Prior Tiburon CEO Summits (2008-2009)

Tiburon has held 29 prior CEO Summits, with the first CEO Summit taking place in 2001. Details of the most recently held Tiburon CEO Summits XIV-XVII are included below; for details of earlier Tiburon CEO Summits, please click here: Most Recent, 2016-2017, 2014-2015, 2012-2013, 2010-2011, 2008-2009, 2006-2007, 2004-2005, & 2001-2003.

Tiburon CEO Summit XVII: October 7- 8, 2009

Tiburon CEO Summit XVII was held October 7-8, 2009 at the Ritz Carlton Hotel in San Francisco, CA. The Summit started at 7:45am on Wednesday, October 7, included a networking dinner that evening at Servino's Restaurant, & concluded at 2:30pm on Thursday, October 8. Almost 125 senior industry executives took two days out of their busy schedules to participate. Chip Roame (Managing Partner, Tiburon Strategic Advisors), Jon Baum (CEO, The Dreyfus Corporation), John Calamos (CEO, Calamos Asset Management), Deena Katz (Chairman, Evensky & Katz and Associate Professor, Texas Tech University), Pete Kight (Vice Chairman, Fiserv), Steve Lockshin (CEO, Convergent Wealth Advisors), Andrew Rudd (CEO, Advisor Software & Former CEO, Barra), Steve Wallman (CEO, Foliofn), & Jim Weddle (Managing Partner, Edward Jones & Company) made general session presentations. Tiburon CEO Summit XVII also saw the successful inauguration of the Tiburon CEO Summit Awards presentations, with an award going to Charles Schwab (Chairman, The Charles Schwab Corporation) and Ken Fisher (CEO, Fisher Investments). In addition to the nine great speakers and two fantastic award recipients, Tiburon CEO Summit XVII also included a special general session discussion panel called Meet the Plaintiffs' Attorneys, which yielded some very relevant information for CEO Summit attendees.

Tiburon's CEO Summit XVII was held October 7-8, 2009 in San Francisco, CA

Opening Keynote Presentation:

Tiburon Managing Partner Chip Roame kicks off CEO Summit XVI by addressing the state of the financial services industry
Chip Roame (Managing Partner, Tiburon Strategic Advisors)

Tiburon CEO Summit XVII Attendee Statistics, Meet thy Neighbor, & Brief Introductions

Mr. Roame outlined Tiburon CEO Summits' past & current attendee statistics, encouraged the audience to meet one another, & proceeded with brief introductions for the remainder of CEO Summit XVII.

  • The Tiburon CEO Summits vision has not changed since CEO Summit I in 2001
  • Tiburon CEO Summit XVII had 112 confirmed attendees, all Tiburon clients, all c-level executives & executive vice presidents, which amounted to the firm's biggest ever West coast group & right in its target zone
  • Tiburon CEO Summit meet thy neighbor tradition returned to CEO Summit XVII, allowing attendees the opportunity to meet & greet right out of the gate
  • Tiburon CEO Summit XVII client attendees were less so first time attendees due to the return to the West coast but that slant was offset by Tiburon’s growing client base
  • Tiburon CEO Summit XVII client attendees are increasingly from markets & distribution companies from CEO Summit XIII, with slight decreases continuing in both product & service companies and financial advisors
  • Tiburon CEO Summit XVII client attendees were increasingly from large companies due to industry mergers and a tightening of the client definition
  • Tiburon CEO Summit XVII tied its record for female attendance
  • Tiburon CEO Summit XVII included nine guest speakers, including Jim Weddle (Managing Partner, Edward Jones & Company), Jon Baum (CEO, The Dreyfus Corporation), John Calamos (CEO, Calamos Asset Management), Pete Kight (Vice Chairman, Fiserv), Steve Wallman (CEO, Foliofn), Andrew Rudd (CEO, Advisor Software), Fred Jonske (CEO, M Financial Group), Steve Lockshin (CEO, Convergent Wealth Advisors), & Deena Katz (Chairman, Evensky & Katz and Associate Professor, Texas Tech University)
  • Tiburon CEO Summit XVII included its inaugural CEO Summit award recipients, including Ken Fisher (CEO, Fisher Investments) and Charles Schwab (Chairman, The Charles Schwab Corporation)

Two Important Tiburon Side Notes ...

