1. Using Market Insights and Sales Data To OptimizeUsing Market Insights and Sales Data To Optimize
Your Distribution StrategyYour Distribution Strategygygy
Dan Cwenar
President and General Manager
Access Data, a Broadridge Company
October 29, 2013

2. TodayToday
• Product Distribution Today• Product Distribution Today
• Industry trends and challenges
• Components of a data-driven solution
• Data Insights
• Case Study 1: Distribution Channel Trends
• Case Study 2: “Alternative Products” Distribution Trends
• Conclusions
2

3. Significant expectation aboutSignificant expectation about datadata
3

4. Our path and perspectiveOur path and perspective
• We provide enterprise data management and business• We provide enterprise data management and business
solutions supporting investment product distribution
• 1997: founded
• 2000: first SalesVision client
• 2009: a Broadridge Company
• Today:
• +125 manufacturers and distributors as clients• +125 manufacturers and distributors as clients
• Data and business solutions covering 90% of all long-term fund assets
and 95% of all ETF assets
4

5. Product distribution is complex andProduct distribution is complex and dynamicdynamic11
Manufacturers distribute products via intermediaries to investors
92.4 million
Investors
290 million accounts,
54 million households
38,160
Sales & Distribution
Professionals
2 million
Professionals,
60,000 Firms
16,380
Products
776 Fund Sponsors,
$14.7 Trillion AUM
Manufacturers distribute products directly to investors
5
1. Data based on 2013 ICI Fact Book and Broadridge proprietary research

6. Industry trends create unique data challengesIndustry trends create unique data challenges
Typical Data Exchange
Intermediary 1
Intermediary 2
Mfg 1
Mfg 2
Typical Data Exchange
Process
y
Intermediary 3
Intermediary 4
Intermediary 5
g
Mfg 3
Mfg 4
Mfg 5
• Omnibus accounting  less transparency
Intermediary 5
Intermediary n
Mfg 5
Mfg n
• New products  create data challenges (e.g., alternatives and ETFs)
• Sales channel dynamics  increased need for better data (e.g., RIA and Banks)
• Regulatory environment  fee scrutiny, held away assets, controls
6
Regulatory environment  fee scrutiny, held away assets, controls
• Lack of data exchange standards  poor data quality and management

7. Components of a solution frameworkComponents of a solution framework
Manage data once  use it across the enterprise
Sales Wholesaler Distributor
22c 2
Grow Revenue Manage Fund Expense
CRM Market
Tax
Manage
Fund Risk
Manage data once  use it across the enterprise
Reporting Compensation Compensation
22c-2
CSO, CMO, COO CFO CCO
Integration Intelligence
Tax
Data Aggregation and Business Rules
Data Enhancement and Research
Asset Positions and Transactions + Context
7
Intermediary 1 Intermediary 2 Intermediary 3 Intermediary n Reference Data

8. DataData artifactsartifacts relatedrelated to distributionto distribution
Manufacturer
(e.g., Dreyfus, Russell,
American Century, SSgA)
Intermediary
(e.g., Morgan Stanley, Schwab,
TD Ameritrade)
InvestorExternal
Wholesaler
Internal
Wholesaler
Territory assignmentsProduct details DBRs Location• Territory assignments
• Channel designations
• LOB definitions
• Sales activities
• Product details
• Compliance rules
• Selling agreement terms
• Sales compensation terms
• Industry data
• DBRs
• FOPs
• Transactions
• Asset positions
• Invoice details
• Location
• Demographics
Intersection of disparate
data sets
Intersection of disparate
data sets
8
[Rep Information] [Product Information] [Retirement Plan
Information]

9. Case Study 1: Distribution Channel Trends
Traditional versus emerging channels

10. Data insights: roadmap for driving growthData insights: roadmap for driving growth
Traditional Distribution Emerging Distribution
Wirehouse
Registered
In estment Ad isors
New
Brokerage Firms
Independent and
Regional B/Ds
Investment Advisors
Bank Channel —
Multi Dimensional
information
for strategic
decision
makingRegional B/Ds making
10

