Important Disclosures

Developing Your Asset Allocation Model

Financial Guard’s approach to building asset allocation models is based primarily on the principles of Modern Portfolio Theory. Fundamentally, each asset allocation model consists of 4 main asset categories with 12 distinct asset classes. Financial Guard will use the responses provided by the client to match them to the most appropriate asset allocation model. In an effort to use diversification to minimize portfolio risk, with respect to each asset allocation model, Financial Guard attempts to identify an appropriate ratio of equity, fixed income, alternatives and cash suitable to a client’s investment objectives and risk tolerance. Based on a client’s circumstances, Financial Guard will match each client to the most appropriate Financial Guard asset allocation model giving the client a portfolio that is consistent with his/her age, time horizon and risk tolerance in accordance with information provided by the client. While Financial Guard has the ultimate responsibility for developing all asset allocation models, QS Investors, LLC, an affiliate of Financial Guard (“QS”), provides non-discretionary asset allocation recommendations that are considered by Financial Guard as an input in developing the asset allocation models. Please bear in mind that diversification across asset classes does not guarantee a profit or protect against loss.

Recommended Portfolio

Once the algorithm has matched a client to one of the Financial Guard’s asset allocation models, the system will recommend funds to implement such asset allocation model with the best funds available to that particular client based on the results of Financial Guard’s proprietary algorithm and “Best of Class” fund review process. Financial Guard maintains a list of “Best of Class” funds tied to each of the 12 distinct asset allocation categories for the asset allocation models maintained by Financial Guard. The selection of funds for Best of Class designation is done by the Financial Guard Investment Committee and is based on several criteria, including without limitation short and long-term performance, fund manager tenure, expense ratios and fees, Sharpe Ratio, and style purity. The Best of Class funds are reviewed and updated quarterly and are subject to change.

Custodian Best of Class Funds

Financial Guard has developed Best of Class fund line-ups that are tailored to the recordkeeping platforms of the custodian(s) Financial Guard has operational connectivity to and will only provide discretionary advice to clients at these custodian(s).

Funds Managed by Legg Mason and Franklin Templeton

Financial Guard is a subsidiary of Franklin Resources, Inc. (“Franklin Resources”) and, as such, is an affiliate of Franklin Resources and all of its affiliated asset managers. Due this affiliation, no fund that is managed by a Franklin Resources affiliated manager currently is included in Financial Guard’s Best of Class analysis or recommended as a Best of Class fund, including without limitation any Legg Mason or Franklin Templeton mutual funds.

Frequency of Advice

Once Financial Guard has implemented the recommended portfolio, Financial Guard will not provide a new analysis of your portfolio or update its recommendations for 90 days, subject to some limited exceptions (such as, for example, a change in your profile information).

Tax Considerations

The recommendations provided by Financial Guard do not take into account any tax considerations or implications related to the implementation of the recommended portfolios. Clients should consult with their professional tax advisors regarding the tax considerations and implications of Financial Guard’s implementation.

Reliance on Client Information

The recommendations provided by Financial Guard are subject to and depend upon the accuracy of the information provided by our clients. Financial Guard cannot be held liable for recommendations made based on inaccurate, erroneous, misleading or incomplete information.