Investment Management and Trust Solutions

1. Wells Fargo Wealth Management Group The Private Bank Investment Management and Trust Solutions

2. Course Objectives After completing this course, you will be able to • Educate your clients about our Investment Management and our Trust and Estate solutions • Illustrate to your clients how our solutions align with our 12 Wealth Management Issues • Aid your clients in selecting integrated solutions to achieve their wealth management goals • During this course, you will access resources to support your efforts to deliver exceptional service to your clients

3. The Private Bank: Wealth Management Solutions Overview of Wealth Management Our Responsibility • Proactively engage our clients in an ongoing dialogue about their needs, their situation, their goals and concerns. • Initiate conversations that uncover topics of relevance to them, track the dialogue, and then play the role most clients expect of us — trusted advisor • Provide them with wealth management solutions based on their individual and family values, goals, and needs • Goal of ongoing exceptional service: client retention • Clients worked hard to build their wealth • Life circumstances change: financial affairs become more complicated

4. Client 12 Wealth Management Issues The Private Bank: Wealth Management Solutions The 12 Wealth Management Issues Make the commitment to • Understand the client’s goals • Analyze your client's situation • Advise your client • Evolve to adjust your client's wealth strategy Wealth strategy tailored to the client’s needs, aspirations, and goals • Represent issues that clients typically have with wealth planning • Our mission: help clients build, manage, preserve, and transfer their wealth • You must initiate the right kinds of conversations to begin the wealth management process Lifestyle objectives, philanthropic goals and vision for legacy Changing needs and circumstances Solutions that address their current and future goals

5. The Private Bank: Wealth Management Solutions The 12 Wealth Management Issues Use the 12 Wealth Management Issues as cues to understand the financial issues that a client needs to address. Ask your clients the right questions so that you can • Aid them in defining their goals and objectives • Educate them about strategies, techniques and solutions that address wealth management issues • Illustrate independent or integrated solutions to enable them to achieve their goals and objectives

6. The Private Bank: Wealth Management Solutions Wealth Management Toolkit Provides you with materials you can use to develop and build relationships with prospective and existing clients: • Business planning tools • Client relationship development tools • Compliance-approved letters • Planning templates

7. Click Forward on the navigation bar to continue. The Private Bank: Wealth Management Solutions Business scenario with a hypothetical client of The Private Bank Al and Sylvia Jonas want to establish revocable living trusts and fund them. Al has two children from a previous marriage and one grandchild. Al and Sylvia have one child together, Rachel, age 13, who has a disability that will prevent her from ever living independently. Sylvia is entitled to Al’s interest in their primary residence at his death and a QTIP marital deduction trust funded with $3 million, from which Sylvia is entitled to all of the income and discretionary principal for health and support. If Sylvia predeceases him, Al will be entitled only to Sylvia’s interest in their primary residence. Al is also interested in establishing an education account for his grandchild. He has a substantial IRA. He collects photographs of old barns and has one of the best collections in the country. He has been approached by several museums about either exhibiting at or donating his collection to their museums.

8. The Private Bank: Investment Management Solutions

9. Investment Management Solutions Solutions presented in this section • Strategic Portfolio • Short-Term Asset Management • Nelson Capital Management • Alternative Investments • Private Real Estate • WFAAM Hedge Funds • Private Equity • Wells Fargo Managed Portfolio • IM&T Direct

10. Click Forward on the navigation bar to continue. click Investment Management Solutions Overview of Investment Management Solutions include the following: • Objective investment management through a well-defined, consultative approach • A full range of investment tools and asset allocation strategies to support clients’ financial goals • Sophisticated investment strategies, including alternative solutions such as private-equity investing, commodities and hedge funds, when appropriate • Tax-sensitive asset management • Separately managed accounts that include third-party money managers • Portfolio customization, which can include strategies to deal with concentrated positions and liquidity management • Advanced investment performance reporting

11. Click Forward on the navigation bar to continue. click Investment Management Solutions Short-Term Asset Management (STAM) • Wealth Management Issue:1. Investments • An attractive alternative to cash equivalents, such as checking accounts, savings accounts, and money market funds • Appropriate for businesses in addition to high net worth individuals • Designed for investors who don't need daily liquidity on 100% of their money and who are looking for higher returns at a competitive fee • Minimum investment is $3 million

