

Next $500,000 1.35%

Next $1,000,000 1.20%

Next $1,000,000 1.10%

Next $2,000,000 1.00%

Next $5,000,000 0.80%

Next $10,000,000 0.70%

Compensation to B/D, RIA, Solicitor

Mutual Fund Separate Portfolios Accounts

First $200,000 1.00% 0.85%

Next $300,000 0.75% 0.81%

Next $500,000 0.65% 0.70%

Next $1,000,000 0.60% 0.61%

Next $1,000,000 0.52% 0.52%

Next $2,000,000 0.50% 0.50%

Next $5,000,000 0.40% 0.40%

Next $10,000,000 0.35% 0.35%

Member Services Program

• ‘Transformative Investing’ Social Network• Social Investment Forum Membership• IW Financial Advisor• Proxy Governance Database on Proxy Resolutions• Professional Profile on First Affirmative Website• Marketing Assistance and Leads• Subscription to Bob Veres’ Inside Information

• Discount FedEx Labels• SRI in the Rockies Conference & Retreat

BaseCamp SRI

Regional Mini-Conferences

2010 BaseCamps:Denver, CONew York, NYSan Francisco, CASeattle, WAPortland, OR

Learn more at http://basecampsri.firstaffirmative.com

21st AnnualSRI in the Rockies Conference

JW Marriott San Antonio Hill Country Resort & SpaSan Antonio, TexasNovember 18–21, 2010www.SRIintheRockies.com

Pre-ConferenceNovember 16-18, 2010danielleburns@firstaffirmative.com