Compliments of: Frank Dakos Investment Planning Counsel 1100-100 Conestoga College Blvd.

1. Quarter Ending September 30, 2011 Compliments of: Frank Dakos Investment Planning Counsel1100-100 Conestoga College Blvd. Kitchener, ON N2P 2N6 Phone: 519-578-2591 Email: fdakos@ipckitchener.com Website: www..moneytipswithfrank.com The Report Card provides a comprehensive review of past, current and potential factors that may impact your investments. Our goal is to continuously monitor your investments to help you meet your financial objectives.

2. About This Report While this is a quarterly communiqué, the comments in this Report Card refer to the last three and 12 months. Market discussions are related to the indices and do not analyze or reflect your personal investments. Counsel Portfolio Services examines the performance and risk management of each mandate within your Counsel investment solution. We review the performance, risk management and overall effectiveness of each sub-advisor and underlying fund manager. Counsel investment solutions adopt a long-term approach to investing. Each portfolio solution is properly diversified to reflect an appropriate: Asset mix Geographic allocation Investment style mix A market-cycle typically refers to a period of between six and eight years. Please refer to the chart at the end of this presentation for further information on Counsel portfolio solutions. The benchmarks used for each Counsel investment solution can be found at the end of this presentation.

3. Agenda Market & Economic Overview What The Investment Specialists Say Review Of Counsel Investment Solutions

4. 1. Market & Economic Overview

5. Global Stock Markets: Index Movements Q3: • Challenging quarter for all markets • Equity returns affected by concerns over: • Unsustainable European sovereign debt levels and its potential impact on Europe’s banking sector • Status of the North American economic recovery • Pace of emerging market economic growth, particularly China • A global slowdown has been in place since April 2011 • Slowdown is primarily due to: • sovereign debt concerns in Europe • unrest in the Middle East • impact from the aftermath of the earthquake in Japan in March Performance is calculated using local currency. Data as at: September 30, 2011 Source: Morningstar Direct, Counsel Portfolio Services

6. ? Where Are We?

7. Wild Quarter Source: Thomson Financial Inc., Counsel Portfolio Services.

9. Reasons To Be Negative • Europe continues to muddle through its sovereign debt issues • Unemployment is high across major developed economies • Markets are increasingly more correlated • Economic growth is slowing across major economies including U.S., China and Brazil • Short covering by speculators • China is dealing with an uncomfortably high inflation rate of over 6% • U.S. faces an election year in 2012

10. Reasons To Be Negative • Warnings for a gloomy economic outlook by Central Banks and the IMF • “…significant downside risks to the economic outlook including strains in global financial markets.” - Ben Bernanke, Chairman of the U.S. Federal Reserve, Federal Reserve Statement, September 21, 2011 - • “…world economic outlook not so positive.” - Stephen Harper, Prime Minister of Canada, in a press conference following a meeting with Finance Minister Jim Flaherty and Bank of Canada Governor, Mark Carney September 27, 2011 - • “…problems in the eurozone are now so big that they have begun to threaten the stability of the world economy.” • David Cameron, Prime Minister of the U.K, • in a speech to the Canadian MPs, September 22, 2011 - • “The world economy is in a dangerous new phase, with risks on the rise, but while the problems are largely economic, the solutions are mainly political.” - Christine Lagarde, Managing Director, IMF in a press conference ahead IMF Annual Meeting, September 22, 2011 -

11. The World Is In A Cautionary Mood

12. Why The Focus On Greece? • The bond market has clearly priced in that Greece will likely default on its debt • Threats building in the European banking system which hold Greek debt and debt from peripheral European economies • Greece shares the single currency, the euro (a monetary union). Difficult for the 17-nation euro area’s political leaders to reach a prompt agreement without a fiscal union • The longer it takes to reach a solution, the more it will impact investor confidence – expect volatility and short-term pain to continue Collective commentary from Mawer Investment Management Ltd., Picton Mahoney Asset Management and Thornmark Asset Management Inc.

13. Greek Bond Yields At Record Levels Greek 2-Year Bond Spread Against German Bund • Greek yields are once more reaching record highs • A promising expansion of the main European bailout mechanism has been agreed upon in principle, but its implementation seems to be considerably less certain Source: The Global Investment Outlook, RBC Investment Strategy Committee, Fall 2011

14. Spanish And Italian Bond Yields Rising Spanish and Italian Greek 2-Year Bond Spread Against German Bund • Alarmingly, Italy and Spain have now been sucked into the vortex of fear, increasing their borrowing costs • The risk is that their temporary liquidity problems could become solvency problems should the cost of borrowing continue to rise • These countries are many times larger than Greece,Ireland and Portugal Source: The Global Investment Outlook, RBC Investment Strategy Committee, Fall 2011

