Financial Services:Maximizing Our

Opportunity

Industry UpdateIndustry Update

In the groundbreaking report from the Mortgage Bankers Association's Council to Shape Change, several important trends were uncovered:

Consolidation – Strong get stronger Regulation – More (always)

Convergence

Industry UpdateIndustry Update

“The holy grail of the large integrated financial services companies will be the capability to cross-sell a variety of financial products…

The largest mortgage bankers will not operate as stand-alone organizations but will more likely operate as part of a larger integrated financial services firm…”

MBA Staff MapQuesting the industry October 3, 2006

We’re Living in Changing Times

We’re Living in We’re Living in Changing TimesChanging Times

We’re Living in We’re Living in Changing TimesChanging Times

3 Reasons:3 Reasons:

Consumer demandConsumer demand

Creates loan demandCreates loan demand

Attract, retain, and reward Attract, retain, and reward associatesassociates

Consumers Need HelpConsumers Need Help

Have little or no financial education

Understand little about debt management

Understand even less about asset accumulation and creating wealth

Have no real plans to achieve financial security

Consumers Need HelpConsumers Need Help

Consumer Debt is more than $2 trillion

College cost doubled from 1990 to 2005

Shift in workplace from pensions to 401Ks

Social Security isn’t so secure

MASSIVE DEBTMASSIVE DEBT

Consumers Need HelpConsumers Need Help

1980s = 10 %

1990s = 5%

2000s = 1%

WEAK SAVINGS HABITSWEAK SAVINGS HABITS

Savings as a share of disposable income:

The Financial Services Industry is

the only industry in a position to solve these challenges!

Creates New Loan Creates New Loan DemandDemand

Consumers Need Help!Consumers Need Help!

Equity Management WorkshopsEquity Management Workshops

Client Workshops designed to educate and inspire

Debt Management

Equity Management

Asset Accumulation

The The ProblemProblem Household Expenses

Mortgage $2,000

Food/Bills $1,000

Car + Insurance $ 500

Credit Cards $ 500

Misc. $ 500

TOTAL BILLS $4,500

INCOME $4,500

DISCRETIONARY INCOME : -0-

SolutionSolution

New Cash Flow + $1,000 Without Cutting Back Lifestyle

Household Expenses

Mortgage $2,000

Food/Bills $1,000

Car $ 0

Credit Cards $ 0

Misc. $ 500

TOTAL BILLS $3,500

INCOME $4,500

What is it REALLY worth?What is it REALLY worth?

Save $500 per month for Emergency Fund

$6,000 saved for emergency use after 1 year

Invest $500 per month for 25 years

Could our clients use an extra Half Million Dollars at Retirement?

Growth @ 6%$346,000

Growth @ 8.5%$516,000

Asset AccumulationAsset Accumulation

What interest rate do you earn on equity?

Is Equity liquid?

Is Equity Safe from market Risk?

If we could earn a rate of return on Equity for our clients, would you want the extra money?

Federal Reserve Bank ArticleFederal Reserve Bank Article

Federal Reserve Bank ArticleFederal Reserve Bank Article

By accelerating mortgage payments instead of stashing the money in savings, 1 in 3 Americans are “giving up potentially important arbitrage gains.”

Report calls it a “Misallocation” of funds, costing Americans up to $1.5 Billion per year.

Savings provide “a good hedge against a combination of housing price risks and liquidity risk.”

Solution #1Solution #1

Or…

$2,000

The difference is The difference is $500$500

If we invest $500 per monthIf we invest $500 per monthover 30 years @ 8.5% =$825,000over 30 years @ 8.5% =$825,000

Then pay off loanThen pay off loan --($300,000)($300,000)

The client has The client has $525,000 $525,000

LevelLevel

Interest OnlyInterest OnlyMortgageMortgage

$1,500$1,500

Loan AmountLoan Amount

$300k$300k

$300k$300k

Solution #2Solution #2

However, not everyone lives in their However, not everyone lives in their

home for 30 years. Assuming we home for 30 years. Assuming we

live in our home for 7 years.live in our home for 7 years.

We invest $500 per month over We invest $500 per month over

7 years @ 8.5% :7 years @ 8.5% : $ 57,122 $ 57,122

After 7 years, the home may After 7 years, the home may

appreciate to appreciate to $400,000 $400,000

The client owes:The client owes: - ($300,000) - ($300,000)

Profit on sale of home is: $100,000Profit on sale of home is: $100,000

Client nets:Client nets: $157,122 $157,122

LevelLevel

Interest OnlyInterest OnlyMortgageMortgage

$1,500$1,500

$2,000

Loan AmountLoan Amount

$300k$300k

$300k$300k

Equity is GREATEquity is GREAT

Cash Is KING!Cash Is KING!

