Prior CEO Summits 2001-2004

Tiburon held its first seven semi-annual Tiburon CEO Summits from 2001 through 2004. These Tiburon CEO Summits took place in four beautiful Northern Californian cities, including Saint Helena (Napa Valley), Tiburon, Mill Valley, & San Francisco. Due to the unique forum for open debate regarding current opportunities and issues in the financial services industry, interest in Tiburon's CEO Summits has grown quickly from nine attendees in 2001 to the packed houses and waiting lists that now exist. Click here for summaries of the more recent Tiburon CEO Summits.

Tiburon CEO Summit VII was held October 21-22, 2004 in San Francisco, CA. The Summit started at 8:00am on Thursday, October 21, included a networking dinner that evening in Tiburon, & concluded at 12:30pm on Friday, October 22. Over 75 senior industry executives & media representatives took two days out of their busy schedules to participate. Chip Roame (Managing Principal, Tiburon Strategic Advisors), Bill Hambrecht (CEO, WR Hambrecht + Company and Former CEO, Hambrecht & Quist), Mark Lopez (Managing Director, LPL Financial Services), Cameron Miller (Principal, Lovell Minnick Partners), & Morgan White (Managing Director, Woodside Asset Management, Silicon Valley Bank) made general session presentations. Other sessions included an advisor panel, a consumer panel, a strategic discussion of the investment management market, & a series of presentations on innovative business models.

Also in attendance for Tiburon CEO Summit VII were Tiburon employees Kristen Colwell (Marketing Manager), Servio Lee (Research Manager), Jeff Nagy (Research Manager), & Yari Wajid (Research Manager).

The following summary was distributed after the seventh semi-annual Tiburon CEO Summit:

Tiburon Strategic Advisors, a market research & strategy consulting firm serving the brokerage and investment management industry, held its Seventh Semi-Annual Tiburon CEO Summit last week in San Francisco, CA. Tiburon's CEO Summits have become a leading-edge forum for industry CEOs and other senior executives to gather and debate the future of the brokerage, investments, advice, and wealth management industries. Tiburon's research serves as the foundation of the meetings and all participants share views openly. To facilitate information sharing, Tiburon provides a summary like this one after each CEO Summit.

Tiburon’s Seventh Semi-Annual CEO Summit was held in San Francisco, CA on October 21-22, 2004. Eighty-three senior industry executives and consultants were present. Chip Roame of Tiburon Strategic Advisors, Bill Hambrecht of WR Hambrecht & Company, Mark Lopez of LPL Financial Services, Morgan White of Woodside Asset Management, and Cameron Miller of Lovell Minnick Partners made general session presentations. Other sessions included an advisor panel, a consumer panel, a strategic discussion of the investment management market, and a series of presentations on innovative business models.

Tiburon’s CEO Summits have four unique features:

The senior level status of all attendees; Tiburon seeks to include the leading strategy maker from each client company
The cross-industry characteristics of the attendees; Tiburon seeks to bring clients from related markets together to discuss common industry issues
The requirement of participation; all attendees are required to participate in presenting, serving as panelists, or facilitating break-out sessions, in an attempt to create open communications and wide-ranging debates
The lack of commercialization; Tiburon CEO Summits allow for open discussion without the presence of industry vendors and sales pitches

Tiburon CEO Summits have come to support two central themes:

The primary focus on consumer needs. Every Tiburon CEO Summit has included the popular Ask the Consumers and Ask the Advisors panel discussions to allow direct open dialog with real clients. General session presenters such as Tiburon's own Chip Roame (a die hard consumer-oriented consultant) and behavioral finance experts have fostered this focus
The related focus on consumer-centric innovative business models. Every Tiburon CEO Summit has included the Innovative Business Models panel and two individual innovative business model personations. Recent presentations by Bill Hambrecht (WR Hambrecht & Company), Mark Lopez (LPL Financial Services), Ken Kam (Marketocracy), Jeff Montgomery (NFP Securities), and Scott Hanson (Hanson McClain Retirement Network) have supported this theme

Opening General Session Presentations

The CEO Summit kicked off with a general session presentation by Chip Roame of Tiburon Strategic Advisors and a guest presentation by Bill Hambrecht founder of both WR Hambrecht & Company and Hambrecht & Quist. Chip addressed the state of the financial services industry, with a focus on evolving consumer needs and emerging innovative business models. Bill addressed the history and future of the investments industry, along with an insightful look into the Dutch Auction process implemented by his firm, and the newsworthy Google IPO that his firm led.

Chip Roame (Managing Principal, Tiburon Strategic Advisors)

Chip Roame welcomed the attendees, gave an overview of Tiburon, and addressed the state of the financial services industry. In updating the group of clients on Tiburon’s activities, Mr. Roame noted that, “Tiburon has positioned itself uniquely as a market research & strategy consulting firm; the firm’s services include a series of research reports, conference speeches, market seminars, market research services, and strategy consulting services, with the latter two accounting for more than half of Tiburon’s revenues.”

Tiburon Managing Principal Chip Roame delivers the opening presentation at Tiburon's Seventh Semi-Annual CEO Summit

The firm has served over 250 corporate clients and completed over 600 projects since its founding in 1998 and today, its knowledge base includes mutual funds distribution, separately managed account programs, alternative investments, wealth management services, insurance products, banking services, the fee-only financial advisor market, the CPA firms market, the family office market, and various international markets.

Mr. Roame also introduced other Tiburon business activities:

Tiburon holds this series of CEO Summits semi-annually. Attendance is by invitation only and is generally limited to 75 senior industry executives
Tiburon has built three executive programs (CEOs-in-Residence, Financial Advisor Roundtable, and Consulting Fellows) in an effort to bring the experiences of additional senior level industry executives to Tiburon clients. All executive program members are invited to Tiburon’s CEO Summits and are encouraged to participate in leadership roles in the CEO Summits on issues related to their respective specialties
Tiburon offers thirteen online business benchmarking tools that are available to all types of financial advisors in an effort to help them benchmark their business practices and build more successful businesses. Almost 4,000 advisors have used these tools thus far
Tiburon has published eleven ~100-300+ page research reports, which offer detailed analyses of growing business segments; each is available for $2,500
Tiburon’s weekly research releases are emailed for free to interested industry executives, media representatives, conference planners, and individual financial advisors. Over 12,000 industry executives now receive these releases each week

Mr. Roame then highlighted the agenda for this, Tiburon’s Seventh Semi-Annual CEO Summit, and discussed highlights of past CEO Summits, including the consumer and innovative business models panels, the state of the industry speeches, and the popular product & market break-out sessions.

