Strategic Asset Management (SAM)

Sector Selection
Asset Allocation
Monitor for Performance

This strategic determination for managing your Financial Assets is what makes SAM the ideal partner for investors seeking broad diversification, modest personal strategies, limited flexibility and lower management fees. This strategic service also requires a two-pronged approach to asset management.

1. Analysis and Sector Determination
2. Asset Allocation for Individual Investment Objectives

Each investor has unique needs and goals. Understanding these issues are foremost in determining the asset mix, the sector selection and the balance to help you achieve your investment expectations.

FIRST WE LISTEN

We conduct a CONFIDENTIAL INTERVIEW to help us completely understand your investor profile. We must understand your priorities, your tolerance for risk, your expectations and your time horizon of employing your financial assets.

PRIMARY ALLOCATION

First, the model is designed to allocate assets based upon your individual profile. This allocation shall determine which broad classes of assets are best suited to reflect your personal goals. These asset classes are:

1. Cash / Cash Equivalents
2. Growth
3. Income

Allocations into these classes are then determined by the current and expected conditions of the economy and financial markets. The sector selection is then based upon these assumptions and your personal profile.

MONITORING YOUR PORTFOLIOS

Your individual SAM account shall be evaluated each day to review how the sectors that are employed in your portfolio are responding to market conditions. Our goal is to be responsive to changes that require action. At the same time, we strive to remain firm in our discipline, and not chase the wide daily fluctuations of the markets. Each account shall also be regularly analyzed to review that the asset class allocation remains consistent with account investment goals.

REPORTING THE DETAILS

You shall receive a daily confirmation for all purchases and security sells. You shall receive a monthly statement that outlines all of the activity in the account, the value of the account and a summary of any additions or withdrawals. Each quarter, you shall receive a QUARTERLY REPORT that provides:

   1.  An Asset Allocation Pie Chart
                      A visual reference of how the assets are employed by industry sectors

   2.  Unrealized Gain and Loss Report
                      Provides a list of Assets Owned, Date of Purchase, Current Market
                      Value, Unrealized Gains or <Loss>, Performance Report for the             
                      Quarter, Year to Date and from Account Inception compared to the 
                      Appropriate indices

   3.  A Summary of All Purchases and Sells That Include: 
                     a.  Date of Sale
                     b.  Initial Cost
                     c.  Amount of Proceeds
                     d.  Realized Gain or <Loss>
                     e.  Tax Implications Long or Short-Term Capital Gain or <Loss>

FEES

Fees are always very important and we know that. We always thoroughly discuss this issue. We believe all parties must be confident that value and fairness are achieved. We especially developed the STRATEGIC ASSET MANAGEMENT (SAM) program for the budget minded. We want to emphasize that although we do reduce cost, we have not done so by reducing the importance of managing your portfolio. Our focus is to help you achieve investment goals that are consistence with your INVESTOR PROFILE.

It is important that you understand our belief that we share a very common interest. The better the account performs, the more we both gain. As fees are based on account values, if the account doubles, so do our fees. The other benefit we expect to receive is HIGH CLIENT SATISFACTION. We do not employ an active marketing effort to obtain new clients; however, we do strive to obtain referrals from your family and friends through this satisfaction. This policy has proven to be effective and successful since 1993. We will do our very best to continue and add to this successful formula.

The fees schedules are determined by the account values and account requirements. These are negotiable and very competitive especially considering the services that are included. We look forward to speaking with you about the BENEFIT OF MCPHERSON STRATEGIC ASSET MANAGEMENT.

Comparative summary of PAM and SAM:

PAM provides for greater flexibility for individual personal account management that can be tailored for personal preferences and micro-managed according to investment objectives.

SAM provides for the daily management of each account with fewer options to micro-manage for stated investment objectives. Consequently, the associated cost is reduced for SAM investment services which are considered when determining management fees.