Sonoma Wealth Management Group at Morgan Stanley

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Our Approach

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Our Process

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Family Office Services

The Roots of Good Fortune Where we live, success often appears to arrive suddenly. The entrepreneur takes his company public. The new biologic passes phase two trials. The pioneering vintner decides it’s time to sell. Good ideas can become great fortunes, seemingly overnight. There is, of course, more to these stories. The years, and often decades, before the liquidity event are spent in diligent preparation. Many of these “suddenly” successful people have spent their entire lives studying, working and sacrificing other interests. Many have come up short in other ventures, learning what it takes to ultimately succeed. The moment of success grew out of a lifetime of preparation. Like most of our clients, Sonoma Wealth Management Group has worked long and hard to get where we are today. All of us have spent our entire careers at Morgan Stanley, forming into a cohesive team. We have availed ourselves of virtually every opportunity the firm offers to enhance services to our clients. We combine our talents to help clients of substantial wealth simplify and manage their complex personal and financial lives, so they and their families can live the lifestyles they choose. We understand how hard they have worked to achieve that reward.

Back row, left to right: Brenda van der Zee, Craig Franklin, Beth Wyatt, Ivar Bolander; Front row, left to right: Karolyn Bradley, Eden Williams

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Our approach

Managing Your Wealth To Enrich Your Life At Sonoma Wealth Management Group, we have spent nearly three decades helping exceptionally successful families manage their wealth. All of these families have had their own challenges and aspirations, and most have had relatively sophisticated financial needs. Our goal is to help every one of our clients navigate the complexities and responsibilities that come with financial success, so they can focus on the people, issues and activities that enrich their lives. Between our own experience and the extensive resources of Morgan Stanley, we provide an exceptionally broad range of financial capabilities. We can help you create, implement and maintain a comprehensive wealth strategy, and provide access to institutional strategists and investment bankers. We offer the full range of services of a family office, and can even help you educate your children so they will be better prepared to handle their responsibilities. Most importantly, we can coordinate all of these efforts into a single, cohesive strategy designed to support the life you want to live, and leave behind a legacy that will endure for generations.

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Sonoma Wealth Management Group Helps You Address the Unique Challenges of Significant Wealth Maximizing the impact of your charitable contributions Creating a legacy plan to preserve family harmony as well as assets Diversifying highly concentrated positions in a tax-efficient manner Managing risk within each entity and across all of your holdings Understanding the flow of assets across multiple financial entities Preparing your children, emotionally and intellectually, to manage wealth

Our process

Planning for the Life You Want to Live Those who have worked only with a stockbroker may be surprised by our wealth planning process. In our initial conversations, we won’t talk much about asset allocations and investment options. Instead, we’ll ask you about your business, your family and your personal aspirations. We’ll find out how you want to change your industry or your community. We’ll discuss the hopes you have for your children, and the legacy you would like to leave them.

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Discovery We develop a deep understanding of your professional, personal and financial situation, learning about your history, your family, your interests, your concerns and aspirations. This helps us personalize a plan to fit your needs and preferences.

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Monitoring

Tax, Trust and Estate Strategy

As the markets and your personal needs evolve, we track the progress of your plan to make sure it continues to address your goals. We provide regular, consolidated performance reporting and inform you when circumstances dictate a change in strategy.

Our team will reach out to your CPA and estate attorney, and review your balance sheet and estate plans. The resulting analysis of your income and estate-tax circumstances helps us identify planning techniques that may be tailored to meet your objectives.

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Implementation We execute all asset allocation changes you have approved, and provide access to any additional services you require. These often encompass estate, trust and philanthropic services, borrowing, liability management, and the establishment of a family mission statement. 

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Strategic Asset Allocation We develop a detailed action plan with recommendations to help grow, preserve and transfer wealth. This includes a customized asset allocation, across multiple entities, that integrates your investing and estate plans.

