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401kExchange

Connecting Plan Sponsors and Providers Through Advisors

401kScout & 401kNavigator Overview

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401kScout and 401kNavigator Overview

The 401kExchange Due Diligence Service, developed together with the Boston Research Group to support plan sponsors from start-ups to $500M in plan assets. This service provides a thorough due diligence analysis of a prospect or client's current plan and provider. Customized Due Diligence Reports analyze current plan fees, investment performance and provider service quality vs. industry norms and live proposals from 3-5 selected competitors. This service puts sales people in a consultative sales role with the most comprehensive and authoritative information. There are two versions of the Due Diligence Service depending on the needs of the sponsor and the status of the relationship: 401kScout ­ Includes a complete five part review of the plan but pricing is benchmarked against industry averages and includes generic pricing from each selected provider. This report, which can be created instantaneously, will be used to show the prospect your due diligence capabilities and can even be used to complete the search depending on the complexity and needs of the sponsor. 401kNavigator ­ Pricing is customized by each selected provider based on a fund lineup supplied either the advisor or suggested by the provider based on the current plan investments. Can be used to complete a comprehensive RFP process or a due diligence that will fulfill the sponsor's obligations under ERISA to conduct a periodic review of their plan.

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401kScout and 401kNavigator Process

Prospect 1. Sponsor RFP

2a. Objective Screen

(Current Plan Info)

Funds/Asset Categories Assets Participants Avg Account Balance Payroll Locations Education Requirements Plan Type

2b. Subjective Screen

DCP Sponsor Ratings DCP Advisor Ratings

2. Suitability Screen a. Objective b. Subjective

401kScout* Report

3. Vendor Selection (3 ­ 7)

(401kExchange Ratings)

4. Investment Due Diligence

FiRM

*Scout is Generic Pricing

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Valued Client

* Navigator is Customized

5. Custom Pricing by Provider

401k Navigator* Report

(DCP Ratings)

401kScout Table of Contents

Section 1: Plan Expenses............................................................................ 5

Current and "proposed" plan expenses are benchmarked for the plan sponsor; including recordkeeping costs and investment expenses. Source: Provider submissions updated quarterly

Section 2: Competitive Comparisons & Market Profiles................................... 10

The providers are examined to see if they are a good fit for the plan sponsor. Educates sponsors as to how other plans in their market segment are being managed, and what is working for them. Are providers appropriate, committed to the market, and experienced in their market segment? What is the profile of each provider's clients? Source: DCP Sponsor and Advisor Survey, 401kExchange Surveys

Section 3: Provider Services Comparison........................................................ 25

Details what service standards the providers quote in reference to over 100 different recordkeeping tasks. Source: Provider submissions updated quarterly

Section 4: Provider Ratings......................................................................... 40

A look at Customer Satisfaction Ratings and Market Share information in terms of investment options, communications, education, fund performance and fee structure against industry averages on each of the competitors. This data, compiled from customer satisfaction surveys conducted with over 150,000 Employer Plan Sponsors, represents direct feedback from the customers of these Service Providers. Source: 401kExchange Ratings

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401kNavigator Table of Contents

Advisory Firm Overview ­ "About Our Firm" Table of Contents Executive Summary: A Look Ahead Due Diligence Overview and Methodology: Section 1: Plan Expenses: Current and "proposed" plan expenses are detailed for the plan sponsor; including investment expenses, recordkeeping costs, 12(b)(1) fees, Sub Transfer Agency (SubTA) fees, additional placement fees, etc. Section 2: Competitive Comparisons & Market Profiles The providers are examined to see if they are a good fit for the plan sponsor. Educates sponsors as to how other plans in their market segment are being managed, and what is working for them. Are providers appropriate, committed to the market, and experienced in their market segment? What is the profile of each provider's clients? Source: DCP Sponsor and Advisor Survey

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Table of Contents Summary

401kNavigator Table of Contents (Cont.)

Section 3: Provider Services Comparison Details what service standards the providers quote in reference to over 100 different recordkeeping tasks. Source: Provider submissions updated quarterly Section 4: Sponsor Ratings: A look at how each of the competitors fared in the Boston Research Group DCP Study Sources: DCP Surveys

Section 5: Fund Performance Review: Investment lineups for all providers are examined using the FIDUCIARY INVESTMENT REPORTING MANAGER (FiRM). This provides an apples to apples comparison between funds, fund line-ups, peer groups and benchmarks. FiRM looks specifically at Return Information, Risk Adjusted Return, Expenses, Fund Manager Tenure, Volatility, and Morningstar Rating.

