Continental Who's Who

James A. Pupillo, Managing Director, Partner HighTower Advisors - Scottsdale

Jim has been involved in the Investment Management Consulting Advisory business since 1987 and is the Managing Director, Partner for HighTower -Scottsdale. HighTower Advisors is a primary destination for the more sophisticated private and institutional clientele.

Prior to joining HighTower Advisors his career began with E.F. Hutton’s Consulting Group, which is today known as Morgan Stanley Graystone Consulting. Jim graduated with a Bachelor of Science degree in Management-Administration and Marketing from Indiana University-Bloomington. Jim was chosen as one of America’s Top 100 out of 7000 Investment Management Consultants screened in 2006, 2007, 2008, 2009 2010 & 2011 and ranked #1 in Arizona for 2009 by Barron’s Magazine, selection related to ethical standards and professionalism. Jim has earned the Certified Investment Management Consultant (CIMC®) in 1994. He has been a Certified Investment Management Analyst (CIMA ® ) since 1997, and obtained the Investment Strategist Certification in 2004, both offered by the Investment Management Consultants Association (IMCA) through the Wharton Business School, University of Pennsylvania.

In 2006 he completed as valedictorian the Accredited Investment Fiduciary (AIF) Program conducted by the Center for Fiduciary Studies, an internationally recognized training organization for fiduciaries. He also holds the Global Fiduciary Strategist (GFS)  designation through the 3ethos Fiduciary Leadership Center. Jim has earned the American Indian Policy Institute at Arizona State University Tribal Financial Management Certification (TFMC™) as well.

Jim earned The Retirement Advisors University (TRAU) Certified 401(k) Professional, C(k)P™, designation in 2012 and is an adjunct instructor to 401k retirement Plan Sponsors for the TRAU Plan Sponsor University program. Jim has published several articles and has been a contributor to several books on the subject of optimally blending active and passive investment strategies regarding portfolio construction and fiduciaries responsibility. Jim serves on the Curriculum Advisory Board for Thunderbird School of Global Management’s Financial Services Summit event, President’s Cabinet of the Musical Instrument Museum and active sponsor of the Arizona 5 Arts Circle and the Arizona Community Foundation.

LDintelligence™ Portfolio Construction Process

Open-Sourced Asset Allocation Committee

(OSAAC)

Multi-sourced intelligence for best of class portfolio construction

• Prudent Risk Control is at the core of our portfolio construction process. Managing risk is paramount in how HighTower – Scottsdale designs, preserves, accumulates and monitors clients’ financial assets and liabilities. We achieve this through the following asset allocation processes.

• Strategic Asset Allocation models are derived from Advanced Portfolio Theory (APT) consisting of the best from Modern and Post Modern Portfolio Theory to build LDintelligence™ (LDi™) portfolios.

• Tactical Asset Allocation consisting of:

-          Global sub-asset class tilting (under /overweight methodology)

-          Counter-trend equity and market neutral fixed income hedging strategies

-          Both are designed to enhance upside return potential and downside risk protection.

• LDintelligence “Balancing the Balance Sheet” is an asset / liability management approach taken client by client. We seek to design asset/liability modeled strategies aimed to accomplish each client’s cash flow needs while proportionately reducing their downside risk exposure.

Our Investment Philosophy

Managing capital markets portfolio risk is paramount in how we, preserves, accumulates and monitors clients’ financial assets and liabilities. We seek this through our “Balancing the Balance Sheet” approach which designs asset/liability modeled strategies aimed to achieve clients’ growth and/or cash flow needs while proportionately reducing their downside risk exposure.

Our Liability Derived intelligence™ portfolio construction methodology is designed around your Liability Derived index™, which fully embraces both Modern and Post Modern Portfolio Theory (PMPT) beliefs.

LDi™ methodology uses a “Conditioned Value at Risk” – “CVaR” framework with an upside potential / downside risk optimizer. LDi™ is derived from the work of three Nobel Prize Laureates (Markowitz, Sharpe & Kahneman) and other renowned Academics.  The LDi™ process results in a more robust and effective way to manage downside risk versus a Modern Portfolio Theory Mean Variance framework, prevalent as today's industry standard.

LDi™ portfolio construction recognizes that most active managers are not 100% style pure as industry labeled. This style deviation is for various valid reasons in their attempt to beat their style benchmarks. However, their portfolio's actual underlying style blends should be identified and accounted for when implementing their active management into the recommended asset allocation portfolio construct.

LDi™ portfolio construction uses “style pure” indices to accomplish these extra steps and to achieve:

• Enhanced asset allocation optimization using mutually exclusive and exhaustive style pure indices

• More accurate active manager skill evaluation to better identify active managers' added value

• Greater assurance of intended asset allocation adherence when blending active managers

• Optimally blended active and passive investments to obtain the recommended asset allocation

These extra steps create better-built portfolios with greater integrity. Better built portfolios are linked to meeting investors’ growth and/or cash flow needs, as opposed to beating arbitrary market indices is a process designed to enhance financial outcomes for obtaining investors' goals. Request the Liability Derived intelligence™ – LDi™ white paper for a more detailed explanation.

Your Liability Derived intelligence™ portfolio construction focus begins with identifying the investor’s Liability Derived index™ calculation. The LDi™ calculation links the investor’s assets to their cash flow liabilities or financial goals. We believe these advancements and the LDi™ calculation is a better method for designing suitable portfolios. The LDi™ defines investors’ income, inflation protection, growth and liquidity needs while also monitoring portfolio risk on an ongoing dynamic basis. The LDi™ calculation is also an event driven discipline responsive to capital markets and/or investor circumstantial change(s). These events driven investing considerations are designed to help avoid emotional hazards of market timing and other potentially destructive investment decisions.

LDi™ strives to dramatically increase investors’ confidence and financial goal achievement success. These tools, combined with HighTower's open source vendor platform with open architecture, empowers our group to provide customized strategies that are objective, unbiased, and transparent for each client’s unique financial circumstances. HighTower enables our group to effectively address our “Balancing the Balance Sheet” approach and full fiduciary standard of care on behalf of our institutional and private clients alike.

HighTower – Scottsdale Profile

Assets Under Management (AUM):

•  Internal assets custody: - $1 Billion

•  External non-custody assets: - $500 million

•  Total assets: $1.5 Billions

Liabilities Under Management (LUM) - $250 million HighTower - Scottsdale professionals understand fiduciary responsibility and serve a variety of clientele regarding asset management, banking/treasury services, stock plans, executive services and qualified and non-qualified retirement plans.

Our clientele consist of:

•  Private Clients and their Corporate, Institutional and Philanthropic Affiliations

•  Professional Groups such as Law Firms, Medical Practices and Associations

•  Private/Public Corporations

•  Eleemosynary Non-Profit Organizations

•  Native American Nations/Corporations

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HighTower - Scottsdale

14646 N. Kierland Boulevard, Suite 125

Scottsdale, Arizona 85254

480.998.2995 (office)

888.602.3331 (toll free)

www.hta-s.com