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Family Governance and Dynamics

Lifestyle Advisory Performance Management Custody

Philanthropic Services Private Health Advisory Personal Security

family office services

Family Wealth Management That Puts Family First Sonoma Wealth Management Group’s founding partner, Ivar Bolander, has been designated as a Family Wealth Director at Morgan Stanley. A distinction earned by fewer than 250 of the firm’s 17,000+ advisors, the Family Wealth Director designation allows us to provide an extensive range of services that is reserved for an exclusive subset of ultra high net worth families. These go far beyond traditional wealth management capabilities to address the extensive range of issues facing the most financially successful families, including: •  A n integrated approach to planning that includes family dynamics, wealth transfer, asset protection and location, and business succession planning. •  Services to help maintain family unity across generations, focusing on family mission, governance and conflict management. •  Strategies to help ease administration burdens — from consolidating your financial reports to managing some of the most complex aspects of your life. •  Strategies to help you transfer your assets and your values to future generations. •  Financial education to prepare future generations for the demands of handling significant wealth.

Educational Programs

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Investment Management

Access to Anything. Coordination of Everything. Sonoma Wealth Management Group is a local team with access to world-class resources. With a fully open architecture, we are able to explore any alternative to find the optimal strategies for our clients. Through Morgan Stanley’s vast product set and talent pool, we can provide access to capabilities that are only available to Morgan Stanley clients. This powerful combination allows us to deliver nearly any product or service that our clients need to help protect and enhance wealth, create a meaningful legacy, and enjoy a fulfilling lifestyle.

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• Assistance with Investment Policy Statement • Tax Efficient Asset Allocation • Portfolio Construction and Management • Open Architecture Platform • Morgan Stanley Proprietary Investment Opportunities • Money Manager Due Diligence Research • Alternative Investments

Trust, Estate & Legacy Planning • Wealth Transfer and Trust Strategies • Current Will, Trust and Insurance Review • Stock Option Analysis • Creditor Protection • Pre-Liquidity Planning • Coordination With Outside Legal and Tax Advisors

Educational & Networking Events

Lifestyle Advisory Services

Comprehensive Wealth Planning • Wealth Transfer Strategies • Stock Option Strategies and Executive Compensation • Diversification Strategies for Concentrated Stock Positions • Section 1042 Exchanges – Sale of Stock to an ESOP • Retirement Planning Strategies • Business Succession Planning • Charitable Planning • Trust and Estate Planning

• Aircraft Advisory, Charter & Finance • Art Advisory & Finance • College & Admissions Counseling • Personal Security & Home Advisory • Resources for Household and Administrative • Staffing needs • Luxury Travel Companies • Entertainment Experiences & Agents for Special Events

Balance Sheet Management • Securities-Based Lending • Financing of Restricted Stock • Access to Financing of Aircraft, Sports Teams and Art

• Family Legacy and Next Generational Programs • Family Office Forums • Women’s Retreats • Senior Management Roundtables

Access To Corporate Services • Capital Markets and Investment Banking Interaction • Directed Shares, Stock Plans, 10b5-(1) Programs • Cash Management Services* • Retirement and Pension Plans • Access to Lending

Assist With Philanthropic Services • Estate and Legacy Planning • Research, Analysis & Operational Solutions • Board Development, Placement & Internship Services • Grant-Making Strategies • Foundation Strategies • Family & Philanthropy Resource Network • Nonprofit Collaborations & Alliance Services

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case histories: innovative strategies, rooted in experience

Case Study: The Full Spectrum of Wealth Management Our clients owned several million shares of a closely held company that was sold to a publicly traded corporation. When we had our first meeting with them, they were living in their original house, enjoying a comfortable, modest lifestyle and anticipating a nine-figure windfall. We discussed the transaction and reviewed their current situation. They shared their hopes and dreams, which helped us define short, intermediate and long-term personal and financial goals. We also helped them interview and select estate planning and tax advisors appropriate for their new level of wealth. From the outset, managing risk and monetizing their highly concentrated position was our primary focus. Once the transaction was complete, they had us implement a plan to hedge, sell and diversify their concentrated single stock position and create an income flow. We also developed a highly diversified investment portfolio, which included a

solid allocation to municipal bonds and a heavy dose of alternative investments. They asked us to help set up a Family Limited Partnership and transfer some shares of the original company into it. This yielded immediate estate tax benefits via discounting, transferring some of the future stock appreciation outside of their estate. We also assisted them in setting up a Charitable Remainder Trust funded with highly appreciated shares which will fund their charitable goals in the future while providing current income. By offering a variety of customized borrowing strategies through tailored lending, including the establishment of a securities-based credit facility, we also helped them gain access to further liquidity when needed. Our clients’ circumstances recently changed. The Morgan Stanley Wealth Planning Center came in to help analyze the potential impact on their estate taxes, and are working closely with our clients’

