Transcript Slide 1

Kovack Advisors, Inc.
“Making the Right
Choices...for you”
Featuring...Capstone Asset Management,
Cumberland Advisors, FDx Advisors,
Groesbeck Investment Management,
Healthcare Trust of America and ”What’s Your
Advisory IQ?”
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Kovack Advisors, Inc.
Today we’re going to tell you...
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The KAI Investment Advisory Platform
Online Resources...”There’s no place like (KAI) Home”
Q&A
PM
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New Technology
Capturing Lost Revenue Through Program Expansion
What’s Hot – What’s Not...Removing Emotion
The Relationship & Focusing on What You CAN Control
Fiduci-WHAT?
Resources
Advisory IQ Question #1: Assets in fee-based managed investment solutions comprise what percentage of the
overall retail intermediary market?
A. 9%
B. 17%
C. 31%
Answer: B
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Kovack Advisors, Inc.
The KAI Investment Advisory Platform
The Right Solutions for You and Your Clients
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CHOICE Advisor
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CHOICE SMA
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Professionally managed, multi-strategy mutual fund wrap
investment program (Principled Portfolio Solutions – Ron Madey)
CHOICE UMA
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Access to disciplined, repeatable and time-tested institutional
investment managers
CHOICE Fund
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Non-discretionary, Advisor-directed, fee-based brokerage account
Uses a combination of investment vehicles in one “core” account
CHOICE Annuity
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Used with existing VA investments
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Kovack Advisors, Inc.
CHOICE Advisor: Non-Discretionary / Advisor-Directed
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Standard Account
 NFS
 Pershing
 20 Basis Point Cost to
Advisor
 $19.50 Transaction
Charge to Client
 $50,000 Household
Minimum
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Optional Account
 NFS
 Pershing
 40 Basis Point Cost to
Advisor
 No Transaction Fee to
Client
 $50,000 Per Account
Minimum
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Kovack Advisors, Inc.
CHOICE SMA: Professional Third-Party Investment Management
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Access to industry-leading Investment Managers
Stocks (All Cap, Large, Mid, SMID, Small, Micro,
International, Global) Bonds (taxable/exempt), Balanced,
REIT, ETFs
Discretionary Trading Authority
90 Basis Points Average Cost to Rep
$100,000 Average Account Minimum
Custom Client Presentations
Quarterly conference calls
One-on-one client meetings
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Kovack Advisors, Inc.
CHOICE SMA: Current Manager / Discipline List
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AllianceBernstein
Capstone Asset Management
Clover Capital Management
Cumberland Advisors
Davis Selected Advisors
Forward Uniplan Advisors
Gannet Welsh & Kotler
Geneva Investment Management
Groesbeck Investment Management
Insight Capital Research & Management
John Hancock
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Lotsoff Capital Mgmt.
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MacquarieAllegiance
MFC Global Investment Mgmt.
Navellier & Associates
Newgate Capital Mgmt.
Pinnacle Associates
The Roosevelt Investment Group
Sovereign Asset Mgmt.
Transamerica Investment Mgmt.
ValueWorks LLC
Washington Crossing Advisors
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Advisory IQ Question #2: True or False? From 1Q06 – 3Q08, the market share of SMA assets declined while
increases were realized in Mutual Fund Advisory, Rep as Portfolio Manager an UMA segments.
Answer: True – SMA market share fell 10%
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Kovack Advisors, Inc.
CHOICE UMA: Unified Managed Account
Definition: The unified managed account is an evolution of the separate account,
which is similar in that it is a professionally managed account which is rebalanced
often but only contains one type of investment instrument (such as mutual funds). If
an investor wanted to have a well-diversified portfolio of stocks, bonds and mutual
funds, he or she would need to open three separate accounts. The UMA removes the
need to have more than one account and combines all of the assets into one
account with a single registration. Source: Investopedia.com
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Kovack Advisors, Inc.
CHOICE Fund: Professionally Managed Multi-Strategy Mutual Fund Wrap
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10 Mutual Fund Models (5 Taxable / 5 Tax Exempt)
$30,000 account minimum
$135,000 average account size
Financial & Intellectual/Human Capital
Advisory IQ Question #3: According to a recent MMI study, what segment of the managed investment solution
industry do investment managers expect the greatest opportunity for growth?