12. Click Forward on the navigation bar to continue. click Investment Management Solutions Nelson Capital Management • Wealth Management Issues:1. Investments9. Charitable gifting12. Distribution plan for wealth at death • A registered investment advisory firm and separate non-bank affiliate of Wells Fargo • Provides customized socially and environmentally responsible investing programs for high-net worth individuals, families, and institutions • Manages nearly $500 million for more than 400 high-net-worth clients across the country

13. Click Forward on the navigation bar to continue. Investment Management Solutions Alternative Investments Managed FuturesManaged futures offer investors access to the futures, forward and options markets through Commodity Trading Advisors (CTAs). Private Equity Private equities are stocks of privately-held companies. CommoditiesCommodities include industrial and precious metals, as well as energy resources such as natural gas and oil. Exchange FundsExchange funds allow investors to pool their appreciated stock. Each investor owns a pro-rata share of the fund, thereby achieving immediate diversification. Hedge FundsPrivately-organized pooled investment vehicles that invest primarily in publicly-traded securities, currencies, and their derivatives.

14. Click Forward on the navigation bar to continue. click Investment Management Solutions Alternative Investments • Wealth Management Issues:1. Investments • Provide an excellent opportunity to achieve diversification as well as offering these additional benefits: • Low correlation to other assets within a client’s portfolio • Many alternative investments offer a lower standard deviation than assets • Potential for enhanced portfolio returns • Increase portfolio diversification, which reduces risk • May also offer higher returns than traditional asset classes • Some alternative investments may be available to pre-qualified investors only.

15. Click Forward on the navigation bar to continue. click Investment Management Solutions Alternative Investments: Private Real Estate • Wealth Management Issues: 1. Investments • A well-diversified private real estate investment strategy providing • favorable overall returns • significant current income • low volatility • good diversification • Provide greater flexibility to the manager than public REITs over • the types of properties that may be owned • the types of value enhancement strategies employed • the amount of leverage that can be used

16. Click Forward on the navigation bar to continue. click Investment Management Solutions Alternative Investments: Wells Fargo Alternative Asset Management (WFAAM) • Wealth Management Issues:1. Investments • Wells Fargo Multi Strategy 50 and 100 Hedge Funds – for accredited investors   • Wells Fargo Hedge Fund Strategy Palette – for qualified purchasers • WFAAM Capital Partners, LLC – Single manager fund for qualified purchasers Get detailed information on these solutions on the WFAAM website (www.wfaam.com) upon completion of the WMG Private Placement course on PCSU. WFAAM is a registered investment adviser and a non-bank affiliate of Wells Fargo & Company and provides investment advisory services for proprietary private investment funds.

17. Click Forward on the navigation bar to continue. click Investment Management Solutions Alternative Investments: Private Equity • Wealth Management Issues:1. Investments • Provides attractive diversification benefits • Has the potential to deliver high returns • Offers investors exposure to new products and technologies that aren’t represented in the publicly traded debt and equity markets • Offers long-term portfolio returns while reducing the volatility of the overall portfolio • Appropriate for accredited investors who are able to endure the liquidity constraints of the asset class, have a relatively high tolerance for risk, and view it as a long-term investment

18. Click Forward on the navigation bar to continue. click Investment Management Solutions Wells Fargo Managed Portfolio (WFMP) IM&T Direct • Offers prospective clients direct access to wealth management services via telephone and internet • Investment managers help the client define investment objectives and implement a disciplined investment modeling process • Dedicated trust officers in the centers provide trust administration, in conjunction with the investment management services • Model portfolios developed by Wealth Management Group Investment Management • Portfolios designed for a spectrum of investment objectives, from conservative to aggressive • Low minimum investment of $250,000 • These solutions may be appropriate for your clients; however, since they target the affluent segment, not clients of The Private Bank, they may not be appropriate.

19. The Private Bank:Trust and Estate Solutions

20. Trust and Estate Solutions Solutions presented in this section • Personal Trusts • Directed Trusts • Estate Settlement Services • Custody Services • Investment Management for Qualified Plans • Irrevocable Life Insurance Trusts • Wealth Planning Services • Strategic Business Segments

21. Click Forward on the navigation bar to continue. Trust and Estate Solutions Overview of our comprehensive Trust and Estate solutions Estate Planning Custody Services Trust Account Administration Estate Settlement and Administration Specialized Trust Solutions We will help the client take a disciplined approach in order to build an appropriate estate plan. Acting as custodian of assets on the client’s behalf, we offer safekeeping, flexible trading arrangements, conversion assistance and comprehensive monthly statements. We provide a broad range of trust administration services, from bill paying and distributions to periodic performance statements. We provide comprehensive professional fiduciary services, including asset marshaling, asset valuation, comprehensive statements and accountings, assistance with tax preparation (through KPMG) and payment. We provide a wide range of trust solutions including charitable remainder and lead trusts, legacy trusts, insurance trusts and special needs trusts.