11. Characteristics of traditional channelsCharacteristics of traditional channels
Wirehouse Independent / Regional
Examples Merrill Lynch, Morgan Stanley,
Wells Fargo, UBS
• Self clearing: LPL, Raymond James, RBC,
Edward Jones
• Via clearing platform: Pershing, National
Financial
• Other: Regional B/Ds
AUM ~$5 trillion ~$2.5 trillion
Advisors 57,000 125,000
11
Source: Aite Group Research Report, Tiburon Research and Analysis, June 2013

12. Characteristics of emerging channelsCharacteristics of emerging channels
RIA Bank
Examples Moneta Group, Plante Moran,
GenSpring Family Offices, Hall
• Private Banks: JPM, Mellon Private Wealth
• National Banks: Wells, Bank of America
Capital Partners
,
• Trust Companies: SEI, State Street
AUM ~$2.5 trillion • Private Banks: ~$1.5 trillion
• National Banks: ~$4 trillion• National Banks: ~$4 trillion
• Trust Companies: ~$1 trillion
Firms 15,000 • Private Banks: 24 (881 offices)
N ti l B k 870• National Banks: 870
• Trust Companies: 163
Advisors 55,000 125,000
12
Source: Aite Group Research Report, Tiburon Research and Analysis, June 2013

13. Emerging channels outpacing traditional channelsEmerging channels outpacing traditional channels
ETF Assets by
$512
$581
$634
ETF Distribution
ETF Assets by
Channel:
• Banks have twice the
ETF assets of any
$301
other channel
• RIA channel has
second largest total
of ETF assets
$222
$239
$215
$245 $259 $274$261 $268
$301
• RIA channel leads all
channels with net flows
of $7B into ETFs in
Q2’13 Wirehouse Independent B/D RIA Bank Combined
13
Q2 13 p
ETF AUM Q2 2012 ETF AUM Q4 2012 ETF AUM Q2 2013
Source: Access Data, a Broadridge Company, June 2013

14. Mutual Fund vs. ETF usage by channelMutual Fund vs. ETF usage by channel
Asset market share %
87%
81% 81%
74% 73%
Asset market share %
by channel as of April
2013:
• Stock and Bond Funds
65%
61%
39%
versus ETFs
13%
19% 19%
26% 27%
35%
39%
Indep/Reg'l
BD
RIA Wirehouse Bank Discount Private
Bank
Trust Co.
14
Mutual Funds ETFs
Source: Access Data, a Broadridge Company, June 2013

15. Mutual Fund vs. ETF usageMutual Fund vs. ETF usage –– core US equitycore US equity
Core US Equity:
40%
45%
35%Core US Equity:
• ETF assets as percent
of combined Mutual
Fund and ETF assets
33%
24% 23%
35%
25% 25%
[ ETF / (ETF + Mutual Fund) ] 15% 16%
Private Bank Bank & Trust RIA Wirehouse Indep/Reg'l BD
15
p g
April 2012 April 2013
Source: Simfund Pro, 7.0 / Access Data, a Broadridge Company / Morningstar Categories

16. Mutual Fund vs. ETF usageMutual Fund vs. ETF usage –– Taxable BondTaxable Bond
Taxable Bond:
15%
16%
13%
16%
15%
14%
Taxable Bond:
• ETF assets as percent
of combined Mutual
Fund and ETF assets
12%
10%
12%
10%
[ ETF / (ETF + Mutual Fund) ]
Private Bank Wirehouse Bank & Trust RIA Indep/Reg'l BD
16
p g
April 2012 April 2013
Source: Simfund Pro, 7.0 / Access Data, a Broadridge Company

17. Active management still dominant withActive management still dominant with RIAsRIAs
RIA T t l A t ($B) b F d T M h 2013RIA Total Assets ($B) by Fund Type – March 2013
Active MF vs. Index MF vs. ETF
US Equity Int'l / Global
Equity
Balanced /
Allocation
Alternative Taxable Bond Municipal Bond
17
Equity Allocation
Active Mutual Funds Index Mutual Funds ETF
Source: Simfund Pro, 7.0 / Access Data, a Broadridge Company

18. Case Study 2: Alternative Products Distribution Trends
Select product categories including: Nontraditional Bond, Long Short Equity, Market Neutral