A.
B.
C.
Mutual Fund Advisory
SMA
UMA
Answer: C
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Kovack Advisors, Inc.
CHOICE Annuity: Used w/ Existing VA Investments
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Advisor Directed
40 Basis Point Cost to Advisor
Bill from Annuity or Brokerage Account
Not Paid on Payout Grid
$25,000 Minimum
Most Annuity Companies
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Kovack Advisors, Inc.
Financial Plans:
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Financial Profiles
Kettley’s
NaviPlan
Thomson One (Through NFS)*
Set your own fee schedules
Provide Kovack Advisors a copy for compliance
Paid on your payout level
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Kovack Advisors, Inc.
What We Provide:
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Billing- Monthly For New Accounts and Quarterly For All
Accounts
Performance Reports- Quarterly
Account Reconciliation
Drift Monitoring
Technology- Website & Advisory Platform
Sales & Marketing Support
Advisory IQ Question #4: Recent research by MMI and Dover Financial Research found that what percentage of all
financial advisors have a portion of their book ($10 million or more) in fee-based advisory business?
A.
B.
C.
10%
40%
70%
Answer: 40%
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Kovack Advisors, Inc.
Online Resources...”There’s no place like (KAI) Home”
 www.kovackadvisors.com
Username: kai
Password: advisor
 Program Overviews
 Account Opening/Funding Instructions
 Account Paperwork
 E-Mail Archives
 Marketing Library
Advisory IQ Question #5: What broad trend has occurred over the last few years in the managed solutions
industry?
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B.
C.
A shift away from product-specific solutions toward holistic wealth management solutions.
A shift away from holistic wealth management solutions toward product-specific solutions.
Sponsor firms acquiring asset management firms.
Answer: A
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Kovack Advisors, Inc.
Q&A... Here are some to break the ice
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Are KAI forms available on LaserApp?
What’s the “average” fee?
Can I fund an account with securities or, in the case of mutual
fund wrap, with mutual funds?
When am I paid?
How much should I discount my business?
Who’s responsible for firing a money manager?
Advisory IQ Question #6: What percentage of assets in the managed investment solutions industry are in UMA?
A.
B.
C.
3%
21%
49%
Answer: 3%
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Kovack Advisors, Inc.
Mr. David R. Kotok, Chairman and Chief Investment Officer
of Cumberland Advisors - Outlook for the Economy and
Financial Markets, October 2009
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David R. Kotok is the Chairman and Chief Investment Officer of Cumberland Advisors. He
co-founded the firm in 1973 and has guided its investment strategy from inception. Mr. Kotok
holds a B.S. degree in economics from The Wharton School as well as dual master’s
degrees from the University of Pennsylvania.
Mr. Kotok maintains an active global presence as the Director and Program Chairman of the
Global Interdependence Center (GIC), a Philadelphia-based global trade and monetary
policy think tank. Mr. Kotok is the global chair of the GIC 2009-2010 Capital Markets Series
that will be held in successive meetings in Vietnam, China, Chile, Czech Republic, France,
and Philadelphia. He most recently chaired the GIC 2009 Food & Water Conference Series
with meetings held in Philadelphia, Paris, Livingstone (Zambia), and Singapore.
Mr. Kotok’s articles and financial market commentary have appeared in The New York Times,
The Wall Street Journal, Barron's, and other publications. He is a frequent contributor to
CNBC programs, including Morning Call, Power Lunch, Kudlow & Company, Squawk on the
Street, Squawk Box Asia, and Worldwide Exchange.
Mr. Kotok is a member of the National Business Economics Issues Council (NBEIC), the
National Association for Business Economics (NABE), the Philadelphia Council for Business
Economics (PCBE), and the Philadelphia Financial Economists Group (PFEG). He has also
served as a Commissioner of the Delaware River Port Authority (DRPA), on the Treasury
Transition Teams for New Jersey Governors Kean and Whitman, on the board of the New
Jersey Economic Development Authority, and as Chairman of the New Jersey Casino
Reinvestment Development Authority.