15. European Nations Have Been Through This Before: Usual Workout Period Has Been 4 to 9 Years Select European Economies Undergoing Large Fiscal Adjustments Imbalances and Workout Periods 1981 through 2009 Source: Empirical Research Partners

16. Correlation • Performance of the S&P500 (2001-2011) resembles performance of MSCI Japan (1990-2000) • Will the next 10 years for the S&P 500 have a similar pattern to the MSCI Japan (2001-2011)? • Remember – past performance or data mining is not indicative of future performance

17. Are We In For Another Crash Or Financial Crisis? • Correction - Yes • Financial crisis - Maybe Our Investment Specialists say: • “We do not feel that much has changed from a year ago. European sovereign debt problems first surfaced in May of 2010, U.S. Government debt problems have been mounting for almost three years and China has been trying to control developing world growth for the better part of a decade. We continue to stick to our view that this will be a long and pronounced bottoming process for developed economies as debt problems are sorted out by consumers, corporations and governments.” – Leon Frazer & Associates Inc. • “At this point, another recession seems unlikely given most developed economies have never fully recovered from the last” – Montrusco Bolton Investments Inc.

18. Are We In For Another Crash Or Financial Crisis? • “We do not believe the U.S. will tip back into recession territory. The economy is doing reasonably well in some respects. However, job growth, housing and credit expansion have not yet demonstrated consistent improvement and are a primary reason why consumer and business confidence remain at low levels.” – Marsico Capital Management, LLC • “Despite the “crisis of policy confidence” in the eurozone, it is likely that words will be turned into action. Those actions, however, will include more fiscal austerity and this will likely contribute to a recession in Europe. In emerging markets where growth is stronger, there are inflation pressures that could lead to tighter monetary policy. Therefore, growth in these markets is also subject to risks on the downside. - Thornmark Asset Management Inc • “At this stage, we do not believe that a North American recession is imminent.” – Acuity Investment Management Inc.

19. Is It All Doom And Gloom? • Oil and food prices are falling • Mortgage rates are expected to remain low • Companies are sitting on record amounts of cash • U.S. and Canadian banks have replenished their balance sheets • Stocks are not trading at expensive levels

20. Good News: Cash On Balance Sheets Source Globe & Mail, Sept 27, 2011 – Moody’s Investor Service

21. Reasons To Be Positive • Companies have large cash balances • did not have this amount of cash sitting on the sidelines in 2008 • Politicians are working together • Markets been through rough periods before

22. Equity Valuations Are At Attractive Levels World Equity Market Trailing PE Ratio • Despite solid earnings, equity market valuations tumbled in mid-summer as risk aversion soared and the market priced in a greater likelihood of a second recession in three years • Margins for TSX-listed companies show a solid expansion that has not yet been dented - a key point that is often overlooked during times of extreme market turmoil • For many corporations, current sales are simply not that sensitive to wild swings in newspaper headlines • Companies have spent the last three years trimming fat from their operations. Each dollar of top line sales now delivers a near-record stream of profits to the bottom line Source: The Global Investment Outlook, RBC Investment Strategy Committee, Fall 2011

23. It Will Be Slow

24. Source: Forbes

25. Canadian Currency Performance The European sovereign crisis caused a flight to safety to the U.S. dollar U.S. dollar appreciation and lower oil prices led to a drop in the Canadian dollar Comments by political leaders that the world is in turmoil also supported the U.S. dollar CAD vs. Euro CAD vs. U.S. Dollar Source: Bank of Canada Source: Bank of Canada Source: Bank of Canada

26. Canada: Equities Versus Fixed Income Fixed income, which was written off by many investors at the beginning of the year because of the fear of inflation, was again the saviour for well balanced investors A run to safety due to Europe’s crisis, coupled with politicians calling for global interest rates to be kept low for several years were the main causes of fixed income appreciation Equity valuations are cheap and, at some point, a reversion to the mean has to occur However we need to demonstrate patience first Long-term: Equities vs. Bonds Short-term: Equities vs. Bonds Source: Globe and Mail

27. S&P TSX 60 Total Return S&P TSX Completion Total Return S&P TSX Small Cap Total Return MSCI Canada Growth Index MSCI Canada Value Index. Canadian Market Overview Investment Style Performance Market Cap Performance • Global slowdown affected Canada • Defensive sectors such as Utilities and Consumer Staples provided the most security. Utilites was the only positive sector • Energy was affected by oil prices, which have declined since April • Slowing economic growth also affected Industrials and Consumer Discretionary. • Caution recommended Source: Morningstar Direct Source: Morningstar Direct