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401kExchange Retirement Services Desk

Complete support for provider due diligence and monitoring to help ensure the best partners are selected for each plan sponsor opportunity and any relevant provider issues are immediately identified and reviewed. The 401kExchange Retirement Services Desk is available to help Advisors to: Select appropriate providers using valid market research Develop value propositions for each individual client Provide technical support on FiRM, and other 401kExchange online market intelligence services Answer qualified plan and industry questions Produce comprehensive Due Diligence analyses for selected plan sponsor clients or prospects

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Due Diligence Process

Opportunity Info Providers Receive From 401kExchange.....

Fund Lineup Plan Type Plan Asset Details Fund Lineup Participants Eligibles Location Info # of Education Meetings Per Location Name of Payroll Vendor Payroll Cycle Payroll Locations Payroll Submit Electronically Loans Allowed # of Loans Self-Directed Brokerage Advisor Compensation

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Due Diligence Process Plan Level Info 401kExchange Receives From Providers.....

Section 1: Plan Fees & Expenses

Installation / Conversion Rate Plan Installation / Conversion Rate Participant Annual Base Per Plan Per Eligible Rate Per Participant Rate Investment Management Fees Wrap Fee 12(b)1 Sub-ta Rate Additional Placement Fee CDSC / Surrender / M&E Total Asset Fee Custom Enrollment Materials

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Additional Education or Enrollment Meetings Annual Plan Investment Review Prepare Adoption Agreement Prepare Plan Amendments Prepare Summary Plan Description Prepare Summary Annual Report Prepare Signature Ready IRS Form 5500 Compliance Testing Detail Contribution Calculations -Profit Sharing, QNEC, QMAC Loan Fees Distribution Fees Education & Advice Fees

Due Diligence Process Corporate Level Info 401kExchange Receives From Providers

Section 2: Market Overview and Competitive Comparisons

Provider Name Provider Authored Corporate Comments 401kExchange Corporate Comments DC Product Category Record Keeper Also Investment Manager Markets Served Retirement Plan Assets Under Management Years in Industry Total DC Assets Total 401(k) Assets 401(k) Assets In Proprietary Investments Total # 401(k) Plans Under Management

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Average Client Tenure Average 401(k) Plan Assets / Participants Average Employee Size Median Employee Size DB Product Category Total DB Assets Total DB Assets In Proprietary Investments Total DB Plans Under Management Total TRO Plans Under Management Corporate Bond Rating: Standard & Poor's Corporate Bond Rating: Moody's Corporate Bond Rating: AM Best

Due Diligence Process Corporate Level Info 401kExchange Receives From Providers

Section 2: Market Overview and Competitive Comparisons (Cont.)

Number of Employees in DC Group External Sales Representatives Internal Sales Representatives External Service Reps Enrollment Specialists Loyalty, Rating (%high/low medium) In DC Market for long Tenure Recommend Y/N% Quality of Recommendation Consider Additional Services (if offered) Currently Searching Considering a Search

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Easy to do Business with Offer Innovative Solutions Minimizes Administrative Burden Flexible in adjusting operating procedures Understand your needs Has Resources Well Known/ Respected Brand among Sponsors Offers the latest/Best Technology % Relationships formed by Broker Satisfaction with Broker

Due Diligence Process Corporate Level Info 401kExchange Receives From Providers

Section 2: Market Overview and · Does Provider Disclose Fees Competitive Comparisons (Cont.)· Satisfaction with disclosure? (NET Satisfied)

Recordkeeper Provides Dedicated RM Satisfaction with RM Plans Per RM Recordkeeper Provides Dedicated PC Satisfaction with PC Plans Per PC % of Plans Under Management by Employee Size Participation Rate Company Match Asset Allocation Deferral Rates Rates of Return

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Due Diligence Process Product Level Info 401kExchange Receives From Providers

Section 3: Product Profile

Provider Name Product Name Offers Service Guarantees ** Last Product Update Recordkeeping Relationship Recordkeeping Platform Provider Authored Platform Notes Auto k Features ** Auto Enrollment Auto Deferral Increase Auto Rebalancing Life Stage/Style Funds Age Appropriate Default Investment