Tiburon Strategic Advisors

  • Tiburon delivers research reports, market seminars, custom market research & strategy consulting projects, & advisory board roles
  • Tiburon is seeking specific personnel to exploit its considerable industry content & client needs, including a chief consulting officer or entrepreneurial consulting team, associate principals, & mid-level employees

Tiburon CEO Summit XVIII

  • Tiburon CEO Summit XVIII will take place on April 14-15, 2010 at the Ritz Carlton Battery Park Hotel in New York, NY with guest speakers to include Ed Bernard (T.Rowe Price), Abby Cohen (Goldman Sachs Group), Steve Forbes (Forbes Media), Jim McCool (The Charles Schwab Corporation), Eric Schwartz (Cambridge Investment Research), Jonathan Steinberg (Wisdom Tree), David Tittsworth (Investment Advisor Association), & Fred Tomczyk (TD Ameritrade)

Tiburon CEO Summit XVII Agenda Highlights & Guest Speaker Introductions

Tiburon CEO Summit XVII Award Recipients

  • Ken Fisher (Challenging Conventional Wisdom)
    • Proud junker (plus web-based advertising, infomercials, & radio)
    • Specialization of labor
    • Centralized service
  • Charles Schwab (Maintaining a Focus on Consumer Needs)
    • Products: discount brokerage, mutual fund supermarkets, money management, banking, custodial services, & customized technology
    • Channels: telephone service centers, 300 branches, the web, & specialized service centers

Tiburon CEO Summit XVII Guest Speakers

  • Jim Weddle (Edward Jones & Company)
    • Opportunities & challenges for financial services firms
    • Focusing on client service excellence
    • Relying on long-term strategic planning
  • Jon Baum (The Dreyfus Corporation)
    • Crossroads of recovery
    • Implications for asset management industry
    • Distribution success drivers (maintaining client focus & providing needs-based offerings)
  • John Calamos (Calamos Asset Management)
    • Ongoing challenges of today's uncertain economy
    • Increasing importance of risk management
    • Firm transformation - from a convertible securities specialist to an institutional caliber global investment manager
  • Pete Kight (Fiserv Corporation)
    • Digital consumer, digital investor, digital business
    • Focusing on client service excellence
    • Relying on long-term strategic planning
  • Steve Wallman (Foliofn)
    • Too big to fail?
    • Regulation and contagion
    • Innovation versus regulation
    • Next generation regulatory structure
    • Meaningful corporate governance
  • Andrew Rudd (Advisor Software & Barra)
    • Goal-based investing
  • Fred Jonske (M Financial Group)
  • Impact of the financial crisis
  • Serving ultra affluent clients’ financial needs
  • Future of the ultra affluent market
  • Carrier relationships
  • Managing a member owned organization
  • Steve Lockshin (Convergent Wealth Advisors)
    • Implications of the market crash
    • Future of independent financial advisors: small but growing
    • Hedge funds: Dead, taking a breather, or ready to explode
    • Strategic versus tactical asset allocation: introducing strategical
    • Where will the money go…
  • Deena Katz (Evensky & Katz and Texas Tech University)
  • Lack of human capital in the financial industry
  • Lack of educated consumers to participate in the industry

Tiburon CEO Summit XVII - Meet the Plaintiffs' Attorneys Panel (Facilitated by Ken Fisher of Fisher Investments)

  • Ryan Bakhtiari (Aidikoff, Uhl, & Bakhtiari)
    • Partner
    • Beverly Hills, CA
  • Boyd Page (Page Perry)
    • Senior Partner
    • Atlanta, GA
  • Scott Shewan (Born, Pape, & Shewan)
    • Partner
    • Clovis, CA