28. S&P 500 Total Return S&P Mid Cap 400 Total Return S&P Small Cap 600 Total Return Russell 1000 Value Index Russell 1000 Growth Index U.S. Market Overview Investment Style Performance Market Cap Performance • Europe’s debt concerns political confusion in the U.S. were the culprits of volatility • Utilities was the only positive sector, perhaps supported by investors seeking capital preservation and/or higher dividend yields • Most severe declines seen in sectors most closely linked with economic activity and macroeconomic outlook, both of which weakened during the quarter • Energy was affected by oil prices, which have declined since April • Caution recommended Source: Morningstar Direct Source: Morningstar Direct Returns measured in U.S. dollar terms

29. International Market Overview Europe, in particular Greece, were forefront in the global crisis The fear of a contagion and political mismanagement affected European equities Defensive sectors such as Utilities and Consumer Staples provided the most security Energy was affected by oil prices, which have declined since April Slowing economic growth also affected Industrials and Consumer Discretionary. Concerned that there are no quick fixes to Europe’s problems MSCI EAFE Value MSCI EAFE Growth Investment Style Performance Source: Morningstar Direct Returns measures in Canadian dollar terms

30. 2. What The Investment Specialists Say…

31. On Equities vs. Bonds • “Fundamentals have been thrown out.  Businesses are priced for perpetual decline and there is really no improvement in conditions.  It has created huge opportunities for those who rationally assess business values during times of stress.  Further, many developed stock markets now have dividend yields which are greater than their respective 10-year bond yields, adding to the relative attractiveness of equities.” – Mackenzie Cundill Investments Inc. • “After the substantial decline in yields over the third quarter, we anticipate volatility to continue, but believe that the moves may be less significant in the coming months.” – Acuity Investment Management Inc.

32. On Interest Rates • “To mitigate any potential economic tipping point, the global central banks, in our opinion, will continue to be extremely accommodating for the foreseeable future. For example, the U.S. Federal Reserve (Fed) has commenced Operation Twist and the Bank of England has announced its second quantitative easing program (QE2).” – Dreman Value Management, LLC • “We do not believe the U.S. Federal Reserve (Fed) will increase rates unless some of the economic numbers improve and unemployment drops… the German Bundesbank is an inflation-oriented central bank. If they believe that inflation data is surfacing, they are likely to raise rates, which could give some short-term support to the currency. However, if the European Central Bank embarks on this path, we would be unsurprised if at some point they are forced to reverse. ” – Mawer Investment Management Ltd.

33. On Current Bond Yields And The Expectation For The Direction of Long-Term Yields • “We feel that yields at the end of the reporting period may reflect excessive pessimism in many developed economies, in effect pricing in a recession along with the increased risks in Europe. While Europe is likely either teetering on the brink or already in recession, at this point we feel that the U.S. is maintaining a moderate growth pace. A North American recession does not appear imminent, although a spillover of Europe’s problems coupled with a contractionary fiscal policy in the U.S. could put growth in jeopardy at some point next year. As a result, after the substantial decline in yields over the third quarter, we anticipate volatility to continue, but believe that the moves may be less significant in the coming months.” – Acuity Investment Management Inc.

34. On North America vs. Europe vs. The Emerging Markets • “There are opportunities everywhere. We are looking in Europe as those markets have been amongst the world’s weakest performing. We are exposed to emerging markets directly through Samsung Electronics and through large multinational companies such as Carrefour SA and Honda Motors, both of which have business units in emerging market economies. Risk is reduced through buying companies which are trading at significant discounts to their net asset value.” – Mackenzie Cundill Investment Management Inc. • “We continue to favour North American equities over European equities as sovereign debt concerns overhang European markets and its banks. The North American fiscal and political situation is a concern. U.S. economic prospects will remain uncertain as consumers are cautious in light of ongoing weakness in the housing sector. Growth in the emerging markets is slowing, but we expect that it will likely outperform Europe and North America. Our mandate is 100% Canadian equities.” – Montrusco Bolton Investments Inc.

35. On North America vs. Europe vs. The Emerging Markets • “It is our belief that the growth in Asia is real. From our perspective, the global recession only helped to accelerate what was already a gradual shift in the economic engine of the world. Further, it seems that the forces that drive the global ‘two-speed’ economy are structural in nature. This suggests to us that this is a theme that is likely to continue into the long-term and should underlie future outlooks for quite some time.” – Mawer Investment Management Ltd. • “Overall, our view is that there are enough vested interests aligned at the table to avoid a full-fledged European banking crisis. But avoiding this fate will not be easy and the European leaders must avoid any significant missteps. We do hope that the leaders attempt to deal with the issues now, as opposed to later, as has been their policy over the last year. We would note, however, that we expect investor sentiment to be highly volatile throughout this process and for as long as there remains uncertainty.” – Mawer Investment Management Ltd.