Marketing WorkshopsMarketing Workshops

LO invite existing clients

Flyers available for clients

Speakers educate and inspire clients to take action

Financial Services rep and LO jointly bring client forward

“Combining the offerings of mortgage and insurance products is common sense when you consider that as a Loan Officer we collect all the financial data upfront, giving us a clear picture of clients’ insurance/investment needs.”

Mike RadiBranch ManagerCharter Funding, San Diego

“Our first client investment seminar resulted in 5 new loans…‘three for one client!’ I can definitely see how Charter Insurance is going to be a key to our long-term growth in a changing market.”

Mike RadiBranch ManagerCharter Funding, San Diego

“As a result of the seminar, I have generated 3 new loans for a total of $931,500. Thanks for introducing me to these amazing concepts!”

Nick DawsonLoan OfficerCharter Funding, San Diego

The Charter, Great Southwest The Charter, Great Southwest Career OpportunityCareer Opportunity

Future productsMortgage ServiceRefinance

Purchase

ELOC

Primary Residence

Investment Property

OPPORTUNITY

InsuranceServices

Term-ROP TermUniversal Life

Equity Indexed LifeWealth

AccumulationProducts

P and CHomeowners

Insurance

Umbrella Policies

Charter’s PartnersCharter’s Partners

Solid companies

Proven track record

Household names

Financial RewardsFinancial Rewards

CompensationCompensation

Participate in workshops and additional income through increased organization

You can BE the advisor

You can TRAIN with an advisor

You can REFER to an advisor

Income SplitsIncome SplitsBased on a Level Of InvolvementBased on a Level Of Involvement

Referring Agent

25%Producing Agent

75%

Participating Agent

50%Producing Agent

50%

Producing Agent

70%Plus applicable management overrides

Based as a percent of filed payout

Compensation: Field PayoutsCompensation: Field Payouts

70% Producing Agent

9% District Agent/Branch

4% Regional Agent

Compensation: Agency BuildingCompensation: Agency Building

Agents

(20% O/R) 14%

2nd Generation(20% O/R) 2.8%

CompensationCompensation

Refinance

$400,000 Loan Amount

x 2% (points)

$8,000

x 60% Commission

$4,800: x 3 Clients

Equity Indexed Life

$ 500 per month

x12

$ 6,000

x70%

$4,200: x 3 Clients

$14,400 Mortgage Income $12,600 Financial Services Income

$27,000 Monthly Income

$324,000 / Year potential

Referring Agent CompensationReferring Agent Compensation

$14,400 Mortgage Income $4200 Financial Services Income$18,600 Monthly Income

$223,000 / Year potential

$ 500 per month

x12

$ 6,000

x70%

$4,200: x 3 Clients

25/75 Split with advisor

Initiate and introduce

Advisor manages the relationship/process

$1050 per client (example)

The Agent WebsiteThe Agent Website

Login = Charter1

Password = Riskmanagement1

Take the Next StepTake the Next Step

A tremendous need in marketplace exists for solid financial advice

Excellent earning potential as an Advisor or Manager.

Opportunity to help others while helping yourself and your family

Creates more loan originations

Four major reasons to expand into Financial Services…

Producing/Sr. Agent Producing/Sr. Agent CompensationCompensation

$ 500 per month

X12

$ 6,000

x70%

$4,200: x 3 Clients

$14,400 Mortgage Income $12,600 Financial Services Income

$27,000 Monthly Income

$324,000 / Year potential

CompensationCompensation

We are looking for Leaders/Agency Builders

As a Managing Advisor you supervise 10 Advisors

$15,000 Businessx 10 Advisors$150,000 Totalx Management Override$21,000 Monthly Income Potential

$252,000 annual potential

Plus renewal commissions

Plus IRA/401k Rollover and annuities business

Additional path to grow profession

Additional service to provide more complete package

Rise above the crowd

Consumers Need HelpConsumers Need Help

Most of America is under-insured!

Average death benefit in 2000 per LIMRA report was less than $12,000

UNEXPECTED LOSSUNEXPECTED LOSS

The The ProblemProblem

If we could show you a way to free up $700 to $1,000 from your family expenses, without changing your Lifestyle…

Would you save for your future?