Presenter's Name

Presenter’s Title

There is no guarantee that the strategies set forth in this presentation will achieve their intended objectives. LWI Financial Inc. (“Loring Ward”) is an investment adviser registered with the Securities and Exchange Commission. Securities transactions are offered through its affiliate, Loring Ward Securities Inc., member FINRA/SIPC. IRN B 15-032 (Exp 4/17)

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A Portfolio To Meet Your Life Goals

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Financial Life Map

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Your Portfolio Using Scientific & Academic Research

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“Straw” Portfolio

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“Wood” Portfolio

12 Diversification neither assures a profit nor guarantees against loss in a declining market.

“Brick” Portfolio

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Adam Smith

Frederich Hayek Paul Samuelson Merton Miller

Bill Sharpe Harry Markowitz Gene Fama

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How You Allocate Between Stocks & Short-Term Bonds

How You Allocate Between U.S. & International Stocks

Your Comfort with Key

Risk Factors

Decisions

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Source: One-Month U.S. Treasury Bills, Five-Year U.S. Treasury Notes, and Twenty-Year (Long-Term) U.S. Government Bonds provided by Ibbotson Associates. Six-Month U.S. Treasury Bills provided by CRSP (1964-1977) and Merrill Lynch (1978-present). One-Year U.S. Treasury Notes provided by the Center for Research in Security Prices (1964-May 1991) and Merrill Lynch (June 1991-present). Morningstar data ©2014 Stocks, Bonds, Bills, and Inflation Yearbook (2015), Morningstar. The Merrill Lynch Indices are used with permission; copyright 2014 Merrill Lynch, Pierce, Fenner & Smith Incorporated; all rights reserved. Assumes reinvestment of dividends. Past performance is not indicative of future results. All investments involve risk. Standard deviation annualized from quarterly data. Standard deviation is a statistical measurement of how far the return of a security (or index) moves above or below its average value. The greater the standard deviation, the riskier an investment is considered to be. Bonds are subject to market and interest rate risk. Bond values will decline as interest rates rise, issuer’s creditworthiness declines, and are subject to availability and changes in price.

Growth of $1 Jan 1927 – Dec 2014

How You Allocate Between Stocks & Short-Term Bonds

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How You Allocate Between Stocks & Short-Term Bonds1

Source: One-Month U.S. Treasury Bills, Five-Year U.S. Treasury Notes, and Twenty-Year (Long-Term) U.S. Government Bonds provided by Ibbotson Associates. Six-Month U.S. Treasury Bills provided by CRSP (1964-1977) and Merrill Lynch (1978-present). One-Year U.S. Treasury Notes provided by the Center for Research in Security Prices (1964-May 1991) and Merrill Lynch (June 1991-present). Morningstar data ©2014 Stocks, Bonds, Bills, and Inflation Yearbook (2015), Morningstar. The Merrill Lynch Indices are used with permission; copyright 2014 Merrill Lynch, Pierce, Fenner & Smith Incorporated; all rights reserved. Assumes reinvestment of dividends. Past performance is not indicative of future results. All investments involve risk. Standard deviation annualized from quarterly data. Standard deviation is a statistical measurement of how far the return of a security (or index) moves above or below its average value. The greater the standard deviation, the riskier an investment is considered to be. Bonds are subject to market and interest rate risk. Bond values will decline as interest rates rise, issuer’s creditworthiness declines, and are subject to availability and changes in price.

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2 How You Allocate Between U.S. & International Stocks

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World Market CapitalizationPercent of world market capitalization as of December 31, 2014

Source: Dimensional Fund Advsors. In US dollars. Market cap data is free-float adjusted from Bloomberg securities data. Many small nations not displayed. Totals may not equal 100% due to rounding. Past Performance is not indicative of future results. All investments involve risk. Foreign securities involve additional risks including foreign currency changes, taxes and different accounting and financial reporting methods. Countries represented by their respective MSCI IMI(net div.). Indexes are unmanaged baskets of securities in which investors cannot directly invest; they do not reflect the payment of advisory fees or other expenses associated with specific investments or the management of an actual portfolio.

Capitalization over time

($ trillions) Developed Markets Emerging Markets Frontier Markets

Bloomberg Index Affiliation

How You Allocate Between U.S. & International Stocks2

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How You Allocate Between U.S. & International Stocks

Source: Dimensional. In US dollars. Market cap data is free-float adjusted from Bloomberg securities data. Many small nations not displayed. Totals may not equal 100% due to rounding. Past Performance is not indicative of future results. All investments involve risk. Foreign securities involve additional risks including foreign currency changes, taxes and different accounting and financial reporting methods. Countries represented by their respective MSCI IMI(net div.). Indexes are unmanaged baskets of securities in which investors cannot directly invest; they do not reflect the payment of advisory fees or other expenses associated with specific investments or the management of an actual portfolio.