After sharing the short update on Tiburon and addressing the CEO Summit agenda, Mr. Roame discussed the state of the financial services industry broadly. This included comments on short-term challenges, consumer wealth, the competitive playing field, and ways to win in the increasingly competitive market. Specifically, Mr. Roame noted that:

The market of consumer wealth is enormous, including $17.1 trillion of investable assets and $7.5 trillion of retirement plan assets held by the 108 million US households. Mr. Roame predicted that, "the $17.1 trillion will increase to over $30 trillion by 2010 due to the pending liquefaction of consumer wealth, making it a great time to be in the financial advice business"
The competitive playing field is crowded with over 400,000 financial advisors. Mr. Roame noted that, “banks and full-service brokerage firms currently dominate these assets, each controlling nearly $6 trillion.” He went on though to suggest that, “independent advisors may gain substantial share in the 2000s much as full-service brokers did in the 1980s and discount brokers did in the 1990s”
Finally, Mr. Roame noted a series of ways to win, including, “not giving up on mutual funds, participating in the fee-accounts trend, and expanding product & service offers to better address the needs of aging baby boomers.” He predicted that wealth management services may pass investment management services in importance as boomers age, and that target market strategies may be increasingly critical to success

Bill Hambrecht (Founder & Former CEO, Hambrecht & Quist and Founder & CEO, WR Hambrecht & Company)

Bill Hambrecht and Clay Corbas from WR Hambrecht & Company presented a historical and future look at the investments industry, Google, and the Dutch Auction process. Kevin Malone of Greenrock Research introduced Mr. Hambrecht by calling him, "not only one of the great thought leaders in the investments business in the second half of the twentieth century, but also one of its most innovative leaders during this time.”

Mr. Hambrecht reviewed the history of his previous firm, Hambrecht & Quist, which was started by himself and George Quist in 1968 to provide investment banking to companies in Silicon Valley. The growth of technology stocks in the 1980s was the catalyst for Hambrecht & Quist becoming a substantial investment banking, brokerage, and venture capital firm.

The experience of bringing his own firm public in 1996 caused Mr. Hambrecht to question the IPO process. Hambrecht & Quist had several institutional investors interested in purchasing stock of its IPO; however, none of these firms were large Wall Street brokerage firms. Most of these firms did not receive the amount of stock they desired. Over time, he followed these investors and discovered eighteen months later that these firms still owned 50% of their stock purchases, while the large Wall Street firms owned none. He concluded that Wall Street, not potential long-term investors of Hambrecht & Quist, controlled its distribution of stock.		Bill Hambrecht, founder of WR Hambrecht & Company and Hambrecht & Quist, presents at Tiburon's Seventh Semi-Annual CEO Summit
Bill Hambrecht left Hambrecht & Quist in 1998 to start WR Hambrecht & Company, in an attempt to change the IPO process. Since 1998, WR Hambrecht & Company has completed eleven IPOs using a Dutch Auction process, that is, a method that publicly collects bids on IPOs through the Internet to determine the final price. All of the subscribers pay the same price, and Mr. Hambrecht believes that the final price is more efficient.

In fact, Google used this method for its IPO. Google was interested in distributing stock to its users, but the traditional Wall Street IPO method would have eliminated these common investors from participation. Mr. Hambrecht believes that the Dutch Auction process allowed Google to receive a higher price on its offering, and Google investors were able to own shares at the offering price, instead of 25% higher where the stock traded after the offering.

Clay Corbas, a senior managing director of WR Hambrecht & Company, took the group through a review of an actual Dutch Auction process. Kevin Malone summed up the presentation by predicting that the influence of internet-based Dutch Auctions would become pervasive in future IPOs. Tiburon Managing Principal Chip Roame applauded Mr. Hambrecht's efforts saying, "few industry executives bring the consumer-centric passion that Bill Hambrecht displays. The industry should be proud of Bill Hambrecht."

General Session Panel Discussions

Four general session panel discussions were held, including the popular Ask the Consumers and Ask the Advisors panels, as well as a panel on opportunities in the investment management & institutional markets, and a panel on innovative business models. All four panels included wide-open dialogue and received wide praise.

Ask the Consumers

Back by popular demand after repeated comments seeking a better understanding of consumer needs, the Ask the Consumers panel drew wide praise. Four high net worth consumers joined financial advisor facilitators Tif Joyce from Joyce Financial Management and Joe Kiely from Kiely Financial Services, and told about their experiences with brokers, bankers, and advisors. The key take-away was that there seemed to be a divergence between extremely happy clients and frustrated & confused clients. Mr. Joyce observed that "the client is happiest when there is a strong relationship with the financial advisor."

Ask the Advisors

Six financial advisors participated on a panel to allow attendees to better understand advisor decision-making. Participants included Janet Brown from DAL Investment Company, Jane Everingham from Everingham & O'Malley, Tif Joyce from Joyce Financial Management, Joe Kiely from Kiely Financial Services, Jeff Lancaster from Bingham, Osborn, & Scarborough, and Kirk Michie from Osborne Partners. Chip Roame from Tiburon Strategic Advisors facilitated the session.

All seemed to agree that financial advisors appear to be more focused on the consumer, whereas other parts of the industry are more focused on products and services. As Joe Kiely summed up, "the industry is interested in products, the client is interested in service."

Opportunities & Issues in the Investment Management & Institutional Markets

Kevin Malone, from Greenrock Research, Frank Maiorano from Nuveen Investments, Dick Saalfeld from Axa Investment Management, and Mitch Nichter & Greg Pusch from Paul Hastings gave a brief presentation on their views of opportunities and issues in the investment management markets, including the impact of the mutual funds regulatory environment. Mr. Malone noted, "while the shadow of the mutual funds scandal hangs over all of us, the integrity of the investments industry has been verified."

Kevin Malone of Greenrock Research describes opportunities in the investment management market at Tiburon's Seventh Semi-Annual CEO Summit

Mr. Nichter discussed the impact of recent mutual funds scandals as well as the impact of recently enacted regulations affecting the investment management industry, with particular emphasis on the likely changes in the areas of mutual funds and advisors who use mutual funds.

Mr. Nichter suggested that in the short-run, it will be expensive for advisors to meet many of the new regulatory requirements and that there may be changes in and greater disclosure concerning reciprocal payments among industry participants. However, he concluded that the long-run effects will leave the industry strong and healthy, and that US investors will continue to want and need safe, easy-to-understand, pooled investment vehicles, like mutual funds, and will continue to seek out professional advisors to assist them in their wealth management.

Mr. Pusch also noted:

US investment models are positioned to become global investment models as the residents of developed economies such as France and emerging economies like China seek access to more investment options
The investments industry is experiencing positive change from greater competition within the industry and the development of more efficient products and more efficient markets. He estimated that these developments were as much the catalysts for change as the government enforcement actions and regulations

Mr. Malone then transitioned to a discussion of the general health of the institutional investment management business. Mr. Saalfeld outlined his keys to success in the institutional investments business with the weight for each; he assigned the largest weights to competitive investment performance (25%) and distribution partnerships (20%). All other factors ranged in importance from 5% to 10% each.

Mr. Maiorano discussed his views on the second of Mr. Saalfeld's points - specifically, on the role of marketing in the institutional business. He stressed the need for client-centered marketing solutions. Industry participants applauded this session as a terrific top-down look at the opportunities and issues for investment management organizations.

Innovative Business Models

Finally, six Tiburon clients joined Tiburon's Chip Roame in a general session panel to discuss their respective innovative business models. Panelists included financial advisors Ken Schapiro (Condor Capital Management) and Vince Birley (Ron Blue & Company), market participants Tom Bradley (TD Waterhouse) and Jeff Montgomery (National Financial Partners), and product executives Greg Vigrass (Foliofn) and Craig Litman (Litman Gregory Asset Management).

