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N O R T H E R N T R U S T
© 2016 Northern Trust Corporation northerntrust.com
Wealth Management Services For Bain & Company
David P. Williams Director of Client Development Wealth Management
Charlie Mueller Wealth Advisory Practice Executive Wealth Management
Katherine Nixon Chief Investment Officer Wealth Management
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Today’s Agenda
NORTHERN TRUST OVERVIEW
WEALTH MANAGEMENT SERVICES
REFERRALS TO LOCAL ADVISORS
EASY WAYS TO GET STARTED
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2
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4 Submit questions to [email protected]
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Client Centric and Highly Focused
Assets Under Custody $6.2 Trillion
Assets Under Management $946.0 Billion
Active Management Passive/Index Management Manager of Managers
Trust Assets Under Management $66.0 Billion
Balance Sheet Assets $120.0 Billion
Loans and Leases $32.9 Billion
Worldwide Operations More than 15,000 employees
A network across 19 states and Washington, D.C.
Serving clients in more than 40 countries
Source: Northern Trust as of June 30, 2015.
Corporations Pension funds Fund managers Foundations Endowments Sovereign wealth funds
Individuals Families Family offices Family foundations & endowments Privately held businesses
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Global Reach and Powerful Resources
Trust & Advisory Professionals 250+
Comprehensive Trust & Estate Services and Wealth Planning
Investment Professionals 230+
Investment Management Solutions
Banking Professionals 150+
Complete Array of Private and Business Banking Services
Full Service in Local Markets*
Best Private Bank in the U.S. (2009-2014)
Arizona Catalina Foothills Phoenix Scottsdale
California Los Angeles – Century City Pasadena Marin County Montecito Newport Beach San Diego San Francisco Santa Barbara Silicon Valley
Colorado Denver
Connecticut Greenwich
Delaware Wilmington
District of Columbia Washington, D.C.
Florida Aventura Boca Raton Bonita Springs Coral Gables
Florida (Cont.) Delray Beach Fort Lauderdale Fort Myers Key Biscayne Lakewood Ranch Miami Naples – Eight Street Naples – Tamiami Trail North Palm Beach Palm Beach Sarasota St. Petersburg Stuart Tampa Vero Beach
Georgia Atlanta
Illinois Barrington Chicago – Main Office Chicago – Oak Street Highland Park Hinsdale Lake Forest Naperville Oakbrook Terrace Wheaton Winnetka
Massachusetts Boston
Michigan Bloomfield Hills Grand Rapids Grosse Pointe Farms
Minnesota Minneapolis
Missouri St. Louis
Nevada Las Vegas
New York New York
Ohio Cleveland
Texas Austin Fort Worth Park Cities River Oaks Saint Ann Court Tanglewood
Washington Seattle
Wisconsin Milwaukee
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Lifecycle of Wealth
Accumulation
Birth of child(ren)
Purchasing 1st house
Marriage
Securing a job
Preservation
Promotion
Starting a nonprofit
Sending kids to college
Purchasing a vacation home
Second career
Distribution
Wealth transfer
Disability
Retirement
Birth of grandkids
Level of Complexity
Leve
l of W
ealth
Providing advice and capabilities as your needs change.
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The Typical Situation: Complex and Lacking Coordination
Oth
er
Ad
vis
ors
Insu
ran
ce A
ge
nt
Accountant
Attorney Estate Planning
Powers of Attorney Wealth Transfer
Private Foundation Partn
ersh
ip Annual Gifting
Inve
stin
g
Risk
Ana
lysis
A
sset
Allo
catio
n
Liquidity Management
Tax Planning Annual Exclusions
Asset Location
Inco
me
Tax
Corporate Tax
Life
Insu
ranc
e Un
ique
Cov
erag
e Pr
oper
ty &
Cas
ualty
Bene
fit A
naly
sis
Bank
ing
Lines
of C
redi
t
Bill
Paym
ent
Cas
h Fl
ow
Fam
ily M
issio
n W
ealth
Edu
catio
n
Retirement Planning
Risk
Man
agem
ent
Liabi
lity
Insu
ranc
e
10b5
-1 P
lans
Cha
ritab
le G
ivin
g C
ash
Man
agem
ent
YOU ?
