THE MONEY MANAGEMENT INSTITUTE

1
PFPC Managed Account Services
Money Manager Solutions
Presented by Steve DeAngelis, SVP Managing
Director Rick Erickson, Operations Manager
THE MONEY MANAGEMENT INSTITUTE Technology
Spotlight The Yale Club of New York March 1,
2006
Solutions to stay out front.sm
2
Why PFPC?

• A leading provider of technology processing
  solutions for the global investment industry,
  building on strengths of
• Differentiated proprietary technology
• Consistent high quality service, expertise
• Strong relationships with both distributor and
  manufacturer customers
• Stability of a large organization with over 4700
  employees

PNC Financial Services Group
PNC Advisors, PNC Investments, Hilliard
LyonsDistribution
BlackRock Asset Management
PFPC Technology, Processing and Business
Solutions
PNC Bank Regional Community and Wholesale Banking
3
PFPC Industry Leadership
PFPC
Service
Statistics

• Transfer Agency Servicing
• Subaccounting
• Marketing and Distribution Services
• Fund Accounting/Administration
• Custody/Securities Lending
• Print Mail
• Blue Sky
• Banking Transaction Services
• Alternative Investment Services
• Managed Account Services
• Offshore Services

19 mm accounts 43 mm accounts 218 bn in
assets 830 bn in assets 476 bn in assets/62 bn
lendable assets 240 mm annual printed images 281
k full-svc./110 k remote permits 2.6 mm chk trans
accts/723 k debit card accts Over 77 bn in
assets 51 bn in assets 182,000 accounts 76 bn
in assets 389 funds 130,000 shareholders 914
share classes
Services offered
Market leader
Not active
Data as of 12/31/05
4
PFPC Managed Account Services
Money Managers

• Mutual Fund Companies
• Institutional Managers
• Niche or Wrap Managers

• Money Manager Solutions

Program Sponsors

• ADVISORport Platform
• Custom Enterprise Solutions
• Product Solutions Mutual Fund Wrap, SMAs, MSAs,
  UMAs

• Regional B/Ds
• Bank B/Ds
• Independent B/Ds
• Trust Companies
• RIAs

5
PFPC Managed Account Services Facts

• 51 Billion in assets serviced including
• 30,000 money manager accounts
• 140 employees dedicated to managed accounts
• Member of the MMI Technology Operations
  Standards Committee
• Combined over 6 decades of managed account
  experience
• Over 50 managed account client firms
• Asset Managers
• Broker-Dealers
• Banks/Trust Companies
• Insurance Companies
• RIAs

6
PFPC Money Manager Solutions

• People
• Staff experts leading the industry in all areas
  of operations, products, technology
• Aggregation of best practices
• Depth of resources
• Technology
• Market leading platforms, integrated with
  proprietary solutions
• Expertise in all investment management and
  distribution segments leveraging next generation
  solutions
• Processes
• Fully integrated best practices with controls and
  compliance oversight
• Conversion expertise
• Custom enterprise and large scale solutions

7
Money Manager Solutions Team
8
Operational Experience With Top Sponsors
Custodians

• A.G. Edwards
• Advisorport
• Alex Brown
• Bank of America
• Bank of New York
• Bank One
• Bear Stearns
• Brinker
• Charles Schwab
• Comerica
• Eaton Vance
• Envestnet
• Fidelity
• Hilliard Lyons
• HSBC
• Janney Montgomery Scott

• Lehman Brothers
• Lockwood
• LPL
• McDonald Investments
• Merrill Lynch
• Morgan Stanley
• Oppenheimer
• Piper Jaffray
• Placemark
• Raymond James
• RBC Dain Rauscher
• Robert Baird
• Smith Barney Institutional
• UBS
• Wachovia
• Wells Fargo

9
Technology - PFPC Money Manager Solutions
Money Manager
Management and operations reporting
Models Trades
Operations Metrics, Account paperwork, Communicati
ons to PFPC
Portfolio Accounting System
Used for Accounting Pricing Performance Account m
anagement administration
Accounting
Account information
PFPC Imaging Workflow
Performance
Account Set Up Maintenance
Custodial Adapters
Quality Control Data Verification
Query Results Account Outliers
Program data
Trading Block Allocations
Transaction File Positions File
Custodian Discrepancies
Reporting Database
Reconciliation Engine
30 Custodians
Identify, sort and prioritize recon items
10
Customized Management ReportingTrack your
business, see the trends
11
Customized Management ReportingTrack your
business, see the trends
12
Process - IMPRESS Imaging and Workflow Control
access to your business documents
13
Process - IMPRESS Workflow Management System
Control access to your business documents
14
Implementation Process / Operations Manual