One of the most interesting models was the diversification of Craig Litman's investment advisory business, which manages $1.8 billion in client assets. Litman Gregory has developed a separate business to assist other advisory firms - some of which are direct competitors. The firm has opened its business to sharing best practices, templates, research, and model portfolios by offering a subscription to Advisor Intelligence to over 1,000 other advisory firms. In addition, Litman Gregory offers more mutual fund research through the Litman Gregory No Load Fund Analyst and also offers its research implemented in a series of mutual funds hiring best-of-breed stock pickers. Another interesting fact came from Tom Bradley who said that advisors now account for 62% of the net asset flows at TD Waterhouse.

Product Break-Out Sessions

Product break-out sessions were held on mutual funds & exchange traded funds; fee-accounts, turnkey asset management programs, & separately managed accounts; hedge funds, venture capital & private equity, real estate, & other alternative investments; and wealth management & family office services.

Mutual Funds & Exchange Traded Funds

Andy Arenberg from Barclays Global Investors, Christopher Lanzafame from Franklin Templeton, Keith Mitchell from Mitchell Advisors, Mitch Nichter from Paul Hastings, and Greg Pusch also from Paul Hastings led a discussion on key trends in the mutual funds and exchange traded funds marketplace.

Despite rapid growth in assets, Mr. Arenberg stated that a significant percentage of financial advisors were either not aware of exchange traded funds or how they might be used within their clients' portfolios. The conversation turned to the development of actively managed ETFs and Mr. Pusch commented that several questions remain about their viability or acceptance in the marketplace. The issue of potentially trading at discounts to net asset value, as has been the case with closed-ended mutual funds for example, was one of the unanswered questions.

Dennis Clark of Advisor Partners begins the discussion in the mutual funds & ETFs break-out session at Tiburon's Seventh Semi-Annual CEO Summit

Many of the attendees mentioned the impact of ETFs within their own wealth management practices, including ways in which ETFs add value to client portfolios. The group seemed to agree that by using ETFs to fill certain asset classes and sectors, advisors are able to seek other products and services to increase overall return or minimize tax liabilities for their clients.

As the discussion transitioned to the mutual funds industry, Mr. Lanzafame said that his firm and others are seeking to focus distribution and product development efforts toward registered investment advisors, as well as continuing to seek distribution outside the US. Many felt that the mutual funds industry was still seeking its footing within the new regulatory environment.

Mr. Mitchell stated that "the number of large mutual fund groups that are continuing to operate with business strategies oriented to the environment of the 1980s and 1990s is a key issue." He suggested that with increased competition from ETFs, separately managed accounts, and alternative products, mutual fund companies need to sharpen their focus on core competencies. Mr. Mitchell observed that "there is a creaking sound in the mutual funds industry today and it is emanating from the old approaches that are failing to work in this new environment. Many are facing financial pressures that will lead them to decisions that will result in smaller, more nimble offerings."

The group then discussed absolute returns, which continue to be a hot topic. Andrew Rudd from Advisor Software commented that "there is a key distinction in the investment decisions required to meet the needs of individual investors versus those of institutions." The longer time horizons of endowments, pension plans, and foundations allow them to think in more relative return terms, where individuals often face more finite horizons and tend to focus on absolute terms. The ability to deliver hedge fund results to smaller investors is still a point of debate and many attendees felt the risk/return equation could be diluted with the higher costs associated with more retail-oriented product approaches.

Fee-Accounts, Turnkey Asset Management Programs, & Separately Managed Accounts

Dennis Clark from Advisor Partners, Kevin Malone from Greenrock Research, and Barry Mendelson from Capital Markets Consultants facilitated the discussion in the fee-accounts, TAMPs, & SMAs break-out session from the perspectives of separately managed account providers, investment research providers, and program sponsors.

Tiburon Managing Principal Chip Roame clarifies a point during the fee-accounts, TAMPs, & SMAs break-out session at Tiburon's Seventh Semi-Annual CEO Summit

Mr. Clark asked the audience to consider what seems to be a contradiction between the promised benefits of separately managed accounts - customization and tax management - and what is actually being sold and delivered. The conclusion was that wirehouse brokers are selling separately managed accounts as a product and that they are responsible for at least 85% of separately managed account assets (Tiburon data supports this conclusion).

The group also made the observation that while fee-only financial advisors are slow in adoption, these independent advisors are in the best position to implement the promised benefits of separately managed accounts as a solution versus a product. Mr. Malone discussed the importance of investment manager research in fee-based programs, including the analysis of portfolios, attribution of investment returns, and organizational character underlying investment performance.

Mr. Mendelson provided practical advice for institutional sponsors like brokerage firms, banks, insurance companies, and RIA firms in launching and maintaining fee-based investment programs. He discussed the importance of strategic planning in the development of these programs, and noted “too many players have jumped into the fee-accounts arena in the last ten years without a game plan, a brand strategy, or an approach that is integrated with their overall corporate objectives. Because branding intends to produce a specific consumer experience, every aspect of fee-account programs needs careful attention, including program naming, asset allocation advice, product selection, investment research, performance reporting, advisor training, and so forth.” The goal he said, "is to strive for consistency throughout the entire process that produces and maintains these programs.”

Hedge Funds, Venture Capital & Private Equity, Real Estate, & Other Alternative Investments

Kevin Malone of Greenrock Research facilitated the hedge funds, venture capital & private equity, real estate, & other alternative investments break-out session, and Tim Armour from Morningstar, Ron Suber from Bear Stearns & Company, and Jeremy Evnine from Evnine-Vaughn Associates addressed the group. Attendees at this session expressed appreciation for the thorough discussion of the hedge funds industry. Mr. Malone began by defining hedge funds in two ways: one being a hedge or balance against another investment, and the other being an investment company that typically charges an incentive fee. Mr. Malone noted that the growth of hedge funds has been directly related to the second definition.

Mr. Armour addressed the group with a presentation on hedge fund opportunities from Morningstar's perspective. Morningstar estimates that the hedge funds industry is made up of approximately 11,000 funds with $1 trillion assets under management (Tiburon data generally supports these conclusions). He also noted that currently $10 billion is invested in investable hedge fund indices offered by the likes of S&P and MSCI.

Mr. Suber addressed the group on the practical realities of hedge funds and warned the attendees that, "your clients want and/or need hedge funds or funds-of-funds based on asset allocation or competition." He also advised that, "the growth of hedge funds is here to stay." Mr. Suber took the group through the life cycle of hedge funds, which included the start-up phase, the growth phase, and the maturity phase. He suggested looking for hedge funds in the growth phase of their businesses.

Mr. Suber and Mr. Malone then interviewed Mr. Evnine, CEO of Evnine-Vaughn Associates. Mr. Evnine described his investment process, which attempts to uncover abnormal relationships between two variables, in this case stocks. By shorting one stock and buying the other stock, Evnine-Vaughn Associates waits for the relationship to normalize. The time horizons of these trades are eight-to-ten days, so turnover is very high. Diversification is also extremely high, with hundreds of trades occurring weekly. When asked to compare his knowledge of any particular company to that of an active traditional investment manager, Mr. Evnine speculated that traditional managers might need more fundamental information on firms prior to investing.

Wealth Management & Family Office Services

In the wealth management & family office services break-out session, Brent Hicks from Focus Financial Partners, Jeff Roush from CEG Worldwide, Kevin Rowell from Charles Schwab & Company, and Yari Wajid from Tiburon Strategic Advisors led a dynamic dialogue on identifying and responding to consumers' non-investment needs.