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Your Holistic Planning Partner
1The Northern Trust Company – Member FDIC – Equal Housing Lender
Wealth Planning
Investment Management
Banking1
Insurance Agent
Attorney Accountant
Your Northern Trust
Team
YOU
Other Advisors
Trust & Estate Services
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Goals Driven Investing Assessment
Get Started with a Fundamental Planning Engagement
Align your investment portfolio to your goals
Plan to achieve financial independence and maintain your desired lifestyle
Evaluate retirement readiness
Analyze cash flow and effective usage of corporate benefits
Integrate wealth transfers, philanthropic gifts and capital asset purchases into your investment plan
Consider tax options and benefits
Connect with Northern Trust Phone: (844) 389-1409 or (312) 444-3660 E-mail: [email protected] Microsite: Northerntrust.com/BCP
Inventory Discuss your financial situation with your team so they can understand your unique goals, risk tolerance, liquidity needs and more. (60-90 minutes)
Analysis We will conduct an in-depth review of your financial situation to develop recommendations that will guide your decision making. (10 business days, once all data has been received)
Recommend Your team will walk you through a real-time Goals Driven Investing assessment. (60-90 minutes)
Engage for Additional Services Based on your preferences, we can work with you in a number of ways:
− Wealth Management: Investment management, wealth planning, trust & estate and banking services. (Ongoing)
− Comprehensive Financial Planning: In-depth planning assessments for complex situations. (Periodic and as needed)
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Asset Value
Percent of Asset Value (Inv. Mgmt)
Percent of Asset Value
(Trustee)
First $2 million 0.75% 0.85%
Next $3 million 0.60% 0.70%
Next $5 million 0.50% 0.60%
Next $15 million 0.35% 0.45%
Next $25 million 0.25% 0.35%
Over $50 million 0.20% 0.30%
Understanding Fees
Complimentary for one year for all partners
Continuing complimentary engagement for all wealth management clients
Otherwise, $6,500 per year (only for partners who are not wealth management clients)
The two main components of fees are Account Management Services and the cost of the Investment Program
Bain & Co. partners will receive a 10% discount on our Account Management Service Fee for investment management or trustee services:
Minimum fee = $4,000
$12,500 per year plus travel expenses for planner
Complimentary for partners investing $25 million or more with Northern Trust
Insurance and risk management Income tax planning Review charitable giving Analysis of corporate
benefits usage Estate planning Stock option planning 10b5-1 stock planning
Partners with more complex situations, may request in-depth financial planning:
Investment management, wealth planning, trust & estate services and banking.
Goals Driven Investing Assessment
Wealth Management*
Comprehensive Financial Planning
In addition to Account Management Services, Northern Trust also provides other services such as Executor/Administrator of an Estate, Guardian, Custodian (both domestic and global), Oil, Gas, and Mineral Interest Advisory Services, Real Estate Advisory Services, Trust Consulting Services, Trustee of Irrevocable Life Insurance Trust, Business Owner Consulting, Family Education and Governance and Philanthropic Advisory Services. Fees associated with these services are outlined separately, and they are available upon request.