36. On North America vs. Europe vs. The Emerging Markets • “We remain concerned about the near term prospects for capital markets due primarily to the challenges confronting Europe. A speedy resolution does not appear to be at hand given the meaningful political and financial complexities European policy makers face, although they are gradually making progress.” – Acuity Investment Management Inc. • “While Europe is likely either teetering on the brink or already in recession, at this point we feel that the U.S. is maintaining a moderate growth pace. A North American recession does not appear imminent, although a spillover of Europe’s problems coupled with a contractionary fiscal policy in the U.S. could put growth in jeopardy at some point next year.” – Acuity Investment Management Inc. • “Global risks are at a heightened level. Our current expectation is for an outright economic contraction in Europe, while the probability of a recession in North America is maintained at 50%.” – Thornmark Asset Management Inc.

37. On North America vs. Europe vs. The Emerging Markets • “We believe modest growth will continue in North America as it will take years for consumers to reduce debt loads. The situation in Europe is disconcerting and the status of their monetary union is very much in question. Though mindful of a sentiment driven shift in stock prices that could occur from further disruption in Europe, we feel the cash flow, earnings, and dividends of the companies we own are fairly well insulated from ramifications resulting from a European sovereign default.” – Leon Frazer & Associates Inc.

38. On Commodities • “Over the long-term, the continued strength in Energy and Commodity prices is expected to remain due to demand from the emerging economies.” – Thornmark Asset Management Inc. • “It would appear the formula for a stronger gold price has some negative sentiment, but just not too much. These conditions make investing in gold stocks difficult and unpredictable.” – Howson Tattersall Investment Counsel

39. On Market Volatility • “We expect market volatility to remain elevated as investors grapple with the economic situation. For long-term investors, though, equity valuations appear attractive at current prices.” – Mawer Investment Management Ltd. • “Volatility creates opportunity for us, and we look to buy companies which have significant discounts to their NAV. While we do not forecast, it is fair to say that volatility will remain until there is clarity around economic and fiscal issues in Europe and the U.S.” – Mackenzie Cundill Investment Management Inc. • “We are constructive on the prospects for equity markets over the next year, but history shows us that stocks can overshoot on the downside during bear markets.” – Picton Mahoney Asset Management

40. On The Recovery • “Over the past twelve months, both Europe and the U.S. have struggled to bring a self-sustaining recovery to life and to overcome the hurdles that were presented to them in the last crisis. We see little changing over the next twelve months. If anything, the recovery should continue to improve… Companies now have a higher proportion of cash on their balance sheet than anytime in the past 50 years. Earnings and earnings momentum have also improved over the last year and the U.S. banking system appears both better capitalized and more stable. On the other hand, while corporations are flush with cash, they are still doing little with it. ” – Mawer Investment Management Ltd. • “We feel that despite the near term risks, corporate balance sheets remain strong and expect them to outperform government bonds over the mid- to long-term.” – Acuity Investment Management Inc. • “Stability in credit markets will be the precursor to any significant rally. We continue to believe that any stock market rally will be in the context of a longer term trading range.” – Picton Mahoney Asset Management Inc.

41. 3. Review of Counsel Investment Solutions

42. Counsel Balanced Portfolio * Target asset allocation weights adjusted following annual review of Counsel portfolios and with the renewal of the simplified prospectus on October 26, 2011. This Portfolio is managed using a multi-manager process. The current sub-advisor or underlying mutual fund managerfor each mandate is listed beside the mandate for which it provides portfolio management / sub-advisory services. This Portfolio invests in underlying mutual funds (which may be managed by Counsel) currently sub-advised by the sub-advisors listed beside each investment mandate. For information on the underlying funds, please refer to the prospectus, which is available on our website at www.counselservices.com or on the SEDAR website at www.sedar.com.

43. Counsel Balanced Portfolio Effective Top 10 Sector Allocation Effective Asset Class Mix Effective Geographic Mix

44. Counsel Balanced Portfolio Positive and negative attribution for Q3 2011 Positive and negative attribution for the 12 months ended September 30, 2011 + Positive attribution to overall Portfolio, reflecting that the mandate outperformed its relative benchmark on a gross returns basis. - Negative attribution to overall Portfolio, reflecting that the mandate underperformed its relative benchmark on a gross returns basis.

45. Counsel Balanced Portfolio:2010 Annual Distributions

46. Counsel Short Term Bond Effective Investment Mix Effective Bond Maturity

47. Counsel Short Term Bond

48. Counsel Short Term Bond:2010 Annual Distributions

49. Counsel Fixed Income Effective Investment Mix Effective Bond Maturity

50. Fixed Income