Mr. Roush drove the discussion, focusing on the often misunderstood family office market. He noted that family office services are made up of highly specialized highly complex offerings intended for exceptionally wealthy clients, and suggested that while the number of family offices will likely grow 30% by 2008, most advisors should carefully examine their resources and capabilities before entering this highly competitive niche.

Others suggested that smaller advisors should market their non-investment services as a family office for those who cannot afford a family office and outsource the necessary specialized services. Mr. Hicks added that the media is a major driver behind the rush for advisors to enter the family office services arena, and noted that many advisors now feel guilty if they are not providing these services. Mr. Rowell confirmed these experiences across the Schwab advisor client base.

Markets Break-Out Sessions

Markets break-out sessions were held on wirehouses & regional brokerage firms; banks & insurance companies; fee-only financial advisors & independent reps; and institutional markets including the 401K business.

Wirehouses & Regional Brokerage Firms

In the wirehouses & regional brokerage firms session, Evan Cooper from On Wall Street & Bank Investment Consultant, Servio Lee from Tiburon Strategic Advisors, Barry Mendelson from Capital Market Consultants, and John Tyers from Bear Stearns addressed the continuing dominance of wirehouses and the rapid evolution of the brokerage industry. Mr. Cooper noted that while the industry, and in particular the wirehouses, has most of the investment assets of US investors, the wirehouses' market share seems to be declining against the independents (Tiburon data would support this conclusion).

The session solicited active participation with a general agreement that multiple models are likely to succeed including both traditional wirehouse as well as the independents. While there continues to be a migration of advisors to independent status the wirehouses will remain formidable and ferocious competitors with national brand name recognition, significant capital to continue to evolve their offerings, and ample golden handcuffs to hang on to their biggest producers.

Attendees at the wirehouses & regional brokerage firms break-out session at Tiburon's Seventh Semi-Annual CEO Summit discuss trends in the industry

The changing nature of the wirehouse sales force was discussed. Session participants concluded that wirehouses now seem to have bifurcated sales forces with successful, entrenched, and seasoned advisors not needing to change their practices significantly towards managed accounts and other fee-based offerings, while younger advisors are taking greater advantage of the entirety of the wirehouse fee-based and wealth management offerings.

It is the younger, up-and-coming wirehouse advisors that these firms are staking their continued dominance on. Mr. Tyers noted that there is "massive convergence and therefore competition in the financial services industry and the wirehouses are tough competitors. We have enormous resources to partner with producers to help them with the needs of their high-end clients."

Mr. Mendelson noted that “the scandals over the last five years have tainted the brands of major firms on Wall Street and elsewhere in corporate America. Objectivity, independence, transparency, and full-disclosure will continue to grow in importance with the informed wealthy investor. High-end advisors will not want to be forced to carry the baggage of unneeded conflicts of interest, paying for services they do not use and indiscretions that seem to occur in other parts of their firms from time to time. If wirehouses are to retain their best advisors over time they will need to offer new and alternative financial arrangements to take away some of the allure of total independence.”

The regional firms appear to be caught in the middle, with less capital to compete and less brand recognition. If they are to survive, they will have to deliver boutique offerings and take advantage of their local appeal.

Banks & Insurance Companies

Jeff Cusack from JP Morgan, Servio Lee from Tiburon Strategic Advisors, Chuck Robinson from Northwestern Mutual, and Gordon Turnbull from Wells Fargo Bank led the break-out session on banks & insurance companies. The group debated the competitive advantages of bank & insurance companies and their likely responses. Mr. Turnbull noted some distinct advantages of banks, including their huge capital advantage. He also highlighted the challenges banks face when entering the wealth management arena saying, "banks have difficulty compensating wealth managers and bringing in new wealth managers."

Mr. Cusack presented several keys to breaking down the challenges of silos, saying that, “you can’t let one silo be a risk to another silo.” He also said that banks must ask the question, “how do you compensate and incentivize correctly?” He suggested team compensation as a possible solution.

Mr. Robinson opened the discussion regarding the difficulties for insurance companies entering the wealth management business by providing background on the evolution of insurance companies into new investments, such as annuities, which arose from the stagnation of traditional life insurance products. Mr. Robinson said that problems afflicting insurance companies that have tried to enter the wealth management arena are due to the fact that most of them are losing money and “most see the wealth management business as a cost center as opposed to a profit center”.

Some participants expected great success for banks & insurance companies; others predicted slowly diminishing positions. However, all concluded that the ability to move away from siloed structures and in particular, solving the compensation disparity, will be critical for success in creating financial services hubs at banks and insurance companies.

Fee-Only Financial Advisors & Independent Reps

In the fee-only financial advisors & independent reps break-out session, Derek Bruton from Merrill Lynch, Dennis Clark from Advisor Partners, Servio Lee from Tiburon Strategic Advisors, Mitch Vigeveno from Turning Point, and Yari Wajid from Tiburon Strategic Advisors led a stimulating discussion on the challenges and opportunities in this rapidly growing and increasingly competitive market. Mr. Clark kicked off the discussion by focusing on how to best support these two groups of advisors. Mr. Bruton and several other executives from custodial firms contributed insights on their target markets and how they structure their offerings to advisors.

On the subject of breakaway brokers, issues such as deferred compensation, the power of company cultures, and brokers' fear of (or lack of interest in) managing businesses were cited as some of the reasons brokers have stayed at wirehouses and regional brokerage firms. Mr. Vigeveno noted that younger brokers are more willing to take the independent step, but that the regulatory environment, particularly recent requirements from the NASD, is making it harder to go independent.

Institutional Markets Including the 401K Business

Ward Harris from McHenry Consulting Group, Servio Lee from Tiburon Strategic Advisors, Peter Shannahan from Shannahan & Company, and Rick Tasker from the Zenith Group led a session devoted to the past and future of the rapidly changing 401K plans market.

The session included discussions on a wide range of subjects, including distribution models, fiduciary assistance, communication & education options, and pricing alternatives. Of particular interest to the attendees was the amount of transparency in retirement plans and the impact of new legislation on fees and pricing.

Mr. Tasker shared with the group his firm's creative approaches to serving the retirement plan needs of a diverse universe of plan sponsor clients. Lois Towers from Barclays Global Investors gave the group an overview of the complexities companies face in adhering to the compliance mandates from a multitude of regulatory bodies.

Mr. Shannahan led a discussion on trends and changes in the guidance & advice area and Mr. Harris noted that the current climate offers a great opportunity for investment firms and intermediaries that serve the retirement arena to deliver what the law demands and what buyers want.

Management Break-Out Sessions

The management break-out sessions generally had smaller crowds but were sometimes quite passionate, as the issues of human resources & recruiting; technology; marketing, advertising, & public relations; and the markets & investment research were debated.

Human Resources & Recruiting

Ken George from Financial Services Resource, Peter Shannahan from Shannahan & Company, Mitch Vigeveno from Turning Point, and Yari Wajid from Tiburon Strategic Advisors led a dynamic session on a wide range of human resources & recruiting issues. Key topics included benefits coverage in the face of rapidly increasing costs, the difficulty of finding quality candidates for wealth management and wholesaler positions, the use of independent contractors, wholesaler compensation, and sabbatical policies.

Mr. George noted that many more employers today are covering the cost of benefits only for employees. Mr. Vigeveno suggested that employers look at cafeteria plans as a possible solution. Mr. Shannahan discussed the fact that lifestyle issues are becoming more important to candidates in considering new positions. Julie Allecta from Paul Hastings noted that her firm has experienced some difficulty with sabbaticals, as many employees extend their time off without pay and/or do not return to their jobs.

