Annual Report Thomas Point Shoal Light the Most Recognized Lighthouse in Maryland

Cove Point Lighthouse the oldest continuously operating lighthouse on the Chesapeake Bay

2016 annual report Thomas Point Shoal Light The most recognized lighthouse in Maryland

We are pleased to present to you OUR 2016 annual report highlighting successes & challenges, and recapping a remarkable year.

Our 29th year together was an unqualified success, delivering strong results and exceptional growth. For the first time, this success was recognized on a national scale in receiving one of InvestmentNews Magazine’s 12 Best Practice awards.

We made solid progress in 2016 and are proud to report we succeeded in meeting four of the five business goals we set last year. For the first time in six years we added a new Financial Advisor to our growing team, and six of our professionals were presented with the prestigious Five Star Wealth Manager award. Our investment performance excelled in a challenging market, rewarding our clients for their discipline and patience. We completed the successful rollout of our new, improved client portal.

We welcome the 13 new client families who joined us in 2016! We hope you enjoyed your first year with us and look forward to many more. This year, we celebrated six retirements, four marriages, seven graduations, one business sale and the birth of over a dozen children and grandchildren. We also mourned the deaths of nine client family members. Standing beside our clients during times of joy and sadness is among the many reasons we cherish what we do.

We expanded our geographic footprint with the opening of an office in Midtown Manhattan. We have had a strong client base in NY and NJ for many years, and this presence helps us serve them better and continue to grow.

BERMAN MCALEER received added recognition in the national spotlight with one of our partners chairing the Financial Planning Association’s national conference. The meeting attracted more than 2,000 prominent financial advisors to Baltimore, with an estimated $1.6 million of financial impact to the area! As pledged in last year’s annual report, we will continue to actively support our great city.

2 | FIRM UPDATE Our firm began to realize benefits from the formal management structure we implemented in the prior year. Our client retention rate remained higher then the industry average, coming in at 99.5%.

We grew our team and promoted internally to maintain the high level of service and attention our clients expect. Judy Brown joined us early in the year as Senior Financial Advisor with 25 years of industry experience. Susan Mitcheltree became an Equity Partner of the firm, further expanding our management and ownership team. After six years in our investment management department, Brett Holmes, CFP® joined our planning team as our 8th financial advisor.

We welcomed Danielle Fitzpatrick and Mark Lingenfelter to our client service team. Danielle joins Ashley Wilkinson in the Client Service department headed by Terri Cook, as well as working with Dawn O’Farrell in our insurance operations department. Mark is the friendly face greeting clients in our Midtown Manhattan office, delivering the same great first impression that Joyce provides in Baltimore.

It was another great year for BERMAN MCALEER in the media, with our advisors being sought for their input on a wide range of stories in The Washington Post, The Baltimore Sun, TIME Magazine, The Baltimore Business Journal, ABC2 News, and The Wall Street Journal.

After two years on the Baltimore Business Journal’s “Best Places to Work” list, BERMAN MCALEER came in first in our category! The Business Journal also ranked BERMAN MCALEER among the Top Investment Advisory Companies and Top Financial Planning Companies in 2016.

Nationally, we were proud to accept the Ascend Award for “Firm of the Year” from Kestra Financial, one of the country’s largest organizations serving more than 1,400 independent wealth management firms nationwide. We donated the $5,000 award to the National Aquarium’s Urban Wetland Project as part of our drive to support our home city. Most notably, we were honored to receive one of just 12 prestigious InvestmentNews Best Practice Awards. These respected, national industry accolades solidify our team’s dedication to each other and our clients.