Ranking of Markets Around the World Based on Ten-Year Performance in US DollarsAnnualized Returns Year Ending December 31, 2014

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How You Allocate Between U.S. & International Stocks2

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The risks associated with investing in stocks and overweighting small company and value stocks potentially include increased volatility (up and down movement in the value of your assets) and loss of principal.

Your Comfort with Key Risk Factors

SmallCompany

Stocks

GrowthCompany

Stocks

ValueCompany

Stocks

LargeCompany

Stocks

Total Stock Market

Increased Expected Returns

Decreased Risk and

Expected Returns

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Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. US value and growth index data (ex utilities) provided by Fama/French. The S&P data are provided by Standard & Poor’s Index Services Group. CRSP data provided by the Center for Research in Security Prices, University of Chicago. International Value and Growth data provided by Fama/French from Bloomberg and MSCI securities data. International Small data compiled by Dimensional from Bloomberg, StyleResearch, London Business School, and Nomura Securities data. MSCI EAFE Index is net of foreign withholding taxes on dividends; copyright MSCI 2015, all rights reserved. Emerging markets index data simulated by Fama/French from countries in the IFC Investable Universe; simulations are free-float weighted both within each country and across all countries.

Values change frequently and past performance may not be repeated. There is always the risk that an investor may lose money. Small company risk: Securities of small firms are often less liquid than those of large companies. As a result, small company stocks may fluctuate relatively more in price. Emerging markets risk: Numerous emerging countries have experienced serious, and potentially continuing, economic and political problems. Stock markets in many emerging countries are relatively small, expensive, and risky. Foreigners are often limited in their ability to invest in, and withdraw assets from, these markets. Additional restrictions may be imposed under other conditions. Foreign securities and currencies risk: Foreign securities prices may decline or fluctuate because of: (a) economic or political actions of foreign governments, and/or (b) less regulated or liquid securities markets. Investors holding these securities are also exposed to foreign currency risk (the possibility that foreign currency will fluctuate in value against the US dollar).

Fixed income investments are subject to interest rate and credit risk.

Your Comfort with Key Risk Factors3

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The Key Academic Research

• Defining Value and Growth: Implications for Returns and TurnoverJim Davis and Inmoo Lee, Dimensional Fund Advisors (August 2008)

• The Anatomy of Value and Growth StocksFama, Eugene F., University of Chicago – Graduate School of Business and Kenneth R. French, Dartmouth College – Tuck School of Business; National Bureau of Economic Research (September 2007)

• MigrationFama, Eugene and Kenneth R. French, Financial Analysts Journal (June 2007) Dissecting AnomaliesFama, Eugene F., University of Chicago – Graduate School of Business and Kenneth R. French, Dartmouth College – Tuck School of Business; National Bureau of Economic Research (June 2007)

• Average Returns, B/M, and Share IssuesFama, Eugene F., University of Chicago – Graduate School of Business and Kenneth R. French, Dartmouth College - Tuck School of Business; (May 2007)International Evidence of the Size EffectRizova, Savina, Dimensional Fund Advisors (August 2006)

• Multi-Factor InvestingFama Jr., Eugene F., Dimensional Fund Advisors (July 2006)

• The Value Premium and the CAPMFama, Eugene F., University of Chicago – Graduate School of Business and Kenneth R. French, Dartmouth College - Tuck School of Business; National Bureau of Economic Research (March 2005)

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• The Capital Asset Pricing Model: Theory and EvidenceFama, Eugene F., University of Chicago – Graduate School of Business and Kenneth R. French, Dartmouth College - Tuck School of Business; National Bureau of Economic Research (August 2003)

• The Corporate Cost of Capital and the Return on Corporate InvestmentFama, Eugene F., University of Chicago – Graduate School of Business and Kenneth R. French, Dartmouth College – Tuck School of Business; (April 1998)

• Value Versus Growth: The International EvidenceFama, Eugene F., University of Chicago – Graduate School of Business and Kenneth R. French, Dartmouth College – Tuck School of Business; National Bureau of Economic Research (August 1997)

• Cross Section of Expected Stock ReturnsFama, Eugene and Kenneth R. French, Journal of Finance 47 (1992)

• Luck Versus Skill in the Cross Section of Mutual Fund ReturnsFama, Eugene F. and French, Kenneth R., (December 14, 2009 )

• Mutual Fund Performance Fama, Eugene F. and French, Kenneth R.; National Bureau of Economic Research (June 30, 2008)

• The Cost of Active InvestingFrench, Kenneth R. (March 13, 2008)

• False Discoveries in Mutual Fund Performance:  Measuring Luck in Estimated AlphasL. Barras, O. Scaillet, and R. Wermers (July 2006)

The Key Academic Research

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• The Informational Efficiency of Stock PricesDavis, James L., Dimensional Fund Advisors (April 2006)