From the outset, managing risk and monetizing their highly concentrated position was our primary focus. estate planning attorney and CPA to accelerate gifting to the next generation. We are also utilizing advanced planning strategies to provide current income to their children. We meet regularly with these clients, providing unique advice and services that can only be accessed by Family Wealth Directors. Unlike many from the dotcom era, these clients have preserved the bulk of their wealth and still lead the lifestyle they envisioned when we first met.

Case Study: Approaching Retirement on the Client’s Terms A successful professional couple, we’ll call them Bob and Sarah, started working with us a number of years ago when Bob retired and transferred his 401(k) distribution into an IRA rollover account with us. They had grown children and were in excellent health, allowing them to pursue their passions for traveling and golf. Bob started working part-time in the sports industry and Sarah continued to work at a local business. Their primary goal was to maintain their current lifestyle and prepare for the day when 12

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Sarah wanted to retire. We formulated a strategy to see that they had enough assets to retire, while enjoying all of their personal interests. We analyzed their investment situation, with a focus on creating a diversified investment portfolio for his IRA that would meet the dual need for current income and growth. We also conducted advanced planning around their longerterm retirement income needs. For over a decade now, we have helped them rebalance their portfolio as market

conditions warranted, with a focus on helping to protect and grow their capital. Now that Sarah is moving closer to her retirement, we have engaged them in more advanced Planning using our LifeView Plus program, and focusing on the complexity around social security strategies. We are transitioning the management of their investment portfolio towards a discretionary tactical approach that works in concert with the retirement income needs planning done in LifeView Plus.

Case Study: The Value of Having a Wealth Management Team W e were introduced to the founder of a successful technology company who was working on his personal finances with the investment banks that had taken his company public. We listened to what he had to say and provided some non-biased insight into his situation. He became comfortable with our experience and our approach to risk management for concentrated equity positions, and subsequently transferred a portion of his holdings to us. In our discovery meeting with our new client and his wife, we learned about their strong commitment to family and community, and gained a complete understanding of their financial situation. Their primary focus had been on liquidating stock for other investments, buying a new home and creating a stream of income. In doing so, they had exercised a tremendous number of Incentive Stock Options and had a large potential tax liability. We immediately discussed the situation with them, put them in touch with a CPA, and worked with him to recommend a disqualifying disposition. As a result, they avoided a substantial alternative minimum tax. Working with the new legal and accounting teams, we developed and executed a three-pronged approach to reducing their single stock risk while creating some liquidity. This was accomplished with the outright sale of shares, hedging, and contributing to an exchange fund. A key component of the plan was creating a municipal bond portfolio that provided enough tax-free income to fund the lifestyle they chose.

We also helped them set up an LLC structure to fund their real estate and venture capital commitments. All these efforts paid off, as the stock in which they had been concentrated fell dramatically the following year. Our recommendations were intended to help our clients achieve their personal and financial goals, irrespective of what might happen to the remainder of their concentrated equity position. Today, we are providing them with advice on estate planning, philanthropic efforts and investment management, and are involved with preparing their children to handle the responsibilities of substantial family wealth. We are focused on maximizing wealth transference, utilizing their lifetime exemptions as part of a total review of their estate planning and philanthropic focus. We continue to work in a seamless fashion with their tax and legal advisors.

“ We immediately discussed the situation with them, put them in touch with a CPA, and worked with him to recommend a disqualifying disposition. As a result, they avoided a substantial alternative minimum tax. ”

The case study presented is provided for illustrative purposes only. Past performance is no guarantee of future results. The information has been obtained from sources we believe to be reliable, but we cannot guarantee its accuracy or completeness. These strategies do not guarantee a profit or protect against loss and may not be suitable for all investors. Each customer’s specific situation, goals and results may differ.

