1.  Presented by:
 Cora Pettipas, FCSI
 VP, NEMA
 John Liston
 VP, Business Development
 Raintree Financial Solutions
PRIVATE INVESTING 101:
USING REAL ASSETS AS A POWERFUL DIVERSIFYING TOOL FOR YOUR CLIENTS
presented by:
CRAIG SKAUGE, NATIONAL EXEMPT MARKET ASSOCIATION
&
DR. MARIA LIZAK, NATIONAL BEST & PINNACLE WEALTH BROKERS
Alternative Reality
The Expanding Retail Exempt Market in Canada
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2. The Exempt Market is where private investments
are funded. The word “Exempt” refers to being
exempt from a prospectus (but not from regulation).
This market, in its modern form, has evolved
significantly since the introduction of NI 31-103.
WHAT IS THE EXEMPT MARKET?
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3. OPERATING A DUAL LICENSE BUSINESS
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4. WHY SHOULD INSURANCE ADVISORS CARE?
Solutions for your clients
• Yield
• Diversification from public markets
• Shield from volatility
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5. WHY SHOULD INSURANCE ADVISORS CARE?
Client Retention
• No Fences
Keep up with the times
• Canada Pension Plan
Succession Planning
• Expand your practice – new solutions
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6. • $264.6 Billion = AUM
• 18.3% - 1 year
• 8.0% - 10 year average
Fiscal Year March 31, 2015
How does the CPPIB
Invest Our Assets?
Source: http://www.cppib.com/en/our-performance/financial-results.html
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7. DIVERSIFICATION - CPPIB
Private
52.3
Public
47.7%
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Source: http://www.cppib.com/en/our-performance/financial-results.html

8. DIVERSIFICATION - CPPIB
2.6
5.2
6.1
10.6
11.6
16.2
47.7
Other 2.6%
Debt 5.2%
Infrastructure 6.1%
Private bonds 10.6%
Real Estate 11.6
Foreign Private
Equities 16.2%
Public 47.7%
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Source: http://www.cppib.com/en/our-performance/financial-results.html

9. WHY I BECAME DUAL LICENSED
For my clients
• Public market volatility
Area of Specialty
• Attract referrals from insurance
advisors in my network
Grow my business revenue
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10. BUSINESS REVENUE
20%
Insurance
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11. BUSINESS REVENUE
20%
42%
Insurance
Exempt
Market
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12. BUSINESS REVENUE
20%
42%
38%
Insurance
Exempt Market
Agency
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13. WHY DO PEOPLE INVEST IN THE
EXEMPT MARKET?
• Lower volatility/correlation to the markets
• IncreasedYield
• Choice where your money is invested
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14. • Low correlation with public markets
• Interesting and innovative
• Potential for upfront commission, trailers and
profit sharing
WHY ARE ADVISORS ATTRACTED TO THIS
MARKET?
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15. FOLLOW THE PROCESS
• 64 year old
• Single, 3 daughters
• Receiving $20,000 from Pensions
• Needs her investments to provide additional
$30,000 income
• $473,000 Investible Assets
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KYC + KYP =
CLIENT SUITABILITY

16. FOLLOW THE PROCESS
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 Cash Flow & Income Needs
in Retirement
 Investible Assets / Net
Worth
 Investment Objectives
 Time Horizon
 Need for Liquidity
 Risk Tolerance &
Understanding
 Ability to Sustain a Loss
 Projected Cash Flow,
Targeted Return
 Income, Growth,Tax
Advantages
 Public vs. Private
 Asset Class
 Geographic Region
 Provisions for Liquidity
 Time Horizon

17. CASE STUDY #1: SENIOR
• Divorced 64 year old female
• Receiving $20,000 from Pensions
• Investment Objective: Income & Growth
• Needs her investments to provide additional
$30,000 income
• $473,000 Investible Assets
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18. CASE STUDY #1: SENIOR
• Knowledge:Average
• Time Horizon:
• 25% 1-5 years
• 25% 5-10 years
• 25% 10-15 years
• 25% 15 + years
• Investment Objective: Income & Growth
• RiskTolerance: Medium-High M