Tiburon CEO Summit XVII Break-Out Sessions

  • Unified Managed Households (Facilitated by Mike Gianoni of Fiserv Corporation)
    • Next step beyond models only programs and unifed managed accounts
    • Technology implications
  • Financial Advisor Technology (Facilitated by Viggy Mokkarala of Envestnet)
    • Opportunities presented by large firm transformations
    • Technology as the great equalizer
  • Retirement Income (Facilitated by Tif Joyce of Joyce Financial Management)
    • Savings shortage & retirement income challenges of 76 million baby boomers
    • Impact of lower account balances and lower home pricesngoing challenges of today's uncertain economyFirm transformation - from a convertible securities specialist to an institutional caliber global investment manager
  • Public Relations (Facilitated by Jenn Connelly of JCPR)
    • Digital consumer, digital investor, digital business
    • Focusing on client service excellence
    • Relying on long-term strategic planning
  • Human Capital (Facilitated by Mitch Vigeveno of Turning Point)
    • Attracting & retaining top talent
    • Management talent needed to fully capture the pending economic recovery

Tiburon CEO Summit Awards Presentations

Tiburon Managing Partner Chip Roame sat down with the winners of the two inaugural Tiburon CEO Summit Awards, which were awarded for the twin characteristic themes of the Tiburon CEO Summits. Specifically, details include:

  • Maintaining a Focus on Consumer Needs: Charles Schwab (Chairman, The Charles Schwab Corporation)
  • Challenging Conventional Wisdom: Ken Fisher (CEO, Fisher Investments)

Guest Presentations Coming Soon!!!

Aside from Tiburon Managing Partner Chip Roame's opening keynote presentation, nine guest presentations anchored the CEO Summit XVII agenda. Specifically, details include:

  • Jim Weddle (Managing Partner, Edward Jones & Company)
  • Jon Baum (CEO, The Dreyfus Corporation)
  • John Calamos (CEO, Calamos Asset Management)
  • Pete Kight (Vice Chairman, Fiserv Corporation)
  • Steve Wallman (CEO, Foliofn)
  • Andrew Rudd (CEO, Advisor Software & Former CEO, Barra)
  • Fred Jonske (CEO, M Financial Group)
  • Steve Lockshin (CEO, Convergent Wealth Advisors)
  • Deena Katz (Chairman, Evensky & Katz and Associate Professor, Texas Tech University)

General Session Panel Discussion Coming Soon!!!

One of the key themes of every Tiburon CEO Summit is the need to more closely listen to clients by way of presenting information in an open manner through a carefully moderated guest panel. Tiburon CEO Summit XVII included a special panel that might help Tiburon clients address certain legal needs in the coming months & years. In response to the assertions made by one CEO Summit XVI attendee that the financial services industry is vulnerable to litigation as a result of the crises of the last 18 months, a special Meet the Plaintiffs' Attorneys panel was assembled. The questions that were posed were fairly broad in nature, but the answers that were provided in response were quite specific. In true Tiburon CEO Summit spirit, this allowed Tiburon CEO-level clients to hear directly from their potential assailants in an unvarnished way. This is in sharp contrast to most CEOs' daily activities, where they are forced to rely on interpreting marketing data or listening to anecdotal stories from their sales forces. Addressing these opposing figures head-on through questions & answers may help Tiburon clients fully consider the legal ramifications of the crisis of 2008 and perhaps respond with some measure of confidence moving forward.