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Kovack Advisors, Inc.
Mr. Peter M. Demirali, Vice President and Portfolio Manager
of Cumberland Advisors - Outlook for the Economy and
Financial Markets, October 2009
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Mr. Demirali joined Cumberland Advisors in 2002 as portfolio manager for Cumberland
Advisors Taxable Bond style.
Prior to that, Peter was a Senior Portfolio Manager at Smith Barney Asset Management from
1990 to 1999. In that position, he initiated a corporate bond component for taxable fixed
income portfolios. From 1999 to 2002, he was a partner in Anval, Inc., a commercial real
estate brokerage company where he successfully developed new territories and clients for
his firm. He traded zero coupon bonds at Yamaichi International, a Japanese securities
dealer from 1987 to 1989. Peter began his career at Chemical Bank from 1983 to 1987. At
Chemical, he traded short and intermediate zero coupon bonds and Treasuries.
His comments and analysis have appeared in Bloomberg Business News, Barrons, and The
Bond Buyer. He has appeared on CNBC, Fox Business News as well as Bloomberg
Television.
Mr. Demirali holds a Bachelor of Science in Business Administration from Georgetown
University. He is a member of the Philadelphia Council of Business. Peter resides in
Mendham, New Jersey with his wife and son.
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Kovack Advisors, Inc.
Mr. Alex MacGillivray - Healthcare Trust of America, Inc.
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Focusing on the Eastern Division, Mr. MacGillivray is responsible for developing and
implementing sales strategies, coordinating marketing and sales efforts and increasing the
number of selling agreements with retail broker-dealers.
Mr. MacGillivray brings extensive experience to Realty Capital Securities. Most recently,
Alex served as managing director and President of his own 1031 wealth management
company. He previously held key executive positions with three nationally recognized real
estate sponsors, and has served as general partner and principal in numerous private
placement equity offerings, specializing in structured finance and sales-leaseback
financing.
Mr. MacGillivray received his Bachelor of Arts in Psychology from Creighton University and
holds FINRA Series 7, 63 and 26 licenses.
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Kovack Advisors, Inc.
LUNCH!
12:00 – 1:00PM: Buffet Lunch and Networking –
Grand Foyer
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Kovack Advisors, Inc.
PM
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New Technology
Capturing Lost Revenue through Product Expansion
What’s Hot – What’s Not...Removing Emotion
The Relationship & Focusing on What You CAN Control
Fiduci-WHAT?
Resources
Advisory IQ Question #7: Over the last five years, the average all-in costs (i.e. advice, clearing/custody, manager
fees) has held relatively steady at approximately:
A.
B.
C.
125 bps
170 bps
200 bps
Answer: B
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Kovack Advisors, Inc.
Mr. Scott Frakes, Vice President and Mr. Scott Wynant, Senior Vice
President of Capstone Asset Management Co. – Investing in Retirement
The Game Has Changed...Or Has It?
SCOTT FRAKES
Vice President
BA - Bowling Green University
2001-present: Capstone Asset Management Company
1996-2001: A.G. Edwards & Sons, Inc.
Series 7 Registered Representative
SCOTT WYNANT
Senior Vice President
BA University of Oregon
2008-Present: Capstone Asset Management Company
1997-2008: AG Financial Solutions
1982-1997: Shearson Lehman Brothers Smith Barney
1978-1982: Sutton Financial Corporation
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Kovack Advisors, Inc.
BREAK – Sponsored by Capstone Asset Management
2:45 – 3:15PM: Afternoon Snack Break –
Grand Foyer
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Kovack Advisors, Inc.
Mr. Robert P. Dainesi, Executive Vice President of Groesbeck Investment
Management – Dividend Investing and the Growth of Income Process
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Mr. Dainesi is the Director of Research and a portfolio manager. He joined the firm in
November 1993 and has 21 years of experience as an investment professional. His
security analysis experience includes following several economic sectors and many
industry groups. He has been a portfolio manager since 1991. He was a security
analyst at Value Line and a portfolio manager with Sturdivant & Co. Prior to joining
the firm, Mr. Dainesi was a portfolio manager and security analyst with Asiel & Co. Mr.
