Tiburon Strategic Advisors, a market research & strategy consulting firm serving a wide variety of financial institutions and investment managers, hosts a series of client-only CEO conferences called the Tiburon CEO Summits. Tiburon CEO Summit XVIII was held this week in New York, NY. Over 150 senior industry executives took two days out of their busy schedules to participate. Tiburon Managing Principal Chip Roame opened CEO Summit XVIII by presenting on the State of the Financial Services Industry. Tiburon CEO Summit XVII Welcome, Brief Introductions, & Agenda Highlights Mr. Roame welcomed Tiburon CEO Summit XVIII attendees, provided a brief introduction of the firm and the vision behind the CEO Summits, & then highlighted the agenda for Tiburon CEO Summit XVIII: Tiburon Strategic Advisors maintains a focus on corporate-level strategy: Serve senior executives only at financial services companies Key services: strategy consulting, market research, & market seminars Publish series of 62 off-the-shelf research reports ($5,000 each; $25,000 for access to all reports for all employees for one year) Host semi-annual Tiburon CEO Summits According to Tiburon CEO Summit attendee feedback forms collected, the most recent Tiburon CEO Summit (XVII) scored a record-high 9.2 out of 10.0 on overall satisfaction, with one speaker, Pete Kight of Fiserv Corporation, tying the all-time high score of 9.3 out of 10.0 Tiburon CEO Summit XVIII included a White House Briefing Room style media facility Tiburon CEO Summit XVIII had 16 sessions, including Chip Roame's Tiburon presentations, seven guest speakers, a choice of five break-out sessions, three general session panels, & two terrific social events Tiburon CEO Summit XVIII had 160 confirmed client attendees, with over one-third of them being first time attendees Tiburon CEO Summit XVIII had 12 past & future speakers in attendance The Future of Advice: Top Five Themes from Tiburon Client Project Requests Mr. Roame then provided a backdrop for his Future of Advice opening keynote presentation by highlighting recent client project request topics, including significant consumer changes, a new regulatory regime, accelerating product & channel shifts, a return to tactical basics, & abundant financial services investment opportunities: Significant Consumer Changes Consumer household net worth fell $11.5 trillion in 2008 to $51.5 trillion before recovering partially to $54.2 trillion in 2009 Consumer household net worth increased to $54 trillion due to an increase of $2 trillion in investable & retirement plan assets Consumer households’ equity in their homes fell to 38% in 2009, the lowest level since records have been kept The number of consumer households with over $1.0 million net worth dropped 27% in 2008 but recovered to 7.8 million in 2009 The US personal savings rate has been decreasing in recent years, but increased to 2.9% in 2008, 4.3% in 2009, and 6.0% in early 2010, as consumers have become more conservative New Regulatory Regime Health care reform Financial services reform Systemic risk Three-tier bank regulation Consumer Financial Protection Agency Derivatives regulation Broker/dealer & RIA harmonization Fiduciary issue Role of non-fiduciary commission salesman SEC support? Accelerating Product & Channel Shifts Products shifts worth watching include those in mutual funds, bonds & bond mutual funds, target date mutual funds (alive and well), indexing, ETfs, non-correlated strategies (hedge funds), & guarantees. Specifically, details include: Mutual funds had a 52 week streak of net inflows, topping out at $54 billion in last month Bond mutual funds dominated inflows in 2009, taking in over $400 billion, while money market funds had outflows of $300 billion Traditional long-only active high-fee investing strategies may give way to investing in etfs & low cost mutual funds, guaranteed products, & hedge funds & hedge fund like products Exchange traded fund assets declined from $608 billion to $578 billion in 2008 but rebounded in 2009 to $782 billion Hedge fund assets fell to $1.3 trillion in 2008 but recovered to surpass their 2007 high, now at $1.9 trillion Channel shifts worth watching include those amongst financial advisors (wirehouses, break-away brokers, independent broker/dealers, & fee-based financial advisors (RIAs)), institutional markets, & international markets. Specifically, details include: Perspective is required regarding the rush of break-away brokers… A $200 billion move would boost the independent advisors market by 10% Traditional full-service brokerage firms & banks are losing share to independent financial advisors & discount brokers Return to Tactical Basics FSI/FA Sales & Marketing (client service) Retention Aging clients Client referrals FSI/FA Staffing & Compensation 325,000 financial services industry job losses Compensation rules for TARP players Hedge fund compensation Employee morale FSI/FA Technology & Outsourcing Rapidly changing technology Technology outsourcing One financial advisor recognized the importance of client communications Many financial advisors have event built their businesses around outsourcing models Abundant Financial Services Investment Opportunities) FSI M&A Amazing FDIC assisted deals for private equity funds Insurance companies Mutual fund companies FA M&A RIAs & IBD reps aging Employee economics do not work for large firms Lift outs FSI Private Equity Lack of debt FSI IPOs Coming soon Retail banks will be the most aggressive acquirers because they are the largest institutions… Five financial services institutions collectively raised $22 billion, showing that the IPO market is opening up, especially in Asia! For information on how to become a Tiburon CEO Summit attendee, please visit the CEO Summits page on Tiburon's web site or contact Sarah Sage at SSage@TiburonAdvisors.Com or 415-789-2540.