In its fifth Excellence in Distribution report, kasina dives into Hybrid Wholesaling, how firms are using it - including benchmarking data, a prognosis for its future, and presents three models for how firms should be using it optimally.

1. Excellence in Distribution: Hybrid Wholesaling April, 2010

2. Benchmarking Reports from kasina Costs of Compensation: Sales and National Accounts – August, 2009 Excellence in Distribution: External Wholesaling – December, 2009 Excellence in Distribution: Internal Wholesaling – January, 2010 Excellence in Distribution: National Accounts – February, 2010 Excellence in Distribution: Hybrid Wholesaling – April, 2010 Entire series to be repeated annually 2

3. Excellence in Distribution: Hybrid Wholesaling Why Use Hybrids? Hybrids can add scale while managing costs Hybrids can pursue underserved markets 47% of advisors prefer phone or e-mail communication over personal visits Firms gain options in alternative career paths and work-life balance 3

4. Excellence in Distribution: Hybrid Wholesaling Majority of Firms Has Hybrid Wholesalers kasina introduced concept 10 years ago Franklin Templeton among first to introduce hybrids Average tenure of hybrid implementation at firms is 4 years 43% of those without Hybrids are looking to add them 4

5. Excellence in Distribution: Hybrid Wholesaling Three Recommended Models for Hybrids The Opportunistic Model Hybrids plug temporary gaps or address new opportunities: vacant external position, retention of assets, or a new geography The Spinoff Model Team of hybrid wholesalers pursues a new channel or product (RIA, DCIO) The Team Model Manage a territory which segments advisors by profitability level and service preference 5

6. Excellence in Distribution: Hybrid Wholesaling 46% of Firms Source Hybrids Only from Sales Desk Must know how to sell over the phone and able to form in-person connections Leverage technology to sell and service Be willing to travel Career choice or stepping stone? Hybrids are entrepreneurs – wide array of skills needed 6

7. Excellence in Distribution: Hybrid Wholesaling Firms Have 5 x Externals as Hybrids Increase number depending on model For Team Model, consider balancing ratio with more hybrids and internals to manage costs, increase reach, add flexibility 7

8. Excellence in Distribution: Hybrid Wholesaling Territories Are Not Focused or Manageable 8

9. Excellence in Distribution: Hybrid Wholesaling 43% Miss Opportunity to Incent Beyond Sales Results Structure compensation to fit opportunity Greater selling opportunity = greater variable component Modest selling opportunity = smaller variable component Tie bonus to profitable activities Asset retention Teamwork Substantive meetings 9

10. Excellence in Distribution: Hybrid Wholesaling Hybrids Increase Scale, Flexibility, Cost Management Use hybrids to increase scale and manage costs Meet shorter- and longer-term goals for addressing new sales & servicing opportunities Choose hybrid models to target opportunities in underserved markets Flexible territory design and management Identify, train and mentor technology-savvy salespeople Based on ability to sell and service in a technology-driven environment Evaluate and compensate hybrids in alignment with firm goals Adjust variable component to match sales opportunity Integrate hybrid wholesaling in firm’s overall distribution strategy Transition to new models when appropriate 10

12. Coordination and alignment with external and internal wholesaling

13. Focus firm identification and territory planning

14. Metrics and compensation

15. Excellence in Distribution series, benchmarking data, research and recommendations on Compensation, External, Internal and Hybrid Wholesaling and National Accounts.

16. What Advisors Do Online

17. FA Vision service with in-depth, strategic data on advisor preferences