• Complete operations manual customized for each
  client
• Most detailed aggregation of best practices in
  the industry
• Online web access via MyPFPC.com

Less Detailed
High level general workflow
Level 1
OPERATIONS FLOWS
Level 2
One document for each program
SPONSOR PROCEDURES
More Detailed
Level 3
One document for each procedure
OPERATIONS PROCEDURES
15
Sample Project Plan
16
Neuberger Berman Case Study

• Client Profile
• 22,000 accounts and 10.9 billion in assets
• Top 10 SMA Manager
• 18 Fixed Income Equity Products
• 30 Sponsors
• PFPCs Action Plan
• Reviewed evaluated firm internal operations
• Compiled a list of services required by firm
• Created a solutions plan to implement along with
  responsibility assignments
• Created a customized Project Plan with four phase
  account conversion schedule
• Successfully implementing the conversion

As of 12/2005 FundFire May 19, 2005
17
Neuberger Berman Case Study

• Client Success Summary
• Grew by 10,000 accounts since converting to PFPC
• Reduced cost of technology and operations and
  locked in a strategic cost advantage
• Aligned expense with volume
• Received a customized operation tailored
  specifically for their shop, utilizing industry
  best practices
• Enabled expanded distribution opportunities
  including dual contract and tier 2/tier 3
  distribution relationships
• Can now focus on growing assets while operational
  infrastructure can support volume fluctuations

18
We Are a Proven Managed Account Solution

• Specific in-house expertise includes
• Daily reconciliation
• Fee creation and maintenance
• DTC matching
• Security set up
• Security maintenance
• Data integrity
• Imaging and workflow (multiple systems)
• Account processing
• Ownership of portfolio accounting system
• Trading
• Project Management

• Employees are experienced managed account
  professionals
• Average industry tenure of 6.5 years
• Culled from a variety of top tier firms
• Member of the MMI Technology Operations
  Standards Committee
• Third party consultative approach
• Business capabilities
• Extract data into SQL for flexible reporting
• Perform variety of data validations
• Account conversions
• Fixed income processing (TBA, MBS)
• Trading
• Project Management

19
Service Offered

• Account Opening, Closing Administration
• Review new account paperwork for completeness
• Do suitability review
• Process the account opening
• Provide ongoing account administration such as
  contribution withdrawal processing
• Support ad-hoc client requests, tax trading
  restrictions
• Account Reconciliation
• Reconcile positions to the custodian books and
  records on a daily basis (assuming data feeds are
  available)
• Process review all corporate actions
• Ensure accurate data through security pricing
• Billing Services
• Calculate receivables from sponsors
• Provide management reports
• Generate client invoices when appropriate
• Management Reports
• Provide on demand management reports (e.g., sales
  tracking, 13f, etc.)
• Provide risk monitoring reports such as high
  cash, restriction violation, commonality, etc.

• Performance Calculation Reporting
• Maintain accounts in the appropriate AIMR
  composite
• Review composites as determined by the money
  manager research outliers
• Trading Access Support
• Provide access to post, maintain trade model
  accounts
• Custom trading management technology with tax
  efficient overlay
• Daily review of DTC report follow up with
  custodians on any issues
• Manually post any trades not executed (e.g.,
  fixed income)
• Post maintain trade model accounts for separate
  accounts
• Trade settlement
• Advanced Output Solutions
• Billing fees
• ADV mailings
• Welcome packages

20
PFPC Competitive Strengths
Proven outsourcing provider
Complete Technology Suite
Experienced Employees

• Reconciliation
• Imaging and workflow
• Overlay management
• Billing
• Reporting

• Innovative management team
• Decades of experience from money manager shops
• Member of MMI Standards Committee
• Providing services since 1999

• 182,000 accounts
• 51 billion in assets
• 140 employees
• Scalable platform
• Largest outsourcing provider