P R A D

Example 1 - Generational Capacity: Unhealthy Hiring and Performance

Up to

Over 55

All

Age Bands:

Age 35

36-45

46-55

Validated Producers - #

2

3

5

7

17

Validated Producers - % of total

12%

18%

29%

41% 100%

Controlled Books - $

$401,348 $1,232,021 $3,645,985 $4,721,123 $10,000,477

Controlled Books - % of total

4%

12%

36%

47% 100%

Sales Velocity/New Bus - $

$142,399 $183,442 $278,665 $124,355 $728,861

Sales Velocity/New Bus - % of total

20%

25%

38%

17% 100%

Ownership Held (# SH in each age band)

0

2

6

8

16

Ownership % Held (% of total in each age band)

0%

7%

32%

61% 100%

Leadership - Number in Leadership Roles

0

1

3

5

9

WAPA

53.6

WASA

56.6

Source: Reagan Value Index, bottom 25% WAPA and performance

Our second example was constructed from compiled results of Reagan Value Index firms that are in the quartile with the lowest WAPA and the highest levels of performance. This firm exhibits a very healthy age distribution as a result of a steady and consistent practice of hiring producers over time. Organic growth is closer to 8-9%, with Sales Velocity closer to 15%. The WAPA is a very healthy 45.1 and the WASA is 49.7. With half of its producers under 46 and only 37% of the equity held by those over age 55, this is a firm with great options for the future. It can remain private or sell for a premium value. The amount of hiring needed to maintain momentum will be consistent with past hiring practices. The following is a snapshot of a firm positioned for a very bright future.

Example 2 - Generational Capacity: Healthy Hiring and Performance

Up to

Over 55

All

Age Bands:

Age 35

36-45

46-55

Validated Producers - #

5

4

4

5

18

Validated Producers - % of total

28%

22%

22%

28% 100%

Controlled Books - $

$1,012,314 $2,034,123 $3,145,985 $3,921,123 $10,113,545

Controlled Books - % of total

10%

20%

31%

39% 100%

Sales Velocity/New Bus - $

$325,234 $374,689 $524,312 $289,162 $1,513,397

Sales Velocity/New Bus - % of total

21%

25%

35%

19% 100%

Ownership Held (# SH in each age band)

2

4

7

6

19

Ownership % Held (% of total in each age band)

12%

21%

30%

37% 100%

Leadership - Number in Leadership Roles

2

3

4

4

13

WAPA

45.1

WASA

49.7

Source: Reagan Value Index, top 25% WAPA and performance

14 Producer Recruiting & Development Study