Technology

Ward Harris from McHenry Consulting Group, Ron LoVetri from Integrated Decision Systems, and Yari Wajid from Tiburon Strategic Advisors led a session on the application of compliance technology in financial services. Participants agreed that the pressure to stay current with regulations in the areas of anti-money laundering, trade compliance, document management & retention, and codes-of-ethics are making compliance the new technology driver.

Lois Towers from Barclays Global Investors said, “the convergence of industry regulations is resulting in more robust and rational regulations.” Mr. LoVetri noted that, “compliance solutions are no longer an afterthought and are being embedded into business processes. The tight integration allows the information to be used in other customer-facing applications such as customer service.” All participants agreed that spending on compliance related systems and infrastructure will continue to increase.

Marketing, Advertising, & Public Relations

Kristen Colwell from Tiburon Strategic Advisors, Evan Cooper from On Wall Street & Bank Investment Consultant, and Brooke Southall from Investment News facilitated a break-out session on marketing, advertising, & public relations. The session included a discussion of methods for working with the media to ensure effective public relations results, and advice on the value of brand building & positioning.

Mr. Cooper and Mr. Southall started off with an enlightening discussion on working with the media and offered specific tips for improving the effectiveness of public relations efforts. Mr. Southall noted that while journalists are always seeking content, they respond most readily to submissions that are in-line with the demands of their publication's target audience and that are news worthy. Mr. Cooper added that it is important to "think of a visual angle" for the article, whether it is a graph or chart that represents the key points.

The use of professional public relations representatives who understand the firm's business is also imperative. However, Mr. Cooper stated that public relations representatives from outside the firm "tend not to know as much about the company - they are media experts, not business experts. I want to talk to the business experts." Mr. Southall and Mr. Cooper then offered the following suggestions for being quoted more often in the industry and building a brand identity:

Become an industry expert in a specific field related to your business
Communicate with the media often; those who return calls from the media are quoted most often

The Markets & Investment Research

Kevin Malone of Greenrock Research facilitated a discussion on the markets and investment research, noting that the upcoming presidential election has generated great uncertainty, and the markets hate uncertainty. Ken Schapiro of Condor Capital Management led a discussion on the need for financial advisors to provide clients with tools for investment decisions. Mr. Schapiro's firm has developed a set of tools that allow clients to take a serious look at their investment goals and objectives, and his firm only manages assets after thoroughly reviewing clients' needs, objectives, desires, and fears. Mr. Schapiro noted that anyone can make investments, but intelligent investors need a sophisticated road map.

Brian Reid from the Investment Company Institute addressed the group on flows into and out of mutual funds. Mr. Reed noted that only 51% of fund complexes had positive cash flows in the second quarter of 2004, down from 63% in the first quarter and from 62% for all of 2003. Mr. Reid showed a chart of net new cash flows by Morningstar ratings, showing that 137% of net new cash flows went into funds rated four or five stars, while funds rated one, two, or three stars saw negative cash flows. The group found this trend disturbing, pointing out a follow the winner mentality. Mr. Malone noted that in research that analyzed investing in either the best or the worst performing fund in a group, returns were shown to be vastly higher by picking the worst performers.

Finally, Ken Kam of Marketocracy described his plans to revolutionize the investments industry by using analysts who are not traditionally trained. The firm's web site hosts 70,000 virtual funds managed by investors in every state and over 100 foreign countries. Mr. Kam selects the stocks for his m100 fund from these virtual funds. Historically, the fund has had an average of 1,200 stocks and has substantially outperformed the S&P 500 index in both 2002 and 2003. When asked why his strategy is so successful, Mr. Kam noted that by investing with ideas generated outside of Wall Street, his fund is able to take advantage of the inefficient areas of the market.

Closing General Session Presentations

The CEO Summit closed with four short general session presentations by Mark Lopez from LPL Financial Services, Morgan White from Woodside Asset Management, Cameron Miller from Lovell Minnick Partners, and Chip Roame from Tiburon Strategic Advisors.

Mark Lopez (Managing Director, LPL Financial Services)

Mark Lopez from LPL Financial Services presented a terrific case study of this leading independent broker/dealer. Mr. Lopez cited three major reasons for his firm's success:

Mark Lopez of LPL Financial Services describes his firm's business model at Tiburon's Seventh Semi-Annual CEO Summit

The firm has conducted independent research to deliver non-proprietary best-of-breed products and services
The firm has been focused on selling infrastructure and support, with no retail offering
Finally, the firm has stayed focused on the needs of advisors by asking themselves the question: What should we be doing to make the lives of our advisors better?

Morgan White (CEO, Woodside Asset Management)

Morgan White from Woodside Asset Management provided a case study for the CEO Summit’s traditional mergers & acquisitions session, having sold his financial advisory business to Silicon Valley Bank. Mr. White’s key learnings were:

Sellers should be prepared for cultural differences; combining a corporate culture and an entrepreneurial culture has challenges
Sellers should not underestimate the amount of time compliance takes in a corporate environment
Sellers should have clear written business development and cross-selling plans in place
Sellers should remember that earn-out assumptions are almost always based on retaining key contributors; therefore employee incentives are key to successful transitions

Mr. White also added that open lines of communication need to be built because changes will happen. Fast, open, and direct communications make changes easier.

Cameron Miller (Principal, Lovell Minnick Partners)

Cameron Miller from recently established Lovell Minnick Partners (formerly of Putnam Lovell) discussed his firm, the M&A environment, and the type of transactions that are being done in the current environment. He stated that there has been a huge decline in the value of deals since 2000, even though there has been an increase in the number of deals. Mr. Miller believes this has occurred due to the impact of Eliot Spitzer, Sarbone Oxley, the elections, stock prices, and geopolitical issues.

Cameron Miller of Lovell Minnick Partners describes the current state of the private equity market at Tiburon's Seventh Semi-Annual CEO Summit

The preponderance of deals being done, now, are asset management firms buying other asset management firms, and banks buying asset management firms (Tiburon data would support this conclusion). Mr. Miller said that he feels that private deals for asset managers are currently attractive because they are now being done at discounts to public multiples. Two current areas of interest for his firm are fee-based accounts and alternative investments.

Chip Roame (Managing Principal, Tiburon Strategic Advisors)

Tiburon’s Managing Principal Chip Roame closed the CEO Summit first by offering an open forum for any unaddressed industry topics. Topics that arose included identifying and preventing potential industry scandals in the future, discussing practical methods of training & retaining qualified employees, and further defining the wealth management trend. He then reminded attendees of a few key points:

Boomers are the key to the future of the financial services and investment management industry
Boomers’ financial needs will evolve towards wealth management as they age
The independent advisor markets are well positioned to pick up market share
Superficial responses such as more product choices, claiming the ethics of fee-based investing, and simply utilizing buzz words like wealth management and life planning will be meaningless

Mr. Roame closed by stating that, "understanding and addressing client needs will be the key factor driving success as boomers age. Advisors and advisory organizations will need to better target market, develop more comprehensive product & service offers, build better infrastructure, and plan for succession." He said, "the game will be won by best serving baby boomers as they age."

