Brighton FinancialPlanning, Inc.Brighton FinancialPlanning, Inc.

Brighton Financial Planning, Inc.

Investment Management &

Advisory Services

Brighton FinancialPlanning, Inc.

Brighton Financial Planning, Inc.

• 25 year old organization

– Local firm based in Clinton

• Emphasis on investment management, advisory and estate/financial planning

– Extensive experience working with both individuals and institutions

• 3 Advisors with average experience of 30 years

– Advisors possess the CFP or CFA designations

– 2 advisors have advanced degrees in business and finance

• High commitment to client service

• Fee-only

– Asset based fee, hourly advisory fees and/or flat rate for planning services

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Brighton FinancialPlanning, Inc.

Investment Management

• Develop Investment Policy Statement

– Acts as the guide for expectations and decision-making

• Components of IPS:

– Purpose of IPS

– Risk and return expecations

– Asset allocation (if applicable)

– Methodology for investment selection

– Approach to ongoing performance measurement

• Discretionary Management

– Define asset allocation

• Determined in conjunction with our clients

• Strive to meet client needs/expectations while acknowledging potential limitations

• Incorporate alternative assets when appropriate

• Select investments

– Emphasis is on open and closed-end mutual funds and ETFs

• Monitor/report/adjust asset allocation and investments

– Frequency is client specific

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Brighton FinancialPlanning, Inc.

Investment Advisory Services

• Endowment and Cash Management

– Establish an investment policy statement

• Same rationale as for retirement plans

• Acts as the guide for expectations and decision-making

– Components of IPS:

• Purpose of IPS

• Risk and return expecations

• Asset allocation (if applicable)

• Methodology for investment selection

• Approach to ongoing performance measurement

– Advisory/Management

• Write IPS

• Define asset allocation

• Select investments

• Monitor/report/adjust asset allocation and investments

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Brighton FinancialPlanning, Inc.

Investment Advisory Services

• Retirement Plans

– Investment Policy Statement

• Often neglected but a valuable tool

– Plan Design & Implementation

• What type of plan – 401k, 403b, 457, other non-qualified options

• Third Party Administrator

• Custodian

• Investment Selection

• Educational Services

– Ongoing Service

• Education for participants

• Managing relationship with vendors

• Reporting to plan sponsor (Board)

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Brighton FinancialPlanning, Inc.

Investment Policy Statement

• Benefits

– Documents sponsor’s decision making process

– Defines how the plan will meet ERISA 404a or 404c requirements

• 404a requires plan sponsors to act at the level of a knowledgeable investor when selecting investment options

• 404c covers plan participant protections

– 1) Implement an investment policy statement

– 2) Inform participants of intent to comply (done in plan summary document)

– 3) Provide quality investment education

– 4) Allow participants to make regular investment changes

– Ensures that decisions are driven by long-term perspectives

– Defines expectations for risk and return objectives

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Brighton FinancialPlanning, Inc.

Plan Design and Implementation

• Which plan?

– 401k

• Defined contribution plan

– Employee contributions

– Empoyer contributions optional (mandatory in Safe Harbor 401k)

– Eligibility no later than 1st anniversary of service

– Vesting can be structured

– Variety of investment options

– Loans can be possible

– Hardship withdrawals are possible

– 403b

• New rules move 403b closer to 401k structure

• 501c3 eligible

• Exempt from ERISA under certain conditions

• Not subject to discrimination testing

• Universal availability

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Brighton FinancialPlanning, Inc.

Plan Design and Implementation

• 457 Plans (often referred to as “Top-Hat” plans)

– Non-qualified

– Only available to highly compensated employees

– Can be established along side a 403b or 401k

– Cannot have loan provisions

• SIMPLE 401k

– For organizations with fewer than 100 employees

– Employee contribution limit of $11,500

– Employer MUST contribute

• Which plan is best for a client will depend on:

– 1) Expected participation

– 2) Degree of desired management involvement

– 3) Degree of flexibility desired

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Brighton FinancialPlanning, Inc.