19. Guaranteed Retirement Income (Public Market)
$473,000 @ 4.53% = $21,426 /yr*
*IA For Life Series – Sept 2016 GMWB –
Guaranteed
Retirement Income
100%
CASE STUDY #1: SENIOR
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20. CASE STUDY #1: SENIOR
Mixture of Public Market
(GMWB) AND Private Market
Investments = $33,791 / year
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Public
Market
32%
Private
Market
58%
Cash
10%

21. CASE STUDY #1: SENIOR
Investment Mix:
12 Different
Issuers
Cash
9% 7%
4%
4%
GMWB –
Guaranteed
Retirement
Income
31%
9%
2%
3%
9%
4%
…
5%
4%
5%
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22. CASE STUDY #1: SENIOR
Bonds
4%
Cash
9%
Commercial Real
Estate -
Construction
5%
Commercial Real
Estate - REIT
5%
Commodities
4%
Factoring
12%
Leasing
9%
Lending &
Factoring
9%
Private
Equities
11%
Public Equities
31%
Residential Real
Estate Rental
2%
Asset
Allocation
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23. • 40 year old Dentist, 15 year practice
• Op Co earning $650,000 / year
• $600,000 in Hold Co
• Liquid Assets $2,000,000
• Net worth with real estate $3,000,000
• Wants to retire in 20 years
CASE STUDY #2: PROFESSIONAL CORP
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24. • Investment objectives:
Ability to access funds for new equipment / expansion
Diversification
Security
Tax Efficiency
Estate Planning
CASE STUDY #2: PROFESSIONAL CORP
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25. • Knowledge:Average
• Time Horizon: 15+ years
• Risk Tolerance: Medium-High
CASE STUDY #2: PROFESSIONAL CORP
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26. • Investment objectives:
Ability to access funds for new equipment / expansion
Diversification
Security
Tax Efficiency
Estate Planning
CASE STUDY #2: PROFESSIONAL CORP
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27. CASE STUDY #2: PROFESSIONAL CORP
 Whole life policy for dentist: $25,000 / year
• Ability to access
funds
• Security
• Tax Efficiency
• Estate Planning
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Whole life policy for dentist: $240,000 / year

28. CASE STUDY #2: PROFESSIONAL CORP
 Whole life policy for dentist: $25,000 / year
• Estate Planning
• Tax Efficiencies
• Creditor Protection
• Access to cash value
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2 Whole Life policies for sons: $25,000 / year

29. CASE STUDY #2: PROFESSIONAL CORP
Cash
5% 5%
Mutual Funds
71%
5%
5%
5%
5%
Exempt Market: $500,000 with 5 different
companies offering targeted cash flows of 8-12%
per year
• Diversification
• Potential Tax Efficiency
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30. Examples
• Yield Products
Factoring, Leasing, Buying Small Businesses
• Real Estate
Apartment Funds, Development, Hotels, Land Banking
• Growth
WHO RAISES MONEY IN THE EXEMPT
MARKET?
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31. • The Offering Memorandum (OM) exemption is currently used
in every province
• It is considered the ‘retail exemption’, allowing non-accredited
investors to invest based on receiving disclosure
• OM exemption became law in Ontario in January of this year
• 3Variations of the model
THE ‘OM’ EXEMPTION
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32. C

33. C

34. C

35. • A complimentary product for public stocks and bonds
• Low yield environment pushing investors to find alternatives
for their fixed income portion
• (Some) backed by real assets
• Investors can take part in innovation and new business
concepts
WHY ARE INVESTORS ATTRACTED TO THIS
MARKET?
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36. Become Registered as a Dealing Representative
• IFSE Course
• Canadian Securities Course
Partner with a REPUTABLE licensed Dealing Representative
HOW DO INSURANCE ADVISORS GET
INVOLVED IN THE EXEMPT MARKET?
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37. C

38.  QUESTIONS?
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