General Feedback

General feedback for the CEO Summit included overwhelmingly positive comments. The balance of general session speakers, general session panel discussions, & break-out sessions, the diversity of content, and the personal interaction were all frequently complimented. Some of the highlights for attendees included:

The state of the financial services industry speech by Tiburon's Chip Roame, and the parallel investment management strategies panel that offered a solid common understanding of the markets to all participants, regardless of their industry backgrounds
The guest appearance of Bill Hambrecht from WR Hambrecht & Company, and the terrific case example presentations by Mark Lopez from LPL Financial Services and Morgan White from Woodside Asset Management
The consumers panel, which highlighted the industry’s need to better understand client needs, and the advisors panel that allowed attendees to better understand the thought process of leading financial advisors
The innovative business models panel, which allowed six separate business models to be introduced in a limited time, forcing other attendees to consider their own strategies
The wealth management & family office services break-out session that helped set the stage for the consumer panel and the hedge funds & other alternative investments break-out session that many said gave them their first comprehensive understanding of hedge funds
The fee-only financial advisors & independent reps market break-out session which brought together long-time custodial competitors from Charles Schwab, Fidelity Investments, TD Waterhouse, and Fiserv, along with representatives of new innovative competitors including Merrill Lynch, Bear Stearns, and Ameritrade
And the group dinner held in Tiburon, CA, which fostered informal communications amongst members from dozens of market segments

Tiburon CEO Summit VI was held April 29-30, 2004 in San Francisco, CA. The Summit started at 11:00am on Thursday, April 29, included a networking dinner that evening in Tiburon, & concluded at 5:00pm on Friday April 30. Almost 75 senior industry executives & media representatives took two days out of their busy schedules to participate. Chip Roame (Managing Principal, Tiburon Strategic Advisors), Julie Allecta (Partner, Paul, Hastings, Janofsky, & Walker), Tim Armour (Managing Director, Morningstar), Bob Barrett (Partner, FT Ventures), Keith Mitchell (CEO, Mitchell Advisers), & Paul Schaeffer (Managing Director, SEI Investments) made general session presentations. Other sessions included a consumers panel, a debate on winning channels in the high net worth market, & a series of presentations on innovative business strategies.

Also in attendance for CEO Summit VI were Tiburon employees Jeff Gyomber (Research Manager & Consultant) & Krista Jenssen (Web Site & E-Commerce Manager), as well as Tiburon principal candidate Will Hogan (Consultant, Hogan & Company).

Tiburon Strategic Advisors, a market research & strategy consulting firm serving the brokerage and investment management industry, held its sixth semi-annual Tiburon CEO Summit late last month in San Francisco, CA. Tiburon's CEO Summits have become a leading-edge forum for industry CEOs and other senior executives to gather and debate the future of the brokerage, investments, advice, and wealth management industries. Tiburon's research serves as the foundation of the meetings and all participants share views openly. As an outcome of the Tiburon CEO Summit, Tiburon makes available this summary.

Tiburon’s sixth semi-annual CEO Summit was held in San Francisco, CA on April 29-30, 2004. Seventy-five senior industry executives and consultants were present. Chip Roame of Tiburon Strategic Advisors, Julie Allecta of Paul Hastings, Paul Schaeffer of SEI, Tim Armour of Morningstar, Bob Barrett of FT Ventures, and Keith Mitchell of Mitchell Advisers made general session presentations. Other sessions included a consumers panel, a debate on winning channels in the high net worth market, and a series of presentations on innovative business strategies.

After sharing the short update on Tiburon, Mr. Roame discussed the state of the financial services industry broadly. This included comments on short-term challenges, consumer wealth, the competitive playing field, and ways to win. Specifically, Mr. Roame noted that:

Julie Allecta and Mitch Nichter (Partners, Paul, Hastings, Janofsky, & Walker)

Drawing on her 26 years of experience in the industry and her years actually working as an attorney with the SEC, Ms. Allecta suggested that, in the short run, it would be expensive for advisors to meet many of the new regulatory requirements and that there probably would be changes in and greater disclosure concerning reciprocal practices and payments among industry participants (as examples, she cited likely changes in soft dollar services and disclosure concerning mutual fund distribution payments). However, she concluded that the long run effects would leave the industry strong and healthy, and that the US investor would continue to want and need safe, easy-to-understand, pooled investments, like mutual funds, and would continue to seek out professional advisors to assist them in their wealth management.

Before closing, Mitch Nichter, also a senior partner in the Paul Hastings investment management practice, added to Ms. Allecta’s comments and outlined some of the recent regulatory developments affecting advisors, mutual funds, and hedge funds. Ms. Allecta and Mr. Nichter’s views on new developments and possible restructurings within the investment industry were discussed at greater length in subsequent breakout sessions at the Summit.

On the second day, three critical general session panel discussions were held, involving consumer needs, winning markets, and innovative business models. All three panels included wide-open dialogue and received wide praise.

Organized ad hoc after repeated comments seeking a better understanding of consumer needs, the consumer needs panel drew wide praise. Four well-educated professional consumers joined financial advisor facilitators Scott Hanson of Hanson McClain and Tif Joyce of Joyce Financial Management, and told their unpleasant stories about their experiences with brokers, banks, and advisors. One consumer summed up her experience by noting, “the investments industry is stuck in a self-imposed state of confusion. Companies spend so much time developing more complicated products that advisors can’t explain to their clients, and yet they wonder why consumers are baffled.”

Six Tiburon clients joined Tiburon Managing Principal Chip Roame on stage to discuss their innovative business models. These included two financial advisors, two markets companies, and two product companies. Scott Hanson of Hanson McClain told of raising multiple billions of dollars of assets by narrowly targeting the needs of telephone company employees. Jeff Roush of Harris myCFO spoke of addressing the wealth management needs of the ultra affluent. David Johnson of Powell Johnson spoke of building a full-service fee-oriented brokerage firm that is attractive due to its culture. Scott Dell’Orfano from SEI Investments told of narrowing one’s target market as a strategy to deepen client relationships. Lee Kranefuss from Barclay’s discussed the booming exchange traded funds market. And Ken Kam from Marketocracy spoke of a new research source being used to beat the market.

Product sessions were held on mutual funds; index funds, exchange traded funds, & hedge funds; fee-accounts, turnkey asset management programs, and separately managed accounts; and wealth management, family office services, & life planning. The product sessions were generally the most widely attended, and the wealth management session was the singularly largest session.

Jim Atkinson of Orbis Marketing and Julie Allecta of Paul Hastings led the mutual funds session. Given the recent state of affairs in the mutual funds industry it isn't surprising that this panel produced a robust discussion on a variety of topics. One particularly hot topic focused on the question of the commoditization of mutual funds. Participants didn't agree on whether the industry was largely commoditized, e.g., offering functionally similar products with little differentiation. A number of panelists noted that fees within the industry were likely to decline and that margins would decline as a result of lower revenues and higher costs. A number of participants raised the prospect that 12b1 fees may be curtailed or modified greatly and wondered how that might affect the industry.