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** Indicates Area of Interest In Service Guarantee Policy

Investment Details Management Strategy Maximum Plan Level Funds Total Number of Funds Available Proprietary Fund Requirement Number of Proprietary Funds Available Proprietary Share Classes Available Outside Fund Families Total Number of Outside Funds Available Outside Share Classes Average # of Investment options Average Assets in Proprietary Funds Investment Policy Statement Provides IPS Monitoring **

Due Diligence Process Product Level Info 401kExchange Receives From Providers

Section 3: Product Profile (Cont.)

Conversion Duration / Blackout Period ** Client Visit / Kickoff Meeting ** Share or Unit Accounting Allow Company Stock Prepare Adoption Agreement Prepare Summary Plan Description Prepare Summary Annual Report Prepare Signature Ready IRS Form 5500 401(k) / 401(m) - ADP / ACP Testing ** 402(g) - Deferral Limit Testing ** 415 - Annual Additions Testing ** 416 - Top Heavy Testing ** 410(b) - Minimum Coverage Testing **

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** Indicates Area of Interest In Service Guarantee Policy

Prepares Contribution Calculations ** Annual Fiduciary Reports ** Ad-hoc Reports Investing Contributions ** Electronically Linked to Trust / Custodian Statements ** Participant Distributions ** Participant Transaction Confirmations ** Allocate Earnings ** Prepare 1099's ** Phone Operator Pick-up Rate Phone Operator Drop Rate Phone Operator Hold Rate

Due Diligence Process Product Level Info 401kExchange Receives From Providers

Section 3: Product Profile (Cont.)

Spanish Speaking Additional Languages Hours of Operations for Voice Response Provide Live Operators Number of Operators Series 6 or 7 licensed Direct Dial Relationship Manager Direct Dial Plan Coordinator Plan Sponsor Internet Access ** Account Balances By Fund By Source Vesting Account Balance

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** Indicates Area of Interest In Service Guarantee Policy

· Loan Balance · Loan Modeling · Online Compliance Testing · Provide Multiple Login Access · Offers "Push" Reporting Technology Participant Internet Access Account Balances By Fund By Source Vested Account Balance Loan Balance Loan Modeling

Due Diligence Process Product Level Info 401kExchange Receives From Providers

Section 3: Product Profile (Cont.)

Rate for Mailing Statements to Employees Education / Communication # of Meeting Offered Custom Enrollment Materials Group Meetings One-on-One Meetings Custom Education Materials Newsletters Asset Allocation Assistance Education Provider Name (Advice Provider) Third Party Education Provider Provider Name Advice Style: Guidance or Advice Risk Tolerance Quiz "On-Target" Indicator Use Outside Assets in Models Suggest Asset Allocation

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** Indicates Area of Interest In Service Guarantee Policy

Due Diligence Process DCP Data Published in Reports.....

Section 4: DCP Satisfaction Comparisons

Overall Satisfaction Recordkeeping Services Satisfaction Value / Cost Satisfaction Provider Fee Disclosure Satisfaction Proprietary Investment Satisfaction Relationship Manager Section Plan Coordinator Satisfaction Participant Education Satisfaction ERISA Services Satisfaction Plan Sponsor Website Satisfaction Participant Web Site Satisfaction Participant Statement Satisfaction Interactive Voice Response Satisfaction

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Participant Call Center Representative Satisfaction

Due Diligence Service Sample Report Page: Expenses

Annual Fee Breakdown Description Investment Expenses - Investment Manager Fee 1 - Broker - Dealer 12(b)(1) Fee 2 - Provider 12(b)(1) Fee 3 - Sub-Transfer Agency Fees 4 - Additional Placement Fees 4 Total Investment Fees Paid + Record Keeping Fees to Provider Total Annual Expenses Incumbent Provider $406,220 $274,746 $93,910 $0 $37,564 $0 $406,220 $15,760 $421,980 Industry Standard $561,245 $364,809 $140,311 $0 $56,124 $0 $561,245 $38,685 $599,930 Sample Provider A $279,015 $166,323 $93,910 $0 $18,782 $0 $279,015 $40,400 $319,415 Sample Provider B $498,281 $359,294 $93,910 $0 $45,077 $0 $498,281 $35,625 $533,906 Sample Provider C $525,285 $283,871 $93,910 $105,057 $42,447 $0 $525,285 $24,175 $549,460

1 - Fees paid to Investment Manager for portfolio management. 2, 3 - Fees paid to plan fiduciary to provide ongoing education and investment advice. In the case of the "Broker / Dealer", this fee would be split between the two parties. 4 - Fees paid to plan record keeping provider to offset costs associated with administering participant accounts.

