The 2010 fi360 Conference is now underway. After opening remarks from fi360 executives and friends and partners of fi360, former Secretary of Treasury Paul O'Neill began his presentation on government spending and personal accountability. We'll be doing live blogging throughout the day. During the sessions, we'll post some of the best comments as a continuation of this post. If you are on Twitter, you also can follow the action from us @Fiduciary360 as well as other live attendees. Search for the hashtag #fi360_2010 to get the latest updates.
Update 5:15: Day one is in the books. Geoff Davey just wrapped up his session on risk tolerance, saying, "Assessing client risk includes tolerance, capacity, and need." Sunny Loveland gave his presentation on the CFP Board Code of Ethics and acting like a fiduciary. There is a networking reception tonight, with one more full day of sessions tomorrow. We'll be live blogging again, so check in throughout the day.
Investment Advisor magazine has a nice write up on this morning's session with Paul O'Neill.
Update 4:45 p.m.: Brian Graff giving an update on the latest DC developments affecting advisors, including disclosure, advice regs, reform bill and more. Says it is important not to stifle qualified advisors.
Update 4:35 p.m.: Last breakout sessions of day one just started. Brian Graff, Josh Itzoe, Geoff Davey, and Sunny Loveland all speaking.
Josh's presentation is on pre-allocated portfolios. Says consideration of your firm's structure, services, fiduciary status, investment strategy, communications all have weight in deciding to build models.
Click the link below to read all previous updates from today.
Update 3:15 p.m.: Brian Hamburger going over investment advice regulations. Comparing House and Senate reform bills. Says some states are not ready to take over increased RIA registrations that would come with increased AUM thresholds for federal registration. Believes this would create pockets of unregulated areas in those states.
Going through the fiduciary positions of SEC Commissioners, SIFMA, Financial Planning Coalition and FINRA. Says "harmonization" is a buzz word to look out for.
Update 2:55 p.m.: Jason Roberts and Gary Sutherland having an open discussion on ERISA bonding. Going over the different types of fiduciary functions, the associated liability and insurance products that cover them. Just pointed out that acknowledging fiduciary status isn't a requisite to having fiduciary status.
Update 1:55 p.m.: Fred Reish is talking fees and expenses. Says fees are the biggest issue in the industry and that the trend is towards full disclosure at both plan and participant levels. Good advisors will be a part of the benchmarking process with the plan sponsor. Says fee benchmarking generally will and should be quantitative, but qualitative benchmarking can justify higher fees that come with more and better services.
Update 1:40 p.m.: Lunch is over, afternoon breakouts are underway. Greg Kasten is speaking on participant level fiduciary best practices. Says fifty times more is spent on something that doesn't exist (alpha) than on what can have an impact on benefit adequacy (education).
Update 11:42 a.m.: Tess Malone is speaking on stable value investments. Speaking on the importance of thorough due diligence, monitoring and client communication due to the complexity.Tess Malone: "Good people, given good information, make good choices."
Update 11:13 a.m.: Scott Simon, Gary Allen and Jeff Coontz of Prudent Investor Advisors are discussing how advisors can succeed in the changing retirement plan marketplace and the various business models available.
Gary Allen is talking about the careful consideration necessary in choosing the business model that works for individual advisors and the strengths, weaknesses, opportunities and threats associated with each of them in the retirement plan marketplace.
Update 10:48 a.m.: Breakout sessions are starting. Drs. David Esch and Johann Klaassen are beginning with possibly the most complex session we have this year, "Non-normal distributions, portfolio construction and client communication." Dr. Esch is summarizing his paper, Non-normal facts and fallacies, which is available of the website of his company, New Frontier Advisors.
Dr. Esch: "Statistical models should explain as many interesting aspects of variation as possible, not the error, especially for forecasting."
Dr. Klaassen will soon be following up with a summary of his paper, "Black Swans and Fat Tails: New Mathematical Descriptions of Investment Risk."
Update 10:00 a.m.: Day one's general session speaker, Paul O'Neill spoke on government issues, including inefficiencies, poor documentation and standardization of procedures, out of control spending and debt and related those issues to how advisors and other fiduciaries in the audience can make a difference through elevating their own practices and considering the best interests of their clients.
On financial regulatory reform, we need to make changes
that will ensure the system is not threatened even though malfeasance
exists. His ideal financial reform bill would have two pages: (1) 20% equity down payment
required for all mortgages, (2) parallel reserves required for all
financial transactions. When thinking of reform, we also need to
protect consumers from both malfactors and themselves.
In response to whether we have the political will to make the hard
choices to turn the train around: at the federal level, we can't make
hard choices until the president and other government officials tell
people the things they don't want to hear and stick to telling the
truth.
My hope comes from gatherings like this. I find it impressive that 450 individuals
would assemble to discuss fiduciary issues. Real hope in our society
are individuals. If we can get individuals to act in a fiduciary way in
all their dealings, it would make a significant impact.
Update 9:13 a.m. EDT: The opening session had fi360 CEO Blaine Aikin, COO Rich Lynch, CEFEX director Carlos Panksep, Committee for the Fiduciary Standard head Knut Rostad and Wealth Manager editor in chief Kate McBride all making remarks. Also featured was 2010 Article Competition winner Andy Rice, who collected his $1,000 prize for his article on Roth Conversions. The article can be found on the article competition page of our site.
Some of the highlights:
Blaine, on the state of the industry, saying professional organizations are pushing forward fiduciary standards by acknowledging in their codes of conduct that technical competence is not enough, understanding and adhering to fiduciary standards are critical to the professionalization of investment advice. He also acknowledged that many in the b/d and insurance segments of the industry are adhering to fiduciary ethics, even when their companies may not allow them to accept responsibility, financial reform looks promising and the popular press is finally understanding the importance of the issue.
Blaine on the Committee for the Fiduciary Standard, saying that the progress of the group has exceeded their expectations, "We weren't carrying lobbyist dollars, we were carrying a message and I think it is a message that can win."
Rich gave updates on developments within fi360, Knut acknowledged the steering group of the Committee and gave an update on their progress, Carlos spoke on the importance of independent, third party audits as his company does on fiduciary processes, and Kate McBride announced the new partnership with fi360 on the 2011 Article Competition and other initiatives that we'll announce soon.
Finally, we announced that the 2011 Conference will be in San Antonio, TX on May 4-6, 2011.
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