Andy Arenberg (Barclays Global Investors), Phil Nicolaou (Rydex Investments), and Tom Lydon (Global Trends Investments) facilitated the index funds, exchange traded funds, & hedge funds session. The session revolved around the fact that the investment process is being polarized with twin growth patterns from both indexing and alternative investments. Index funds, enhanced index funds, and exchange traded funds (ETFs) are continuing to garner a greater share of fund flows as financial advisors and individual investors seek correlation with asset classes for a reasonable price. For instance, the ETF market has ballooned to $160 billion and new ETFs continue to come to market representing all domestic assets classes and industry sectors. Similarly, with Charles Schwab’s recent introduction of its alternative investments (hedge funds-of-funds) platform, more investment advisors are helping diversify client portfolios with these non-correlated investment options. Minimums as low as $25,000, better transparency, and daily pricing make hedge funds-of-funds offerings more suitable for typical clients. In this increasingly competitive environment, investment advisors understand that creating and maintaining long-term net alpha is crucial to their businesses. The group concluded that these emerging investment products, if utilized correctly, might help provide the solution.

Fee-Accounts, Turnkey Asset Management Programs, & Separately Managed Accounts

In the Fee-Accounts, TAMPs, and SMAs session Steve Smith, Kevin Malone, and Barry Mendelson discussed these programs from the investment manager, investment research, and program sponsor perspective. Steve Smith of SEI Investments' Advisor Network discussed the challenges faced by the money managers participating in sponsors' SMA programs. There is a lot of stress in the entire system of SMAs caused by many factors. To date, sponsors have not properly considered the operational challenges they place on participating money managers. The lack of industry established standards has resulted in managers, “who participate in 25 programs, running 25 different systems, operating 25 different workflows, and having 25 different trading instructions. The impact is exponential. Achieving scale is a serious concern. This challenge is further compounded by fee compression." Kevin Malone of Greenrock Research discussed the importance of investment manager research in fee-based programs, including the analysis of portfolios, attribution of investment returns, and organizational character underlying investment performance. Barry Mendelson of Capital Market Consultants provided practical advice for institutional sponsors like brokerage firms, banks, insurance companies, trust, and RIA firms in launching and maintaining fee-based investment programs. Mr. Mendelson discussed the importance of strategic planning in the development of these programs, and noted, that “too many players have jumped into the fee-accounts arena in the last ten years without a game plan, a brand strategy, or an approach that is integrated with their overall corporate objectives. Because branding intends to produce a specific consumer experience every aspect of fee-account programs needs careful attention including program naming, asset allocation advice, product selection, investment research, performance reporting, advisor training, and so forth.” The goal he said is to “strive for consistency throughout the entire process that produces and maintains these programs.”

In the wealth management, family office services, & life planning session, Jeff Gyomber and Steve Moeller led a dynamic dialogue on identifying and responding to consumers’ non-investment needs. Mr. Gyomber, a former research manager at Tiburon, pointed out that while the vast majority of advisors consider themselves financial planners, “only 20% of them actually create formal financial plans for their clients.” Mr. Moeller, President of American Business Visions, challenged the attendees to examine ways to move from product-oriented approaches to consumer-oriented models; he noted that, “advisors who truly understand what makes their clients happy will be able to provide added value in a commoditized market.”

Paul Schaeffer of SEI Investments and Gordon Turnbull of Wells Fargo Bank led a session on the traditional captive channels, including wirehouses, banks, and insurance companies. The session began with an overview of the evolution of the broker landscape from a playing field populated largely by individual salesmen focused on commission-based sales to one increasingly filled with teams of fee-based advice-providers, concentrating on wealth management and client service. There then followed a drill-down on the drivers of fee-based pricing and on the team delivery of services, as well as a debate about the implications of convergence -- the trend away from siloed providers of proprietary products and toward financial services hubs that provide a full range of products (banking, brokerage, insurance, etc.) and feature open architecture and best-in-class products. Most concluded that pure product manufacturers will see their power diminish, and that the winners will be those firms that can best manage and grow their customer relationships. However, some worried about a potential power shift toward front-line client service personnel who could extract most of the available economic gains for themselves in the form of higher personal compensation due to their ability to move customer relationships.

In the fee-only financial advisors’ session, Jeff Gyomber and Evan Simonoff led a stimulating discussion on the challenges and opportunities in this increasingly competitive market. Mr. Gyomber, a former research manager at Tiburon, noted that, “there is a flood of new competitors coming into the market from two different angles. Some new players such as Ameritrade are competing for smaller advisors who are finding it more challenging to maintain relationships with the traditional custodians like Schwab, while others such as Bear Stearns are targeting larger advisors who may have historically custodied at the banks.” The session was notable in that it featured discussions amongst top executives at each of the major custodians, including Fidelity Investments, TD Waterhouse, Fiserv/First Trust, Merrill Lynch, Bear Stearns, and Ameritrade, along with numerous Schwab alumni. Mr. Simonoff, editor of Financial Advisor Magazine, commented that, “getting all the competitors in a small group setting was an impressive achievement; the interaction between them was invaluable.”

David Elliott of RS Investments and Ward Harris of McHenry Consulting led a session devoted to the past and future of the rapidly growing 401K market. Of particular interest to the attendees was the migration of baby boomer employees, from plan participants to retirees. Also of interest is the rise of managed investment options that can relieve workplace investors of the burden of self-management. Attendee Julie Allecta of the Paul Hastings brought the perspective of a securities and retirement lawyer to these timely business issues.

Dennis Clark of Advisor Partners and Scott MacKillop of Trivium Consulting facilitated a session called Ask the Financial Advisors, which offered several service providers opportunity to conduct some direct customer research. Product providers such as Barclay’s iShares and SEI Investments, as well as custodians such as Bear Stearns and Ameritrade took this opportunity to interact in an informal setting with their key target market – high-end advisors. The advisory firms represented ranged from Harris myCFO representing the family office model to Ronald Blue & Company, a fee-only financial planning firm, which caters to the Christian community.

The management sessions generally had smaller crowds but were sometimes quite passionate, as the issues of human resources, technology, marketing, and the markets were widely debated.

Mitch Vigeveno and Peter Shannahan led a dynamic session on a wide range of human resources and recruiting issues. Mr. Vigeveno leads the search firm Turning Point in Clearwater, FL and Mr. Shannahan is president of Shannahan & Company in Mill Valley, CA. Among the attendees were Dennis Clark of Advisor Partners, Lori Medlen of Financial Research Associates, and Ken George of Financial Services Resource Corporation. Key topics included interview techniques, behavioral testing recommendations, and the costs and consequences of making a bad hire. Mr. Vigeveno pointed out the importance of crafting a concise performance profile outlining specifically the first year objectives for new employees and interviewing against those requirements.

Ron LoVetri of Integrated Decision Systems and Thusith Mahanama of BTA led a session on the application of technology. Participants agreed that compliance is the new technology driver. Driven by need to archive and quickly retrieve documents, email, and instant messages, the adoption of document management is increasing. In addition, by October 2004 advisors must create disaster recovery plans that ensure business continuity including physical location, operations, and key personnel. Advisors are looking to their custodians, technology suppliers, and legal counsel to navigate these new requirements.

Jim Atkinson of Orbis Marketing, David Smith of Financial Advisor Magazine, and Brooke Southall of Investment News facilitated a session on marketing, advertising, & public relations. The session included advice on the value of brand building & positioning, the effectiveness, the necessity (or lack thereof) of advertising, methods for dealing with the media from a public relations perspective, the merits of public relations versus advertising, and examples of various approaches to building image and driving sales a ’la carte, or by integrating marketing, advertising and public relations efforts. The discussion on dealing with the media was lead by Brooke Southall, a reporter with Investment News. Mr. Southall was clear in his advice that when seeking public relations it was important to recognize the needs of the publication and not to simply focus on self-serving needs.