22. Trust and Estate Solutions Trusts: Personal and Directed • Wealth Management Issues 4. Qualified retirement plan/IRA Distribution6. Business succession planning7. Durable power of attorney 8. Gifting to children/descendents/others during life9 Charitable gifting10. Titling of assets11. Executor/successor trustee issues12. Distribution plan for wealth at death Personal Trust • Effective tool for wealth management and tax and estate planning purposes  • Beneficiaries: spouse, children, other family members, foundations or other legal entities. • Managed according to your client’s instructions by a designated Wells Fargo trustee Directed Trust • Wells Fargo as an administrative trustee; outside investment manager responsible for investment management • Investment trustee or committee comprised of the client's family members and/or advisors • Directs that the investment management be handled by client's investment managers • Can be both revocable and irrevocable trusts

23. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Estate Settlement Services • Wealth Management Issues:10. Titling of assets11. Executor/successor trustee issues 12. Distribution plan for wealth at death • Wells Fargo's Estate Settlement Services is a five-step process with measurable, time-bound goals. • Our dedicated professionals: • Locate legal documents, family members, and beneficiaries. • Initiate probate proceedings. • Safeguard, assemble, and inventory assets. • Raise necessary cash, pay debts and taxes, and complete probate proceedings. • Distribute assets in accordance with the governing instrument and state law.

24. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Custody Services • Wealth Management Issues:9. Charitable gifting10. Titling of assets11. Executor/successor trustee issues12. Distribution plan for wealth at death • Clients maintain control over their assets • The Wells Fargo Custody team handles the time-consuming account administrative and maintenance details • The assets are safeguarded in a depository that is separate from the bank's own assets

25. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Investment Management for Qualified Plans • Wealth Management Issues:1. Investments4. Qualified Retirement Plans10. Titling of assets • Investment management services for qualified plan assets of an entire plan or for an individual account as a part of a larger qualified plan • Investment managers trained in the management of qualified plan assets create a customized portfolio that meets the needs of the client while adhering to the guidelines described in the governing plan document

26. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Irrevocable Life Insurance Trusts (ILIT) • Wealth Management Issues:2. Insurance5. Corporate executive stock options6. Business Succession Planning10. Titling of assets12. Distribution plan for wealth at death • An estate planning tool designed to • minimize income and estate taxes • provide cash to pay estate taxes and expenses of administering an estate, without the need to liquidate non-liquid assets • For clients with either of the following: • Value of everything owned (estate), including the death benefit of the life insurance policies over $1,000,000 at the time of death if single and $2,000,000 if married or have a revocable living trust • Estate consists of a business or other assets that cannot be easily liquidated

27. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Wealth Planning • Wealth Management Issues:All twelve wealth management issues Wealth Planning is delivered locally (regionally) and with support of the Wealth Planning Center Wealth Planning Center • A think tank for new and creative ideas on client solutions that can be integrated into wealth plan analyses • Provides resources to regions for complex wealth plan issues • Available to work on any engagement involving a net worth over $25MM Wealth Planning Components and Strategies • A full complement of values-based strategies • Fee-based financial plans and planning support • Training for regions on the wealth planning process available in 2007

28. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Strategic Business Segments (SBS) • Business Advisory Group • Real Estate and Specialty Assets • Charitable Management Group • Private Foundations • Legacy Trust • Elder Services • Special Needs Trusts • International

29. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Business Advisory Group (BAG) • Wealth Management Issues:1. Investments6. Business succession planning8. Gifting to children/descendents/othersduring life9. Charitable gifting10. Titling of assets11. Executor/successor trustee issues12. Distribution plan for wealth at death • Provides valuable, highly-specialized services to private business owners through its Business Valuation Services and Closely Held Business teams • Helps owners of closely held assets protect their interests and transition them to the next generation

30. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Real Estate and Specialty Assets Group • Wealth Management Issues:1. Investments2. Insurance3. Liabilities8. Gifting to children/descendents/others9. Charitable gifting10. Titling of assets11. Executor/successor trustee issues12. Distribution plan for wealth at death Helps clients properly manage the portion of their wealth comprised of non-financial assets, such as real estate (commercial, industrial, agricultural, residential), oil, gas, and mineral assets, or loans, notes, and contracts

31. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Charitable Management Group (CMG) • Wealth Management Issues: 1. Investments4. Qualified retirement plan/IRA distribution5. Corporate executive stock options6. Business succession planning10. Titling of assets11. Executor/successor trustee issues12. Distribution plan for wealth at death. • Provides comprehensive custody, trust administration and investment management services for various planned giving vehicles • Provides comprehensive foundation administrative and management services including foundation development (strategic consulting) and grant administration Target Audience • High-net-worth individuals who use charitable giving as a part of their estate plans and want to leave a legacy of giving for future generations • Public charities

32. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Private Foundations • Wealth Management Issues: 1. Investments6. Business succession planning10. Titling of assets11. Executor/successor trustee issues12. Distribution plan for wealth at death • Clients and their families maintain significant control over how their money is spent • Clients may receive a significant tax benefit that can last several years • Wells Fargo Family Foundation and Grant Administration Services provides superior tactical and strategic guidance • We are able to help clients realize their philanthropic aspirations

33. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Legacy Trust Group • Wealth Management Issue: 1. Investments10. Titling of assets11. Executor/successor trustee issues Helps clients achieve their specific estate planning and financial goals through the use of a Legacy Trust. A Legacy Trust can remain in existence for multiple generations or in perpetuity (depending on the state), allowing high net worth individuals to avoid state taxes and multiple estate taxes on property passing to different generations of descendants.

34. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Elder Services Group • Wealth Management Issues:1. Investments2. Insurance3. Liabilities4. Qualified retirement plan/IRA distribution7. Durable power of Attorney8. Gifting to children/descendents/others 10. Titling of assets • Provides financial and life management services to our elderly clients • Develops a comprehensive personal and financial assessment • Implements an overall care plan at fees comparable to mutual funds

35. Click Forward on the navigation bar to continue. click Trust and Estate Solutions Special Needs Trusts Group • Wealth Management Issue: 1. Investments2. Insurance3. Liabilities4. Qualified retirement plan/IRA distribution7. Durable power of Attorney10. Titling of assets11. Executor/successor trustee issues12. Distribution plan for wealth at death • SNT: designed for a disabled person to maintain government aid supplemented by funds for their care via a court order or a testamentary trust • SNT Group coordinates administration, management care providers, attorneys, CPAs, and other professionals engaged in addressing the needs of the client

36. Click Forward on the navigation bar to continue. click Trust and Estate Solutions International Offers various services for Non-Resident Aliens (NRA) including: • Investment Management • Trust and Estate Management • Private Banking • Full-Service Brokerage for residents of select countries

37. The Private Bank: Example IM&T Client Case Study

38. Click Forward on the navigation bar to continue. The Private Bank  IM&T Solutions Client Case Study Client’s Concerns • Wealth transfer considerations • Estate planning • Education • Special needs • Investment planning • Insurance • Legacy/charitable giving • Asset protection • Current and future cash flow needs, investment objectives, risk tolerance • Clear communication and implementation of their legacy goals • Beneficiary designations in case of divorce Al and Sylvia Jonas want to establish revocable living trusts and fund them. Al has two children from a previous marriage and one grandchild. Al and Sylvia have one child together, Rachel, age 13, who has a disability that will prevent her from ever living independently. Sylvia is entitled to Al’s interest in their primary residence at his death and a QTIP marital deduction trust funded with $3 million, from which Sylvia is entitled to all of the income and discretionary principal for health and support. If Sylvia predeceases him, Al will be entitled only to Sylvia’s interest in their primary residence. Al is also interested in establishing an education account for his grandchild. He has a substantial IRA. He collects photographs of old barns and has one of the best collections in the country. He has been approached by several museums about either exhibiting at or donating his collection to their museums.

39. Click Forward on the navigation bar to continue. The Private Bank  IM&T Solutions Client Case Study Solutions • All 12 Wealth Management Issues may apply to this scenario. • Possible Integrated Wealth Management solutions: • Strategic Portfolio • Short-term Asset Management or Alternative solutions • QTIP trust • Revocable living trusts • Qualified Retirement Plan/IRA • Trust for education needs • Estate settlement services • Irrevocable Life Insurance Trusts • Business Advisory Group for succession planning • Charitable Management Group for photograph collection • Special Needs Trust for Rachel • Legacy Trust for wealth distribution at death Al and Sylvia Jonas want to establish revocable living trusts and fund them. Al has two children from a previous marriage and one grandchild. Al and Sylvia have one child together, Rachel, age 13, who has a disability that will prevent her from ever living independently. Sylvia is entitled to Al’s interest in their primary residence at his death and a QTIP marital deduction trust funded with $3 million, from which Sylvia is entitled to all of the income and discretionary principal for health and support. If Sylvia predeceases him, Al will be entitled only to Sylvia’s interest in their primary residence. Al is also interested in establishing an education account for his grandchild. He has a substantial IRA. He collects photographs of old barns and has one of the best collections in the country. He has been approached by several museums about either exhibiting at or donating his collection to their museums.