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our team

A Shared History and a Common Vision Sonoma Wealth Management Group is a team of four financial professionals and two client service associates who have worked together for an uncommonly long time: over a decade for the Group as currently constituted, and far longer for some of us. That common history contributes greatly to our ability to work effectively as a team. We have developed complementary strengths and a cohesive outlook. We trust each other, a critical waypoint on the way to earning the trust of our clients. When you work with one of us, you get the best of all of us.

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our team

Ivar J. Bolander, CIMA®, CPWA®, CWS®

Craig Franklin, CIMA®, CPWA®, CWS® Senior Vice President Senior Investment Management Consultant Wealth Advisor

Senior Vice President Family Wealth Director Wealth Advisor

A Morgan Stanley veteran of over 30 years, Ivar Bolander focuses on the multifaceted, multigenerational financial needs of successful individuals and their families. Ivar has particularly deep experience helping accomplished executives and entrepreneurs manage concentrated equity positions. He provides knowledge and guidance in the creation and implementation of highly customized investment strategies and provides access to a broad range of estate planning strategies and other family office services. A graduate of the University of Washington, Ivar has continued to expand his financial education ever since. He earned the Certified Investment Management Analyst designation®, taught in conjunction with The Wharton School at the University of Pennsylvania, and the Certified Private Wealth Advisor® certification, taught in conjunction with The University of Chicago Booth School of Business. Ivar also earned the Certified Wealth Strategist® designation from the Cannon Financial Institute, a program that teaches the technical and interpersonal skills needed to work effectively with the most complex client issues. Ivar is a Morgan Stanley Family Wealth Director (FWD), an exclusive designation held by approximately 275 of the firm’s 16,000+ advisors. FWDs must demonstrate professional knowledge and experience in a range of areas, including

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estate planning, traditional and alternative investments, control and restricted securities, financing, alternatives, hedging and monetization, and business succession planning. As an FWD, Ivar gains access to a variety of family advisory services, including family governance and dynamics, philanthropic services and customized reporting. Ivar has participated on many of the boards and councils that shape policy at Morgan Stanley Wealth Management. He was a founding member of the Morgan Stanley Senior Consultants Program. He plays a continuing role on the Consulting Group Advisory Board and serves on the Morgan Stanley Marketing Council and the Financial Advisor Advisory Council (FAAC). The FAAC acts as liaison between Financial Advisors and Senior Management to provide insight on key initiatives and enhancements within the organization. Through their collaboration, they work to create innovative approaches for continued success for our clients and the firm. Recognized by the Financial Times among the “FT 400 Top Financial Advisors” for 2015, Ivar is widely sought for his opinions on wealth management issues. He frequently speaks at national, regional and local conferences. Ivar lives with his wife, Shelly, in his native Santa Rosa, where they have raised their three sons.

Craig Franklin works with successful entrepreneurs, executives and other high net worth clients of the Sonoma Wealth Management Group, guiding them through their wealth planning and asset allocation decisions. Among his many responsibilities, Craig takes an active role in the design and implementation of fixed income portfolios, handles large equity trades and advises clients on their decisions in the alternatives space. He also manages the syndicate area for Morgan Stanley’s Santa Rosa office and is responsible for many of the Sonoma Wealth Management Group’s new business efforts. Craig joined Morgan Stanley in 1994. Craig graduated from Chico State University with a Bachelor of Science degree in finance, and has worked to expand his professional skills ever since. He earned the Certified Investment Management Analyst® designation, taught in conjunction with The Wharton School at the University of Pennsylvania. Craig holds the Certified Private Wealth Advisor®

(CPWA®) certification, taught in conjunction with The University of Chicago Booth School of Business. The CPWA® designation is the only advanced designation designed for financial advisors and consultants who work with high net worth clients on the life cycle of wealth. Craig attended the Senior Financial Advisor program and has completed Morgan Stanley graduate courses in Asset Allocation and Investment Consulting. He also earned the Certified Wealth Strategist® designation from the Cannon Financial Institute, a program that teaches the technical and interpersonal skills needed to work effectively with the most complex client issues. A sixth-generation Californian, Craig has deep roots in Sonoma County. He serves on the board of a local educational foundation and coaches youth basketball. Craig lives in Healdsburg with his wife, Lesli, and their two children.