Tim Armour of Morningstar and Kevin Malone of Greenrock Research teamed up to lead a session on the markets & investment research starting with an analysis of the new Morningstar research tools. These tools allow research on individual securities, mutual funds, separate accounts and variable annuities all in one report. This was followed by a discussion of the current investment themes in the domestic equity and fixed income markets. Finally, the group heard from Ken Kam of Marketocracy on the new and exciting way in which Marketocracy has developed sources of research and the outstanding performance of the Marketocracy m100 mutual fund.

The CEO Summit closed with four short general session presentations from Tim Armour, Bob Barrett, Keith Mitchell, and Chip Roame.

Tim Armour from Morningstar was a guest speaker on Friday afternoon; he addressed a number of key areas that Morningstar has identified as likely to drive future growth in investment management. These included retirement income management, discretionary management of 401k plans, the capture of IRA rollover assets, the growth of alternative investments, and institutional products that control risks and taxes such as ETFs. These are all areas that Morningstar is actively addressing and developing capabilities for its clients.

Bob Barrett from FT Ventures, a venture capital firm specializing in investing in financial services related technology companies, gave an overview presentation on current trends in the venture capital markets and market areas FT Ventures is currently reviewing. Bob also shared his firm’s unique strategy for competing in the market (leveraging its financial services company investors) and summarized various best practices for venture capital firms.

Keith Mitchell from Mitchell Advisers brought the group a perspective on the impact of M&A on strategic plans within the asset and wealth management sector. He cited open architecture, regulatory compliance costs, and distribution requirements as driving factors behind many strategic initiatives and seemed to be prompting a much higher level of dialogue around M&A in 2004. While acquisitions in the wealth management space continue to be an area of intense interest, it is still very much focused on very highly developed practices in prime wealth creating markets as a way for some firms to expand nationally.

Mr. Mitchell spoke about the increasing costs and administrative burdens likely to be incurred by mutual funds companies as a result of the recent problems as driving factors leading many groups to seek strategic solutions with larger firms. As importantly, if not more so, Keith said, is the issue of distribution and the rationalization of the investment many groups have made in human, promotional, and technology areas relating to increasing assets under management. Some will determine that a better solution will be to combine with stronger organizations.

Mr. Mitchell also spoke about the focus on the structure of transactions being an evolutionary aspect of M&A within asset management deals and that those being negotiated today are far more effectively developed than those of just a decade ago. Mr. Mitchell stated that he believes that smarter deals are being contemplated and completed today by more experienced executives and with much higher levels of strategic clarity.

Tiburon's Managing Principal Chip Roame closed the Summit first by offering an open forum for any unaddressed industry topics. Topics that arose included identifying and preventing potential industry scandals in the future, discussing practical methods of training & retaining qualified employees, and further defining the wealth management trend. He then reminded attendees of a few key points:

General feedback for the Tiburon CEO Summit included overwhelmingly positive comments. The balance of general session speakers, general session panel discussions, & breakout groups, the diversity of content, and the personal interaction were all frequently complimented. Some of the highlights for attendees included:

Tiburon CEO Summit V was held on October 3-4, 2003 in Tiburon, CA and included a networking dinner in Sonoma at the home of Tif Joyce (President, Joyce Financial Management). Almost 25 senior industry executives & media representatives took two days out of their busy schedules to participate. Chip Roame (Managing Principal, Tiburon Strategic Advisors) made a general session presentation.

Select media representatives are permitted to attend Tiburon's CEO Summits. The media representative included for Tiburon CEO Summit V was Brooke Southall (Reporter, Investment News).

Also in attendance for Tiburon CEO Summit V was Tiburon employee Jeff Gyomber (Research Manager).

Tiburon CEO Summit IV was held in March 2003 in Tiburon, CA. 15 senior industry executives took two days out of their busy schedules to participate.

Also in attendance for Tiburon CEO Summit IV was Tiburon employee Krista Jennsen (Vice President).

Tiburon CEO Summit IV took on more of a flair of the Tiburon Fellows Program, with numerous new consultants having joined the group. Highlights included:

Tiburon CEO Summit III was held in Mill Valley & Tiburon, CA in September 2002 and included a networking dinner at the home of Chip Roame (Managing Principal, Tiburon Strategic Advisors). Over ten senior industry executives took two days out of their busy schedules to participate.

Also in attendance for Tiburon CEO Summit III was Tiburon employee Krista Jennsen (Vice President).

Tiburon CEO Summit III included discussions of expanding the program. One day of the meetings was held in Mill Valley, CA. Tiburon Managing Principal Chip Roame hosted a social dinner at his home in Tiburon.

Tiburon CEO Summit II was held in January 2002 in Tiburon, CA and included a networking dinner also in Tiburon. Ten senior industry executives took two days out of their busy schedules to participate.

Also in attendance for Tiburon CEO Summit II were Tiburon employees Krista Jennsen (Vice President) & Tamas Szarvas (Consultant).

Tiburon CEO Summit II was participatory, with all attendees leading sessions. Tiburon also hosted a social dinner in San Francisco, CA.

Jim Atkinson remembers the Second CEO Summit well and recently recalled, "it started out odd; the fellow who invited me (Tom Lydon) announced an hour after I arrived that he had come only for the opening, and needed to go to a meeting back home, leaving me in a room of strangers. It continued to be interesting, as Larry Chambers compared every financial services challenge to his war experience (oh...and mentioning once or twice that he wrote books)."

Ken George also remembers this Summit well, having traveled from his home in the Sierra foothills only to be too sick to participate, and spending the two days in his hotel room.

Tiburon CEO Summit I was held in July 2001 in Saint Helena, CA (Napa Valley). Seven senior industry executives took two days out of their busy schedules to participate.

Also in attendance for Tiburon CEO Summit I were Tiburon employees Krista Jennsen (Vice President) & Tamas Szarvas (Consultant).

Tiburon CEO Summit I was essentially a gathering to celebrate Tiburon's early successes and to plan ways to institutionalize the firm. A terrific social dinner was held at the Culinary Institute of America.

Tom Lydon remembers the First CEO Summit well and recently recalled, "Chip launched Tiburon shortly after I launched Global Trends. The first meetings were about trying to honestly assess the financial services industry. What new and exciting trends were developing? Who are the leaders? What firms are hungry and have the talent to make a difference in the future?"

Tom continued..."Chip had a well-developed business plan which included how Tiburon can positively impact change in the industry. We spent time discussing how the Tiburon executive programs could support Chip's plans and develop into a support team made up of people Chip respected in the industry. It was important early on to provide a non-commercial, non-competitive environment of talent and energetic industry executives who enjoyed spending time together."

Tom also remembered the social aspects of the first CEO Summit... "Getting away to Napa helped provide a friendly foundation for the group; kicking back in shorts and a T-shirts, eating great food, drinking great wine, and enjoying the scenery. We got to really know each other; trust and friendships developed."

Finally, Tom can help us all connect the dots from the first CEO Summit to today's overwhelmingly popular Summits... "The larger you are in the industry, the less you want to go to industry conferences. Chip and the Tiburon executive group talked about creating an annual meeting of industry executives that was non-commercial and promoted open, free-flowing dialog about the opportunities and challenges in the industry. Most importantly, it had to include good people who enjoyed each others company. That meeting is here with the CEO Summit."