40. Click Forward on the navigation bar to continue. The Private Bank  IM&T Solutions Client Case Study Benefits • Professional investment management • Avoiding probate • Maximum asset transfer • Reduce estate tax • Meet family education goals • Peace of mind for Rachel’s long-term care Al and Sylvia Jonas want to establish revocable living trusts and fund them. Al has two children from a previous marriage and one grandchild. Al and Sylvia have one child together, Rachel, age 13, who has a disability that will prevent her from ever living independently. Sylvia is entitled to Al’s interest in their primary residence at his death and a QTIP marital deduction trust funded with $3 million, from which Sylvia is entitled to all of the income and discretionary principal for health and support. If Sylvia predeceases him, Al will be entitled only to Sylvia’s interest in their primary residence. Al is also interested in establishing an education account for his grandchild. He has a substantial IRA. He collects photographs of old barns and has one of the best collections in the country. He has been approached by several museums about either exhibiting at or donating his collection to their museums.

41. Educate the client about our Investment Management and our Trust and Estate solutions • Illustrate to the client how our solutions align with our 12 Wealth Management Issues • Aid the client in selecting integrated solutions to achieve their wealth management goals The Private Bank: Client Scenario Practice

42. click The Private Bank  IM&T Solutions Client Scenario Practice – Distribution Plan for Wealth at Death Do the following: Click the treasure box to access the 12 Wealth Management Tools. Select the Distribution Plan for Wealth at Death tool. When it opens, print it. In the Client Notes section, identify the wealth management issues and the possible solutions to discuss with Joe. Client’s Possible Concerns Solutions • 12 Wealth Management Issues • IM&T Solutions Benefits Joe Huang, 62, is a practicing attorney and owns his own firm. He has a net worth of $25 MM with $10 MM in real estate holdings. Joe wants to create a plan to transfer assets to his three children when he dies.

43. Click Forward on the navigation bar to continue. The Private Bank  IM&T Solutions Client Scenario Practice – Distribution Plan for Wealth at Death Client’s Possible Concerns • Highly leveraged in real estate • Gifting for children • Children inheriting wealth • Retirement • Selling the law practice • Need for minimizing taxes and handling control issues Solutions • All 12 Wealth Management Issues, except Corporate Executive Stock Options, may apply to this scenario • Possible IM&T solutions • Wealth Plan • Investment Management: Strategic Portfolio, Short-term Asset Management or Alternative solutions • Real Estate & Specialty Assets to manage real estate holdings • Revocable living trust • Qualified Retirement Plan/IRA • Irrevocable Life Insurance Trust (ILIT) • Business Advisory Group for succession planning • Charitable Management Group for philanthropy • Legacy Trust for wealth distribution at death Benefits • Insurance proceeds to pay taxes • Estate plan to hold or distribute assets • Buy/sell agreement for the law practice • Tailored investment portfolio for real estate holdings Joe Huang, 62, is a practicing attorney and owns his own firm. He has a net worth of $25 MM with $10 MM in real estate holdings. Joe wants to create a plan to transfer assets to his three children when he dies.

44. Summary The Next Stage You should now be able to: • Educate your clients about our Investment Management and our Trust and Estate solutions • Illustrate to your clients how our solutions align with the 12 Wealth Management Issues • Aid your clients in selecting integrated solutions that help them achieve their wealth planning goals

45. Click Forward on the navigation bar to continue. Other Support and Resources Important Links Please bookmark these links to the resources and support available to help you deliver exceptional service to your clients. • Wealth Management Toolkit • Consultative Sales, Business Development and Coaching Resources on PCSU • Private Bank National Sales Call • Managers’ Coaching Tools • 160+ Sample Interview Questions • Print on Demand

46. Congratulations! Course Completed • You have completed the course • Your transcript will be updated to reflect your completion status • If you have any questions, please send an email to PCSL&D@wellsfargo.com • You can access the course at any time through your Transcripts • You may now close this browser window