Beth Wyatt, CFP ®, CIMA® Vice President Investment Management Consultant Financial Advisor

Brenda van der Zee

With close to three decades of experience as a Financial Advisor, Beth Wyatt provides tailored service and thoughtful, proactive advice to her clients. Beth has extensive experience handling the complex needs of financially successful families and works to create customized strategies helping clients live the lifestyle they choose and plan for a smooth transition from one generation to the next. She is currently participating in the Institute of Family Wealth Management Program through Morgan Stanley. Beth graduated from San Francisco State University with honors and received a Bachelor of Science degree in business administration, with an emphasis in small business administration. After running her own catering business and writing business plans for small business owners, she joined Morgan Stanley in 1987. Beth received the Certified Investment Management Analyst (CIMA®) designation from the Investment Management Consultants Association, taught in conjunction with Wharton Business School. She also received the CFP® certification after successfully completing the rigorous requirements of the Certified Financial Planning Board of Standards, Inc. Beth has an active interest in the health of our food system and the land that supports it, serving as a board member for LandPaths and Slow Food Russian River. A native of Marin County, Beth moved to Sonoma County over 30 years ago. She lives in Santa Rosa with her husband, Mark, with whom she has three daughters.

An experienced financial planner, Brenda van der Zee works with clients of the Sonoma Wealth Management Group to help them create comprehensive plans tailored to their specific needs, goals and challenges. Brenda works with other advisors on the team to consider the current assets, investment philosophy and risk tolerance of each client, and seeks to recommend efficient and realistic ways to help meet their financial goals. Her dedication to constructing precisely tailored solutions, coupled with in-depth knowledge of Morgan Stanley financial planning tools, is a great asset to many of the Group’s clients, particularly those at the earlier stages of wealth creation. Prior to joining Sonoma Wealth Management Group, Brenda worked as a Wealth Advisory Associate for the Santa Rosa office of Morgan Stanley. Brenda graduated with honors from Sonoma State University and received a Bachelor of Science degree in finance. She lives in Santa Rosa with her husband, Chris, and their two Jack Russell Terriers.

Financial Advisor

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our team

Karolyn Bradley

Eden G. Williams

Assistant Vice President Wealth Management Associate

Senior Registered Associate

With over 20 years of industry experience, Karolyn Bradley provides and coordinates a broad range of support services, working to cultivate and maintain an outstanding experience for both existing and prospective clients of Sonoma Wealth Management Group. Karolyn works with team members to address the specific needs and service requests of high net worth families and individuals. She is also the team’s master troubleshooter, coordinating the resolution of complex issues and concerns. Working to improve and streamline the team’s service model and operations procedures, Karolyn identifies practice management opportunities through various firm channels and provides support on products and services. She also implements quarterly business performance reviews in conjunction with the team. During her tenure at the firm, Karolyn has held various positions in client service and was also the complex training coach for many years assisting in mentoring her peers. Karolyn has an A.A. degree from Santa Rosa Junior College. Her main area of study was business administration and business law. She has undergone the extensive training required to become a fully licensed and registered Wealth Management Associate. Karolyn has been a longtime supporter of the local Council on Aging for senior citizens and served as a volunteer for the Miss Sonoma County Scholarship Program. She lives in Rohnert Park with her husband, Mike. They have two sons and two grandsons.