Plan Design and Implementation

• Necessary vendors

– Third Party Administrator and Record-keeper

• Handles all procedural requirements

– Enrollment

– Statements

– Website

– Cashflows

– DOL/ERISA Compliance

• Brighton uses ExpertPlan

– Ranked among top TPAs (#2 recordkeeper in CFO Magazine’s 2008 401k Provider’s Buyers Guide)

– www.expertplan.com

– Custodian

• Holds all plan assets

• Maintains separate account for each participant

• Brighton uses either Charles Schwab or Matrix Group

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Brighton FinancialPlanning, Inc.

2009 Pension Plan Limitations

• Maximum employee contribution = $16,500

• Annual compensation limit = $245,000

• Key employee compensation = $160,000

• Highly compensated employee (HCE) = $110,000

• Catch-up provision (over 50 years old) = $5,500

• Maximium contribution (all sources) to DC plan = $49,000

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Brighton FinancialPlanning, Inc.

Considerations

• Which plan is best for a client?

• Has an investment policy statement been written and/or updated?

• Are investment options well diversified?

• Are employees fully participating in the plan?

• Are current educational offerings adequate?

• Is endowment well diversified?

• Is the allocation sensible and in adherence with IPS?

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Brighton FinancialPlanning, Inc.

Communication

• Website

– DC Plan – client account access

– Endowment – client account access & client portal access

• Monthly Bulletin

– Email – provides markets/economic commentary and topical features

• Survey

– Initial and ongoing survey to ensure highest quality client service

– Initial survey results will be used to build introductory presentations

• Meetings

– On-going, at least semi-annually to update participants on DC plan

– As requested to update management and Board on Endowment/Cash

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Brighton FinancialPlanning, Inc.

Why retain an Advisor?

• Create and/or modify existing investment policy statement

– DC Plan and Endowment

• Review and revise plan investment options

– Focus on well diversified, reasonable cost mutual fund options

– Average expense ratio for sample plan shown in appendix is 0.87%

• Improve educational sessions

– Focus on:

• Investment principles

• Value of tax-deferral

• Investment options

• Enable team to focus on business activities

– Fiduciary responsibilities remain

– I will provide frequent updates and will present to the Board as needed

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Brighton FinancialPlanning, Inc.

Why Brighton?

• Experience

– I have over 16 years financial services industry experience

– Individual and Institutional experience

• Understand the objectives and expectations of DC plan participants

• Understand the objectives and expectations for endowment assets

– Experienced at adjusting presentation to meet sophistication of audience

• Service

– We stress client service as a differentiating feature

– Available as often as needed – phone, email, in-person

• Local

– We are a part of the same community

– Easily accessible

– We will work hard for you

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Brighton FinancialPlanning, Inc.

John P. Middleton, CFA, CAIA Curriculum Vitae

• 2001 – 2008 – Invesco Quantitative Strategies Group, Invesco

– Senior Director and Client Portfolio Manager

• Managed over 50 institutional relationships with over $2 billion in assets

• Strategies included:

– Long-only domestic and global equity

– Absolute Return Strategies

• Clients included:

– Endowments and foundations

– Public and corporate pension funds

– Taft-Hartley plans

– Investment Companies (DIA and Invesco AIM)

• Responsibilities included:

– Advising plan sponsors and consultants regarding performance and market trends

– Researching and writing white papers on investment topics

– Competitive analysis

– Marketing support including finals presentations and public speaking engagements

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Brighton FinancialPlanning, Inc.

CV Continued

• 1999 – 2001 Mutual of America Capital Management

– Senior Vice President and Officer

• Responsibilities included:

– Initiating marketing to plan sponsors and consultants

– Competitive analysis

• 1992 – 1999 Raymond James Financial

– Head of Marketing and Client Service – Awad Asset Management

• Responsibilities included:

– Managing all client relationships for a $1 billion small cap manager

– Managing a small cap growth fund

• Education/Designations

– MBA – Finance, University of Tampa

– BA – Rutgers University

– Chartered Financial Analyst

– Chartered Alternative Investment Analyst

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