Dainesi earned a BA degree in Economics from Queens College and an MBA in
Finance from Bernard M. Baruch College. He is a member of the New York Society of
Security Analysts and the CFA Institute.
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Kovack Advisors, Inc.
Mr. Ron Madey, CFA, Chief Investment Officer of Principled Portfolio
Solutions – Foundations for Practice Growth and Client Success
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Ronald Madey is responsible for providing research and investment solutions to FDx Advisors, the renamed
SunGard Advisor Technologies business acquired by FolioDynamix in 2008. Before joining SunGard, Mr. Madey
was vice president, National Director of Investments at Lincoln Financial Advisors/Sagemark Consulting. While
there, he established a scalable, institutional quality investment process and designed sophisticated wealth
management technologies utilizing Monte Carlo-based investment planning tools to serve the high net worth
marketplace. Prior to joining Lincoln, Mr. Madey was National Director of Asset Consulting Services at Towers
Perrin, where he was responsible for overseeing the firm’s asset consulting, asset allocation modeling and
investment manager research units. Earlier, Mr. Madey held senior positions in portfolio management, research
and proprietary trading with DuPont Capital Management, a subsidiary of E. I. du Pont de Nemours & Company,
as well as at Bridgewater Associates and Credit Lyonnais Securities.
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During his almost 25 years in investment management, consulting and financial services, Mr. Madey has applied
risk-controlled investment strategies to areas ranging from fixed income portfolio management and multi-manager
portfolio construction, to asset allocation and asset-liability management. He has spoken publicly on wealth
management, investment strategy, risk management and liability driven investing at conferences for the American
Bankers Association, the Money Management Institute, the CFA Institute, the Institutional Investor Institute and the
Investment Management Institute. Mr. Madey is also a co-author of a Journal of Portfolio Management article on
the "Advantages of Multi-period Portfolio Models."
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Mr. Madey holds a bachelor of business administration, cum laude, in finance and real estate, and a MBA, with a
focus on planning and strategy, from Kent State University. He has a CFA and is a member of the CFA Institute
and the CFA Society of Philadelphia.
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Kovack Advisors, Inc.
PM Cont...
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Capturing Lost Revenue Through Program Expansion
What’s Hot – What’s Not...Removing Emotion
The Relationship & Focusing on What You CAN Control
Fiduci-WHAT?
Resources
Advisory IQ Question #8: True or False? The trend toward bundling fees has increased in recent years.
False – unbundling of fees is increasing
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Kovack Advisors, Inc.
What’s Hot – What’s Not...Focusing on What You CAN Control
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Kovack Advisors, Inc.
What’s Hot – What’s Not...Focusing on What You CAN Control Cont...
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Kovack Advisors, Inc.
What’s Hot – What’s Not...Focusing on What You CAN Control Cont...
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Kovack Advisors, Inc.
Fiduci-WHAT?
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Kovack Advisors, Inc.
Resources
www.kovackadvisors.com
Marketing
Material
HOT
OFF THE PRESS Slimjim!
“INVEST
Tips,
FOR LIFE” Client Brochure
Tools, & Tactics, KAI News & Notices, Meet Your Manager
Manager
Custom
Profiles, Comparisons, & Manager Returns Sheets
Client Presentations
www.kacfinancialservices.com
Advisory IQ Question #9: True or False? The market share of the managed investment solutions industry
controlled by wirehouse firms increased from 2Q08 – 2Q09.
False – Decreased from 68% to 60%.
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Kovack Advisors, Inc.
Chris Mills
Executive Vice President
Kovack Advisors, Inc.
Phone: 954-670-0617
E-mail: [email protected]
Ryan R. Wyllys
Vice President
Kovack Advisors, Inc.
Phone: 954-670-8707
E-mail: [email protected]
Regina Schumaker
Executive Administrative Assistant
Kovack Advisors, Inc.
Phone: 954-670-0621
E-mail: [email protected]
We look forward to being a partner in
the growth of your Advisory Practice!
Advisory IQ Question #10: Based on a recent Dover/MMI study, sponsor firms expect to convert what percentage
of their SMA assets to UMA?
A.
B.
C.
None
25%
50%
Answer: 50%
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