19. Select Liquid Alternative categoriesSelect Liquid Alternative categories
Long/Short
Equity
29%Nontraditional
Bond
Market Neutral
7%
64%
Liquid Alternatives
Category AUM as of 7/31/13 # of Products Percent
Nontraditional Bond $84,901,643,509 166 64%
Long/Short Equity $38,774,922,866 72 29%
Market Neutral $8,702,104,237 125 7%
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Source: Access Data, a Broadridge Company
Select categories: $132 billion AUM

20. AUMAUM rankings: Liquid Alternative Fundsrankings: Liquid Alternative Funds
Rank Management Compan AUMRank Management Company AUM
1 PIMCO $25,444,037,814
2 JPMorgan $20,337,360,281
$3 MainStay $12,214,381,242
4 BlackRock $10,378,879,389
5 Natixis Funds $9,802,630,852
6 Eaton Vance $9,274,324,933
7 Goldman Sachs $6,328,383,507
8 FPA $4,928,305,633
9 AQR Funds $2,890,286,933
10 Calamos $2,868,281,789
20
Source: Access Data, a Broadridge Company / Morningstar Categories
Top 10 manage $104 billion in AUM

21. AUMAUM growth by categorygrowth by category
$70
$50
$60
$70
$40
$50
$Billions
$20
$30
In$
$0
$10
12/31/2012 1/31/2013 2/28/2013 4/30/2013 7/31/2013
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Market Neutral 65% Long/Short Equity 89% Nontraditional Bond 51%
Source: Access Data, a Broadridge Company

22. Channel segmentation of longChannel segmentation of long--short equityshort equity
July 2013 Independent Fastest Growing Segment
Bank
24%
Private
Bank
10%
Trust
6%
Retirement
0%
July 2013
$4.27
$4.0
$4.5 In $ Billions
Independent Fastest Growing Segment
Dual
Registered
18%
Wirehouse
13%
RIA
11% $3.33
$3.21
$2 29
$2.5
$3.0
$3.5
Independent
18%
L t G i S t
$1.76
$2.01
$1 05
$2.29
$1 0
$1.5
$2.0
Largest Growing Segments
January ‘12 – July ‘13
Firm Type Growth
Independent 145% $0.02
$1.05
$0.0
$0.5
$1.0
22
Trust Company 135%
Wirehouse 118%
Source: Access Data, a Broadridge Company

23. Channel segmentation ofChannel segmentation of market neutralmarket neutral
July 2013 Independent Fastest Growing Segment
Bank
Dual
Registered
6%
Private
Bank
5%
Trust
2%
July 2013
$1,194
$1,200
$1,400
Independent Fastest Growing Segment
In $ Millions
Independent
41%
RIA
13%
Bank
11%
$800
$1,000
Wirehouse
22%
$652
$362
$304
$400
$600
L t G i S t $304
$185
$152
$59
$0
$200
Largest Growing Segments
January ‘12 – July ‘13
Firm Type Growth
Independent 178%
23
Source: Access Data, a Broadridge Company
Private Bank 76%
RIA 38%

24. Channel segmentation of nontraditional bondChannel segmentation of nontraditional bond
July 2013 Independent Fastest Growing Segment
Private
Bank
Bank
8%
Dual
Registered
8%
Trust
1%
Retirement
0%
July 2013
$12.97
$12
$14 In $ Billions
Independent Fastest Growing Segment
27%
Wirehouse
20%
RIA
18%
$9.79
$8.82
$8.47$8
$10
20%
Independent
18%
L t G i S t
$3.92
$3 55
$4
$6
Largest Growing Segments
January ‘12 – July ‘13
Firm Type Growth
Independent 80%
$3.55
$0.61
$0.11$0
$2
24
Dual Registered 76%
Trust Company 57%
Source: Access Data, a Broadridge Company

25. ConclusionsConclusions
• Data management program is essential• Data management program is essential
• Data live everywhere
• Data change daily
• New products, new channels, new competitors
• “Data insights” support:
• Territory management
• Competitor analysis (region, product, and channel)
• Compensation plans and management
• Target your investments
• Measure results / modify approach
• New product development (e.g., alternatives, ETFs)
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26. Thank YouThank Youa oua ou