last revised 7/22/15 2 securities and advisory services are offered through cetera advisors llc,- a...

Last Revised 7/22/15 2

• Securities and advisory services are offered through Cetera Advisors LLC,- A Registered Broker/Dealer - Member FINRA/SIPC. Cetera is under separate ownership from any other named entity.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• Past performance does not guarantee future results.• You cannot invest directly in an index.• Investors should consider the investment objectives, risks, charges, and expenses of the portfolios and its underlying

investment options carefully before investing. This, as well as other important information, is contained in the prospectus of each individual investment inside each portfolio and the Investment Policy Statement of Bright Futures. Please read them carefully before investing. For more information, or to request a prospectuses, summary prospectuses or Investment Policy Statement, contact your investment representative.

• Consult your financial professional before making any investment decision.• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future

performance.• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

Please consult your financial advisor for further information. • These are the views of Bright Futures, LLC, and not necessarily those of the named representative or named Broker dealer, and

should not be construed as investment advice. Neither the named representative nor the named Broker dealer gives tax or legal advice.

• Please email keith.condemi@ceteraadvisors.com with any questions. Or mail questions to:

Investment Advisory Committee2376 Monroe AvenueRochester, NY 14618

Phone: 585-231-1595

Disclosures

Last Revised 7/22/15 3

About Our Team

Keith Condemi Jeff Smith Robert Richard CFA, OSJ Branch Manager Financial Advisor OSJ Branch Manager, EA, CRPS

George Kastanis James Fletcher John Fabrizio Registered Rep Registered Admin Asst Financial Consultant

Last Revised 7/22/15 4

What We’ll Cover Today

Why Asset Allocation?

Nothing Else Compares

Benefits of Vigilance

Optimized Portfolios

Our Process

Introduction

Path to better investing

Nothing else Compares

Benefits of Vigilance

Optimized Portfolios

Introduction

Our Process

Last Revised 7/22/15 5

• Asset allocation is an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investor's risk tolerance, goals and investment time frame.

Asset Allocation

Last Revised 7/22/15 6

Diversification cannot guarantee a profit or protect you from a loss in widely declining markets. Investing involves substantial risk, including loss of principal. No individual should make any investment decisions without first consulting a personal financial professional and conducting his or her own research. This is not a solicitation to buy or sell any securities.

Assets & Diversification

Deposits

Shares

Property

Bonds

UnitTrusts

AnnuitiesShares

Prop

erty

UnitTrusts

Deposits

Bonds

Funds

Last Revised 7/22/15 7http://www.prudentnetwork.com/prudent-perspective/correlation-and-risk-management/

Should I care about Asset Correlation

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 $5,000

$5,500

$6,000

$6,500

UmbrellaSunscreenBoth

Last Revised 7/22/15 8

Practical Example of Asset Allocation

This is not a recommendation or investment advice. Please consult your financial planner before investing.Source: http://www.lifehealthpro.com/2012/06/25/managing-portfolios-and-emotions-in-a-volatile-mar?t=suitability&page=2

Last Revised 7/22/15 9

Mean Optimization

Source: http://www.riskencyclopedia.com/articles/efficient_frontier/

Last Revised 7/22/15 10

Why Asset Allocation?

What We’ll Cover Today

Nothing Else Compares

Benefits of Vigilance

Optimized Portfolios

Introduction

Path to better investing

Our Process

Why Asset Allocation?

Nothing else Compares

Benefits of Vigilance

Optimized Portfolios

Introduction

Why Asset Allocation?

Last Revised 7/22/15 11

If I have seen further it is by standing on the shoulders of giants. – Isaac Newton

On the Shoulders of Giants

Last Revised 7/22/15 12

• Markowitz – 1990 Nobel Memorial Prize in Economic Sciences

• Sharpe – 1990 Nobel Memorial Prize in Economic Sciences

• Benjamin Graham –– Considered Father of Value Investing– Heavy influencer of Warren Buffet

The Giants

Last Revised 7/22/15 13

Ground Up Process

Mean Optimize Asset Classes Empirical Results On Going

Monitoring

• Predictive analytical software

– Forward looking

• Theory = Reality?

• Viability

• Weekly Meetings– Markets

– Investments

– Structure

– Economic Climate

Last Revised 7/22/15 14

More Specifically

• Portfolios use Modern Portfolio Theory accredited to Markowitz and Sharpe

Asset Allocation & Testing Alpha

• Dividend discount model based on Benjamin Graham researchIndividual Securities

• Award winning software to insure complete diversificationMorningstar Analytics

• ETF’s & rebalancing keeps in mind trading costs and tax efficiencyValue Creation

Nitty Gritty

Last Revised 7/22/15 15

What We’ll Cover Today

Why Asset Allocation?

Nothing Else Compares

Benefits of Vigilance

Optimized Portfolios

Introduction

Path to better investing

Our Process

Nothing else Compares

Benefits of Vigilance

Introduction

Why Asset Allocation?

Our Process

Last Revised 7/22/15 16

• Portfolio 1 – Our income portfolio – Designed for the distribution phase of the life cycle– Time Horizon: 1+ year(s)

• Portfolio 3– Conservative Portfolio– Primary objective: principle protection– Time Horizon: 3+ years

Portfolio

* For more detailed information please see Morningstar report with business card

Last Revised 7/22/15 17

• Portfolio 6– Balanced Fund for total return– ETF Model & Individual Securities Model– Time Horizon: 5+ years

• Portfolio 9– Aggressive growth– ETF Model & Individual Securities Model– Time Horizon: 5+ years

Portfolio

* For more detailed information please see Morningstar report with business card

Last Revised 7/22/15 18

What We’ll Cover Today

Why Asset Allocation?

Nothing Else Compares

Benefits of Vigilance

Optimized Portfolios

Introduction

Path to better investing

Our Process

Nothing else Compares

Introduction

Why Asset Allocation?

Our Process

Optimized Portfolios

Last Revised 7/22/15 19

Working With a Financial Planner

19

Last Revised 7/22/15 20

3 Ways Advisors get paid

Commissions Hourly Rate or Plan rate Management Fee

• Finders fee • Unbiased Recommendations

• Pay per use

• Unfamiliar plan

• Unbiased Recommendations

• Alignment

• Agility

• Availability

Last Revised 7/22/15 21

• Alignment of Interests

• Greater Market Agility

• Focus on the Whole Financial Picture

• Greater level of education

Fee Based Advisor

• Increased monitoring

• Fiduciary Responsibility

• Potential Tax Deductibility

• Transparency

• Ability to easily terminate relationship

Last Revised 7/22/15 22

What We’ll Cover Today

Why Asset Allocation?

Nothing Else Compares

Benefits of Vigilance

Optimized Portfolios

Introduction

Path to better investing

Our Process

Introduction

Our Process

Optimized Portfolios

Benefits of Vigilance

Why Asset Allocation?

Last Revised 7/22/15 23

• Low fees

• Weekly meetings

• Committee members outside “Ivy Tower” closer to client goals/needs by also working with clients

• More versatile with asset allocation

• Alignment of interest

• Greater market agility

• Tax Efficient without adding cost

Choosing Bright Futures

Last Revised 7/22/15 24

Questions & Answers