Drawing on fifteen years of diverse financial services industry expertise as a trader and relationship manager, Eden Williams supports the team’s Wealth Advisors in their efforts to deliver an outstanding client service experience. Eden focuses on the smooth functioning of branch operations and works directly with clients to ensure requests are met promptly and efficiently. A mentor to her peers, Eden draws on outstanding leadership skills and extensive background in the investment industry to help to create an attentive service environment for the Group’s clients. Eden began her career at Fidelity Investments trading equities, mutual funds and fixed income investments, and was promoted to a series of increasingly senior relationship management positions. She joined Morgan Stanley in 2015. A native of Marin County born to British parents, Eden graduated from Johnson & Wales University in Charleston, S.C. with a bachelor’s degree in food service management. After college, she lived in several states throughout the South, but came back to California to raise her children. She now lives in Petaluma with her husband, Chad, and their daughter and son. Eden spent her childhood touring America and camping with her parents and still greatly enjoys traveling and being outdoors gardening, camping and spending time with her family. She is a very active volunteer at both of her children’s schools and is an avid believer in eating healthy and staying fit.

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Connecting People, Ideas and Capital At Sonoma Wealth Management Group, we help affluent families manage their financial affairs to help protect and enhance the fruits of their successes. We understand the challenges of wealth, and have many decades of experience helping people simplify and manage their increasingly complex personal and financial lives, so they and their families can live the lifestyles they choose. We are an innovative group, eagerly seeking out new capabilities and new strategies that we can use to help create greater opportunities for our clients. Yet, our fundamental outlook is decidedly old school. We value loyalty to each other, our firm and, most of all, our clients. We have deep roots in our community, and a deeper commitment to sustaining its unique character for future generations.

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3562 Round Barn Circle 1st Floor, Santa Rosa, California 95403

707-524-1000

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800-752-5340 / Toll- F ree   707-524-1099 / fa x

morganstanleyFA.com/sonomawealthmanagementgroup

Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not “fiduciaries” (under the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise agreed to in writing by Morgan Stanley. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are encouraged to consult their tax and legal advisors regarding any potential tax and related consequences of any investments made under such account. Asset Allocation and Diversification do not guarantee a profit or protect against a loss. Portfolio Loan Accounts are provided by Morgan Stanley Bank, N.A. All credit facilities are subject to the underwriting standards and independent approval of Morgan Stanley Bank, N.A. Portfolio Loan Accounts may not be available in all locations. Rates, terms and programs are subject to change without notice. To be eligible for a Portfolio Loan Account, applicants must have a brokerage account at Morgan Stanley Smith Barney LLC, which shall serve as collateral for the Portfolio Loan Account. The ongoing availability of a Portfolio Loan Account is contingent on the client maintaining sufficient eligible collateral. The proceeds from a Portfolio Loan Account may not be used to purchase, trade, or carry margin stock, and cannot be deposited into a Morgan Stanley Smith Barney LLC or other brokerage account. Securities Based Lending (SBL) Risks: Borrowing against securities may not be suitable for everyone. You should be aware that securities-based loans involve a high degree of risk and that market conditions can magnify any potential for loss. Most importantly, you need to understand that: (1) Sufficient collateral must be maintained to support your loan(s) and to take future advances (2) You may have to deposit additional cash or © 2016 Morgan Stanley Smith Barney LLC. Member SIPC.

marginable securities on short notice (3) Some or all of your securities may be sold without prior notice in order to maintain account equity at required collateral maintenance levels you will not be entitled to choose the securities that will be sold. These actions may interrupt your long-term investment strategy and may result in adverse tax consequences or in additional fees being assessed. (4) Morgan Stanley Smith Barney LLC or its affiliates (the Firm) reserves the right not to fund any advance request due to insufficient collateral or for any other reason (5) The Firm can increase your collateral maintenance requirements at any time without notice (6) The Firm may have the right to call securities-based loans at any time and for any reason. Morgan Stanley Smith Barney LLC is a registered Broker/Dealer, not a bank. Where appropriate, Morgan Stanley Smith Barney LLC has entered into arrangements with banks and other third parties to assist in offering certain banking related products and services. Investment services are offered through Morgan Stanley Smith Barney LLC, member SIPC. Unless specifically disclosed in writing, investments and services offered through Morgan Stanley Smith Barney LLC are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, any bank and involve investment risks, including possible loss of principal amount invested. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and / or investments discussed in this material may not be suitable for all investors. Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. *The term “cash management services” does not imply that investments are managed by your Financial Advisor. CRC1435577  CS 8409756 03/16