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Due Diligence Service Sample Report Page: DCP Ratings

401kNavigator Provider Satisfaction Ranking

Satisfaction with Employee Education

------------------------------------------------Q4.2

100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5

Norm*

Norm*

* DCP2004 Norm 44%

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Due Diligence Service Sample Report Page: 401kExchange Ratings

401kExchange Ratings ­ 401kScout Report

Under $1 Million

Survey Overview Total # of Companies Surveyed Market Share by Companies Surveyed Total Assets in Plans Surveyed (in Thousands) Market Share by Assets (in Thousands) Total # of Dissatisfied Companies Numeric Rating Alpha Rating 20 Provider Totals Market Totals

$1 Million - $10 Million

Provider Totals Market Totals

$10 Million - $100 Million

Provider Totals Market Totals

43

6,918

41

10,480

NA

1,056

0.62%

100.00%

0.39%

100.00%

NA

100.00%

$19,695

$3,751,260

$93,379

$27,631,711

NA

$25,779,711

0.53%

100.00%

0.34%

100.00%

NA

100.00%

2 4.09 AAA

757 3.64

3 4.07 AAA

1,015 3.66

NA NA NA

139 3.55

Due Diligence Service Sample Report Page: 401kExchange Ratings

401kExchange Ratings ­ 401kScout Report

Could Improve Upon Not satisfied with Investment Options Poor Communication or Education Poor Fund Performance Fees are too High Thinking of Changing/Actively searching 6.98% 8.19% 17.07% 10.41% NA 8.01%

20.93% 18.60% 37.21%

24.60% 23.47% 45.17%

12.20% 21.95% 19.51%

23.05% 21.22% 39.83%

NA NA NA

23.79% 24.44% 36.59%

4.65%

9.10%

7.32%

8.93%

NA

13.81%

Does Best Fees Investment Options Employee Education Fund Performance 21 16.28% 23.26% 30.23% 27.91% 11.18% 30.85% 25.12% 22.43% 21.95% 26.83% 39.02% 21.95% 15.29% 30.01% 28.50% 24.18% NA NA NA NA 12.79% 28.05% 22.11% 18.04%

Investment Due Diligence Support Services

Plan sponsors want their plan advisor to assist in the selection and monitoring of plan funds. They also want easy to understand reports. The Fiduciary Investment Reporting Manager (FiRM) from 401kExchange and the Center for Fiduciary Management provides an integration of investment policy and compliance monitoring for retirement plan sponsors. This tool is exactly what sales professional need to support plan sponsors in fulfilling their fiduciary responsibility and is also a powerful selling tool. Users can easily set up monitoring criteria (performance, risk, expense ratio, tenure), instantly track funds by client, and conduct a thorough fund review of all clients' investment choices in just a few minutes. FiRM includes Fiduciary and 404(c) Checklists to promote discussion of plan sponsor responsibilities and demonstrate the retirement advisor's value-added service.

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Investment Due Diligence Sample Report Page: IP Criteria

FiRM Investment Policy Criteria

Identify Investment Categories to be included. Evaluate investments by selecting up to 10 criteria from the following categories: Performance Risk Adjusted Return (Sharpe Ratio) Expenses Fund Management Morningstar Rating Volatility Set the passing score for each investment, i.e. ­ 6 out of 10.

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Investment Due Diligence Sample Report Page: Portfolio Analysis

FiRM Portfolio Analysis

The FiRM Portfolio Analysis provides an easy to understand graphical view of fund style coverage: Equity Fixed Income Foreign World Specialty Easily displays where gaps exists in the style coverage of the portfolio.

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Investment Due Diligence Sample Report Page: Summary Report

Based on IPS criteria Comparisons to peer averages and benchmarks Data is highlighted based on criteria comparisons

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Microsoft PowerPoint - Scout & Navigator Overview v2.1