• Market Efficiency:  A Theoretical Distinction and So What?Markowitz, Harry M., Financial Analysts Journal (2005)

• The Efficient Market Hypothesis and Its CriticsMalkiel, Burton G. Princeton University, CEPS Working Paper No. 91 (April 2003)

• Passive Investment Strategies and Efficient MarketsMalkiel, Burton G. Princeton University, Princeton University - Bendheim Center for Finance; National Bureau of Economic Research (2003)

• Mutual Fund Performance and Manager Style Davis, James L., Dimensional Fund Advisors Financial Analysts Journal (January / February 2001 )

• Market Efficiency, Long-term Returns, and Behavioral FinanceFama, Eugene F., University of Chicago Graduate School of Business (February 1997)

• Asset Management: Active vs. Passive ManagementSinquefield, Rex A., Dimensional Fund Advisors (October 1995)

• The Performance of Mutual Funds in the Period 1945-1964 Jensen, Michael, The Journal of Finance (May 1968 )

• Efficient Markets Hypothesis Fama, Eugene F. ,University of Chicago (1965)• Behavior of Securities Prices — 1965 Samuelson, Paul , MIT (1965)• The Statistical Properties of Internationally Diversified Portfolios

Davis, James L., Dimensional Fund Advisors (September 2004)

The Key Academic Research

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• What Measures the Benefits of DiversificationStatman, Meir, Santa Clara University - Department of Finance and Jonathan Scheid, Loring Ward Advisor Services (May 2005) How Much Diversification is EnoughStatman, Meir Santa Clara University - Department of Finance (October 2002)

• Have Individual Stocks Become More Volatile? An Empirical Exploration of Idiosyncratic Risk?Campbell, John Y., Martin Lettau, Burton G. Malkiel and Yexiao Xu, Harvard University - Department of Economics , New York University - Department of Finance , Princeton University - Bendheim Center for Finance and University of Texas at Dallas - Department of Finance & Managerial Economics (March 2000)

• The Statistical Properties of Internationally Diversified PortfoliosDavis, James L., Dimensional Fund Advisors (September 2004)Several recent studies have cast doubt on the diversification benefits of

• The Capital Asset Pricing Model: Theory and EvidenceFama, Eugene F., University of Chicago – Graduate School of Business and Kenneth R. French, Dartmouth College - Tuck School of Business; National Bureau of Economic Research (August 2003)

• What Measures the Benefits of DiversificationStatman, Meir, Santa Clara University - Department of Finance and Jonathan Scheid, Loring Ward Advisor Services (May 2005)

• How Much Diversification is Enough Statman, Meir Santa Clara University - Department of Finance (October 2002)

• Diversification and Portfolio Risk Harry Markowitz, University of Chicago (1962)

The Key Academic Research

Your Portfolio with a Disciplined & Structured Approach

28 The buying and selling of securities for the purpose of rebalancing may have adverse tax consequences.

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Data source: Morningstar Direct 2015. Past performance is no indication of future results. All investments involve risk, including loss of principal. Stocks are represented by the S&P 500 Index. Bonds are represented by the SBBI Long-Term Bond Index. Indexes are unmanaged baskets of securities in which investors cannot invest and do not reflect the payment of advisory fees associated with a mutual fund or separate account. Returns assume dividend and capital gain reinvestment. Rebalancing does not guarantee a return or protect against a loss. The buying and selling of securities for the purpose of rebalancing may have adverse tax consequences.

Rebalancing and a 50% Stocks/50% Bonds Portfolio 1995 – 2014

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Average Investor vs. Major Indices 1995 – 2014

Average stock investor and average bond investor performances were used from a DALBAR study, Quantitative Analysis of Investor Behavior (QAIB), 03/2015. QAIB calculates investor returns as the change in assets after excluding sales, redemptions, and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs. After calculating investor returns in dollar terms (above), two percentages are calculated: Total investor return rate for the period and annualized investor return rate. Total return rate is determined by calculating the investor return dollars as a percentage of the net of the sales, redemptions, and exchanges for the period. The fact that buy-and-hold has been a successful strategy in the past does not guarantee that it will continue to be successful in the future. S&P 500 returns do not take into consideration any fees.

Stock Behavior Gap = 4.66% Bond Behavior Gap = 5.4%

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Do those ‘Winning’ Managers Persist?

U.S. Equity Mutual Funds Maintaining Top Quartile Performance

Represented by managers with 12 month trailing outperformance to March of each year.Data source: Standard & Poor’s Does Past Performance Matter? The Persistence Scorecard, June 2014 and www.nytimes.com/2015/04/05/your-money/measure-for-measure-index-funds-rule.html

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1. Design A Plan to Meet Your Life Goals

2. Build Your Plan Using Scientific & Academic Research

3. Protect Your Plan with a Disciplined and Structured Approach

In Summary

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Questions?

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