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Today’s Agenda
NORTHERN TRUST OVERVIEW
WEALTH MANAGEMENT SERVICES
REFERRALS TO LOCAL ADVISORS
EASY WAYS TO GET STARTED
1
2
3
4
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A Broad Array of Wealth Management Capabilities
Wealth Planning
Investment Management
Trust & Estate Services Banking1
Investment Philosophy and Process
Asset Allocation Investment Capabilities Custom Investment
Strategy Brokerage2
YOU
Deposit and Credit Services
Specialty Lending
Business Solutions
Goals Driven Planning (Complimentary for one year)
Comprehensive Financial Planning
Family Education and Governance
Wealth Transfer and Tax Strategies
Philanthropic Advisory Services
Trusts & Estates
Guardianship
Business Owner Services
Real Estate and Agricultural Services
Oil, Gas and Minerals Management
1The Northern Trust Company – Member FDIC – Equal Housing Lender 2 Securities products and brokerage services are sold by registered representatives of Northern Trust Securities, Inc. (member FINRA, SIPC), a registered investment advisor and a wholly owned subsidiary of Northern Trust Corporation.
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Our Investment Philosophy
Integrity is our cornerstone
Assets serve a purpose
Risk and return are related
Market inefficiencies are difficult to exploit
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Your Life. Your Goals.
Maximizing your cash flow Hedging against market risk Having confidence that you
will fully enjoy your retirement lifestyle
Providing a college education for children or grandchildren
Transferring wealth to the next generation
Educating your family about the responsibilities of wealth
Supporting causes you are passionate about through structured charitable giving
Allocating wealth between charities and beneficiaries
Creating a family charitable giving mission
Purchasing a home or investment property
Funding a major purchase Starting a new business
or investing in a start-up
Funding your lifestyle today and tomorrow
Pursuing your next dream
Investing in your family’s future
Exploring your philanthropic legacy
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Investments: Goals Driven Investing
Do I have enough to achieve my goals? Can I do more?
What assets are needed to achieve my goals? Can I change testamentary gifts to lifetime gifts?
Are assets located properly? Where am I compensated for taking risk? Should I use Active, Passive or Engineered
Investment Solutions?
What do I need to achieve a lifetime of goals?
Aligning your unique goals with your assets and risk preferences to derive a truly custom portfolio helps investors answer two
common questions:
Am I optimally invested to achieve my goals?
ASSET SUFFICIENCY
ASSET EFFICIENCY
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Robust Diversification
Capital Assets
Family Philanthropy
CashInv. Grade BondsMunicipal BondsTIPsHigh Yield BondsUS EquityDev. ex-US EquityEmerging Markets EquityNatural ResourcesReal EstateInfrastructurePrivate EquityHedge Funds
Risk Assets (Market Beta)
Risk Control (Term Beta)
Systematic Risk Premiums (Factors) Conventional Asset Classes
Risk Control and Risk Assets as Portfolio Building Blocks
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Time
Risk Control Assets
Bond Runway
Risk Assets
Fund Nearer-term and Higher Value Goals
Fund Longer-dated Goals (and Excess)
Risk Management: The Bond Runway1
Established to provide increased confidence in helping to meet lifestyle goals for a specified number of years A high quality2, short duration, inflation sensitive fixed income portfolio An investor’s explicit and unique expression of risk tolerance
1 The term Bond Runway is a registered trademark of the Northern Trust and represents the number of years of lifestyle spending a client wants to try to protect and is comprised of a diversified portfolio of cash and high quality fixed income. 2 High quality as defined by the grade given to bonds indicating their credit quality issued by private independent rating services such as Standard & Poor's, Moody's and Fitch. These evaluations of a bond issuer's financial strength, or its the ability to pay a bond's principal and interest in a timely fashion. For example: AAA and AA are often considered high credit-quality investment grade securities.
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Dynamic Glide Path for Each Non Lifestyle Goal
Time Horizon (Years)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Risk Control Assets 100% 100% 78% 64% 53% 44% 37% 31% 25% 20% 16% 11% 8% 4% 0%
Risk Assets 0% 0% 22% 36% 47% 56% 63% 69% 75% 80% 84% 89% 92% 96% 100%
Time
Risk Control Assets
Risk Assets
Fund Nearer-term Goals and Liquidity /
Risk Management Needs
Fund Longer-dated Goals
The Glidepath
A prescribed pathway of dynamic asset allocation, where risk is mapped based on time-varying changes in life-cycle, risk tolerance and the changing relative horizon risk of asset classes due to their mean-reverting properties.
