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For immediate release, 08/16/2011

Jefferson National Discusses Market Impact on AUM

RIAs, Fee-Based Advisors and TPIAs Outperform the Market

New York, NY and Louisville, KY—August 16, 2011—In a hard selloff that began on July 25, leading indexes have now plunged more than 12% since the start of the Third Quarter. After the Crash of 2008, which wiped out at least $2.2 trillion in investor wealth, followed by the flash crash of 2010, many investors see last week’s collapse as yet another reason to panic. But some advisors are having more success than others.

“At a time when all major indexes are losing value and volatility has spiked to unprecedented levels, our data shows that the RIAs, Fee-Based Advisors and TPIAs working with Jefferson National are substantially outperforming the market and mitigating risk for their clients,” said Laurence Greenberg, President of Jefferson National. “During these uncertain times, the success of these advisors shows that following a strategic plan, managing assets holistically, remaining responsive and upholding a fiduciary obligation to clients is the best defense.”

To provide greater insight on the impact of these recent market events, Jefferson National, a leading innovator of value-added financial products and services for RIAs and fee-based advisors, evaluated advisors’ Quarter-to-Date assets under management1 during the period from Thursday, June 30 through Friday, August 12:

  • The S&P moved from 1,340 to 1,170, a decline of 12.0%.
  • At the same time, RIA’s, Fee-Based advisors and TPIAs working with Jefferson National showed dramatic stability, with AUM declining a mere 1.59%.
  • These advisors continue to be proactive about harvesting gains and moving into defensive positions such as cash. RIA allocation to Money Market Funds is up roughly 30% since the start of the quarter.
  • More importantly, several TPIAs delivered positive performance through tactical management and successful hedging strategies.

In the past week the market has been hammered by panic selling. On Monday, August 8, the S&P plummeted roughly 7% in a single day. It was the worst day for the market since December 1, 2008. The blows continued on Wednesday, August 10, when the S&P dropped another 5% in a single day. While the week ended on an up note, with gains on both Thursday and Friday, the coming weeks and months are clouded by uncertainty. A strategy to anticipate and successfully manage the volatility has been key for many advisors.

“While the damage to markets has been measurable, we believe the declines have created great opportunity,” said Kenny Landgraf, Principal, Founder, President and Chief Investment Officer, Kenjol Capital Management. “By harvesting gains, increasing allocations to cash, and in some cases taking inverse positions to the market, Kenjol’s dynamic approach seeks to mitigate some of the losses during extreme downturns while positioning clients for the future buying opportunities that we believe will present themselves through the end of the year.”

“The key is to move when discipline tells you to move—not when emotion tells you to move. We recognized the volatility and a downward move in the market, and decreased our equity positions accordingly,” said Dan Easley, Director of Asset Management SFG Asset Management. “Active asset management during periods of extreme volatility and market decline allows investors to benefit from an unemotional, disciplined, well informed approach. As a result, the risk for our clients has been greatly reduced.”

1Past performance is no guarantee of future results. 2Jefferson National's Monument Advisor has a $20 flat-insurance fee on more than 97% of its underlying funds. Certain funds also have a transaction fee ranging from $19.99 to $49.99 per transaction, depending on the number of transactions per year for investors wishing to purchase shares of ultra low-cost funds. See the prospectus for details. Like other variable annuities, the customer pays fees of the underlying funds selected plus the fees of any advisor hired.

Media Relations
JeffNat Deborah Newman 502.587.3858

About Jefferson National

We are committed to serving RIAs and fee-based advisors with investing solutions that help their clients build wealth and achieve financial goals. Named the industry “Gold Standard” for our unique approach, we continue to invent new ways to help advisors take their seat on the client’s side of the table. We believe above all that consumer value is in everyone’s best interest.