Client Retention Rate 99.5% Growth of BMc Assets Under Management Total Client Families 413 over the last 5 years

800 M 2016 New Client Assets $51,520,000

750 M 2016 Total Client Assets $745,194,000 1 700 M

Advisor & Firm Metrics 600 M 650 BMc industry Average* Assets Per Professional $85MM $58MM ASSETS UNDER M ANAGE ENTS Clients Per Staff 22 30 500 M 550 Business Development Expenses $0** $68,000 450 M *Data from InvestmentNews Research 2016 Financial Performance Study 400 M **We are a referral-only practice 2012 2013 2014 2015 2016

1 Represents individual family assets. Retirement plan assets total an additional $591 Million through our 401(k) affiliate, Justin Retirement Services LLC. STATE OF THE FIRM | 3 CONCORD POINT Lighthouse

Strategic decisions in late 2015 and early 2016 proved beneficial to our client portfolios. Thoughtful investment selection and active portfolio management allowed us to capitalize on the market shifts in 2016 to the benefit of our bottom line performance.

Our assets under management rose nearly 10% in 2016 and we finished the year at just under the $750 Million threshold for the first time. Maintaining low ratios of clients per advisor and clients per staff member allow us to continue our ongoing commitment to exceptional financial planning advice and high-touch service.

The economic and political stage proffered no shortage of headline grabbing news in 2016. January provided one of the worst starts to any year with the performance of the S&P 500 down over 9% in the first five weeks of the year. While money fled the market in droves, we were able to profit from the rebalancing opportunity and benefit from others’ lack of discipline.

In June, the Brexit vote led a knee-jerk decline in global markets. As always, we remained calm and focused on the long-term. The U.S. election followed shortly thereafter with another opportunity for investors to miscalculate and react. Both episodes played well into our disciplined approach, and contributed to an exceptional year for our portfolios.

We continue to seek and employ the best investment strategies available leading to a mixture of both passive and active investments within our Our Advisory Team’s Tenure portfolios. Furthermore, we were quite tax efficient in 2016, benefiting from Industry FIRM increased use of passive investments (ETFs and index funds) in the long-term Years Years segment of our portfolios. David Berman 29 29 Joe McAleer 29 29 The industry was divided by the announcement of a new Fiduciary Rule by the Department of Labor that was set to be one of the most impactful Drew Cook 16 16 industry changes in a generation. We welcomed the announcement, Patrick Monaghan 19 15 which would have posed relatively minor changes to a firm like ours that Melanie Hagan 25 10 accepted the fiduciary responsibility years ago to act exclusively in the best interests of our clients. The implementation of the rule has now been Susan Mitcheltree 13 6 stayed by the new administration, and we plan to advocate tirelessly for Brett Holmes 6 6 its reintroduction in a more practicable form. Judy Brown 25 1 “Experience is the difference between knowledge and wisdom.” 4 | INVESTMENTS & ADVISORY sandy point Shoal Light

Our Operations Team’s Tenure Industry FIRM Client Service Years Years Delivering an exceptional client experience is the highest priority at BERMAN ROBIN KARMAN 22 21 MCALEER. This year, we extended our paperless office efforts by offering DAWN O’FARRELL 15 15 e-signatures via mobile devices, in addition to improving the platform that allows TERRI COOK 29 11 for electronic delivery of statements and confirmations. KIM Silvestri 11 8 JOYCE CONNORS 7 7 We significantly improved the remote meeting experience for out-of-state clients. The web-based meeting platform is working so well that even clients from around ASHLEY WILKINSON 7 3 the Baltimore Metro area are using it. More enhancements are planned. DEANNA DOMINGUE 3 3 TYRELL HOWARD-FRANKLIN 3 3 Our next task is to improve the scheduling process, using the latest technology to DANIELLE FITZPATRICK 5 1 help coordinate calendars and make the process more efficient. MARK LINGENFELTER 5 1 Client Portal We significantly enhanced the online client portal that clients use to access their portfolios in 2016. We plan to add more capabilities over time, including the ability wHERE OUR CLIENTS LIVE to aggregate outside accounts and use the portal as a central hub for our financial 68% in Maryland planning work together. 6% in New york / new jersey Security & Technology 6% in Florida We continue to carefully evaluate and implement technical advances in our industry. 4% in Pennsylvania In keeping with evolving best-practice standards, we have been aggressively migrating our data and records to cloud-based platforms with cutting edge security 4% in Virginia features. Our goal is to complete this multi-year process by the middle of this year, 12% in 21 Other States with benefits to both cyber security and access. “Experience is the difference between knowledge and wisdom.” FIRM OPERATIONS | 5 Seven Foot Knoll INSTALLED AT BALTIMORE’S INNER HARBOR AS A MUSEUM EXHIBIT.