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Drivers of Allocation Character of liabilities
Equities vs. fixed income
Financial vs. real assets
Liquid vs. illiquid
Diversification value
Lifestyle 30%
Excess 15%
Capital Assets
20%
Family 20%
Philanthropy 15%
Capital Allocation 1 2 3
0%
25%
50%
75%
100% Alternatives
Inflation-protected Fixed Income
Fixed Income
Goal Aligned Portfolio Strategies
Equity
Real Assets
41%
6% 12%
17%
24%
Investing Process
Hypothetical Portfolio Allocation
Primary Goals
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Sample Implementation
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Today’s Agenda
NORTHERN TRUST OVERVIEW
WEALTH MANAGEMENT SERVICES
REFERRALS TO LOCAL ADVISORS
EASY WAYS TO GET STARTED
1
2
3
4
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Your Northern Trust
Team
YOU
Referrals to Local Advisors
Please note: Northern Trust receives no referral fees from 3rd party advisors that we recommend.
Attorney | Accountant | Insurance Agent | Other Advisors
Drafting of estate planning and other legal documents
Sale of insurance products
Umbrella liability insurance
Elder care coordination and healthcare advisory
Concierge medicine
Medical claims processing
Art advisory and insurance
Private security
Concierge services
Household services and staffing
Access to structured investment products
Access to IPOs
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Today’s Agenda
NORTHERN TRUST OVERVIEW
WEALTH MANAGEMENT SERVICES
REFERRALS TO LOCAL ADVISORS
EASY WAYS TO GET STARTED
1
2
3
4
23
Connect with Northern Trust
CALL (844) 389-1409 (U.S. Toll Free) (312) 444-3660 (International)
VISIT Northerntrust.com/BCP
EMAIL [email protected]
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Disclosures
LEGAL, INVESTMENT AND TAX NOTICE: This information is not intended to be and should not be treated as legal advice, investment advice or tax advice. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal or tax advice from their own counsel. OTHER IMPORTANT INFORMATION: This presentation is for your private information and is intended for one-on-one use only. The information is intended for illustrative purposes only and should not be relied upon as investment advice or a recommendation to buy or sell any security. Northern Trust and its affiliates may have positions in, and may effect transactions in, the markets, contracts and related investments described herein, which positions and transactions may be in addition to, or different from, those taken in connection with the investments described herein. Opinions expressed are current only as of the date appearing in this material and are subject to change without notice. Past performance is no guarantee of future results. Periods greater than one year are annualized. Performance assumes the reinvestment of dividends and earnings and is shown gross of fees, unless otherwise noted. Returns of the indexes and asset class projections do not reflect the deduction of fees, trading costs or expenses. It is not possible to invest directly in an index. Indexes and trademarks are the property of their respective owners, all rights reserved. A client's actual returns would be reduced by investment management fees and other expenses relating to the management of his or her account. To illustrate the effect of compounding of fees, a $10,000,000 account which earned a 8% annual return and paid an annual fee of 0.75% would grow in value over five years to $14,693,281 before fees, and $14,150,486 million after deduction of fees. For additional information on fees, please consult your Northern Trust Representative. There are risks involved in investing including possible loss of principal. There is no guarantee that the investment objectives or any fund or strategy will be met. Risk controls and asset allocation models do not promise any level of performance or guarantee against loss of principal. All material has been obtained from sources believed to be reliable, but the accuracy, completeness and interpretation cannot be guaranteed. Securities products and brokerage services are sold by registered representatives of Northern Trust Securities, Inc. (member FINRA, SIPC), a wholly owned subsidiary of Northern Trust Corporation. Investments, securities products and brokerage services are:
Not FDIC Insured | No Bank Guarantee | May Lose Value
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The Northern Trust Company – Member FDIC – Equal Housing Lender