FIRM MILESTONES

1988 david and Joe meet at Maryland Financial Group

1995 robin Karman joins firm management

2000 Berman Financial Group established

2002 david and Joe merge to create BERMAN MCALEER

2007 patrick Monaghan becomes an equity partner of the firm

2012 drew Cook becomes an equity partner of the firm

2012 Firm crosses the $500 Million in Assets threshold

2015 Melanie Hagan becomes a partner of the firm

2016 susan Mitcheltree becomes an equity partner of the firm

2016 BERMAN MCALEER opens New York City office

FIRM ACCOLADES

LOCAL Baltimore Business Journal Best Places to Work 2014 (3rd Place) • 2015 (3rd Place) • 2016 (1st Place)

Five Star Wealth Manager Award – 2011 • 2012 • 2013 • 2014 • 2015 • 2016 Hooper Straight Lighthouse Baltimore Business Journal Top Investment Advisory and Financial Planning Lists — 2013 • 2014 • 2015 • 2016

National InvestmentNews Best Practices Award – 2016 kestra Financial Firm of the Year – 2016

6 | FIRM MILESTONES & ACCOLADES BUSINESS INITIATIVES FOR 2017

limit new clients for the year to 16 families maintaining our standard of excellent service. hire an additional Research Analyst in our Investment Management department. hire a Client Service Assistant continuing our high client service standards. expand our New York City client base through the Midtown Manhattan office. complete the final phase of our three-year technology improvement initiative.

We conclude with a heartfelt THANK YOU for the opportunity to help you and your family make the best financial decisions possible.

David L. Berman, CFP®, CLU J. Joseph McAleer IV Patrick J. Monaghan IV Co-founder & CEO Co-founder & Chief Administrative Officer Principal and Director of Planning

Andrew T. Cook, CFP® Melanie D. Hagan, MBA Susan M. Mitcheltree, CFP® Principal & Director of Investment Management Partner Principal Baltimore Business Journal Best Places to Work 2014 (3rd Place) • 2015 (3rd Place) • 2016 (1st Place)

InvestmentNews Best Practices Award – 2016 kestra Financial Firm of the Year – 2016

2017 BUSINESS GOALS | 7 MAIN OFFICE 9690 Deereco Road Suite 800 Timonium, MD 21093 410.560.9960

NEW YORK 475 Park Avenue South Suite 2100 New York, NY 10016 212.379.4056

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WWW.BMCPLANNING.COM

Securities offered through Kestra Investment Services (Kestra IS), Member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisor Services, (Kestra AS), an affiliate of Kestra IS. Berman McAleer LLC is a member of Fusion Advisor Network, a platform of Kestra IS. Berman McAleer, LLC is not affiliated with Kestra IS or Kestra AS.* To receive the 2016 Five Star Wealth Manager award, researched and managed by Five Star Professional, a wealth manager must meet ten objective eligibility and evaluation criteria associated with wealth managers who provide quality services to their clients. 1215 wealth managers in Baltimore and surrounding areas were considered for the award. 356 were named 2016 Five Star Wealth Managers which represents approximately 30% of the total wealth managers in the area. Wealth managers do not pay a fee to be considered or placed on the final list of 2016 Five Star Wealth Managers. The Five Star award is not indicative of the wealth manager’s future performance. To identify the 2016 Best Practices Award winners, InvestmentNews Research created composite scores that examined the rate of growth, profitability and productivity levels for all of the participants in the 2016 InvestmentNews Financial Performance Study. The “Best Practices” were those who ranked among the top-quartile of all participants; in addition, the final firms were selected after qualitative interviews conducted by the InvestmentNews Best Practices Committee.