Attendees

Tiburon CEO Summit XVII had 110 Tiburon client attendees, including:

  • Chip Roame (Managing Partner, Tiburon Strategic Advisors)
  • Rick Adler (CEO, Convergent Capital Management, City National Corporation)
  • Gurinder Ahluwalia (CEO, Genworth Financial Wealth Management, Genworth Financial)
  • John Alshefski (Head, Business Development, Investment Manager Services, SEI Investments)
  • Ryan Bakhtiari (Partner, Aidikoff, Uhl, & Bakhtiari)
  • Chuck Baldiswieler (Group Managing Director, TCW Advisor Group, Private Client Services, & Retirement Services Group, TCW Group, Trust Company of the West, (TCW), Societe Generale Asset Management, Societe Generale)
  • Tony Batman (CEO, 1st Global Capital Corporation)
  • Jon Baum (CEO, The Dreyfus Corporation, The Bank of New York Mellon Corporation)
  • Bob Behan (President, Global Distribution, Calamos Investments)
  • Michael Bell (CEO, Curian Capital, Jackson National Life Insurance Company, The Prudential)
  • Walt Bettinger (CEO, The Charles Schwab Corporation)
  • Chris Blunt (Executive Vice President, Retirement Income Security, New York Life Insurance Company)
  • James Boyne (Chief Operating Officer, Distribuiton, Calamos Asset Management)
  • Derek Bruton (CEO, LPL Affiliated Broker/Dealers, Independent Advisor Services, LPL Financial, LPL Investment Holdings)
  • Steve Burnett (President, Hanson McClain)
  • John Calamos (CEO, Calamos Asset Management)
  • John Cammack (Chairman, Mutual Fund Education Alliance)
  • Amit Choudhury (Managing Partner, Pinnacle Partners Systems)
  • John Clendening (Executive Vice President, Shared Strategic Services, The Charles Schwab Corporation)
  • Frank Coates (CEO, Coates Analytics, PNC Global Investment Servicing, PNC Financial Services Group)
  • Jenn Connelly (CEO, JCPR)
  • Bill Crager (President, Envestnet Asset Management)
  • Peter Crenier (Head, Business Development, Investment Services, Fiserv)
  • Jay Cromarty (CEO, Investment Management & Wealth Advisory Groups, Boston Private Wealth Management Group, Boston Private Financial Holdings)
  • Ben Cukier (Partner, FTV Capital)
  • Jeff Cusack (President, Forward Management, Sutton Place Associates)
  • Cliff D’Amato (CEO, Matrix Financial Solutions)
  • Jim Dario (Head, Business Development & Relationship Management, Pershing Advisor Solutions, Pershing, The Bank of New York Mellon Corporation)
  • Scott Dell’Orfano (Executive Vice President, Fidelity Institutional Wealth Services, Fidelity Investments)
  • Jeffrey Dunham (CEO, Dunham & Associates Investment Counsel)
  • Steve Dunlap (Chief Operating Officer, Pershing Managed Account Solutions, Pershing, The Bank of New York Mellon Corporation)
  • Cynthia Egan (President, Retirement Plan Services, T. Rowe Price Group)
  • Ken Ehinger (CEO, M Holdings Securities, M Financial Group)
  • Harold Evensky (President, Evensky & Katz, Fiduciary Network)
  • Pat Farrell (CEO, Investacorp, Ladenburg Thalmann Financial Services)
  • Ken Fisher (CEO, Fisher Investments)
  • Robin Foote (Managing Director, Novantas)
  • Rob Foregger (Chief Strategy Officer, My Vest Corporation & Personal Capital Corporation)
  • George Gatch (CEO, JP Morgan Funds Management, JP Morgan Asset Management, JP Morgan Chase)
  • Mike Gianoni (President, Fiserv Investment Services, Fiserv)
  • Dave Goerz (Chief Investment Officer, High Mark Capital Management, Union Bank of California, Mitsubishi UFJ Financial Group)
  • Charles Goldman (President, Fidelity Institutional Platforms, Institutional Products Group, Fidelity Investments)
  • Rich Goldman (CEO, Security Global Investors, Rydex/SGI)
  • Craig Gordon (President, RBC Correspondent Services, Royal Bank of Canada)
  • Scott Grinis (Chief Technology Officer, Envestnet Asset Management)
  • John Grogan (CEO, Northwestern Mutual Wealth Management Company, Northwestern Mutual)
  • Bill Hackett (CEO, Matthews International Capital Management, City National Corporation)
  • Marco Hanig (President, AQR Funds, AQR Capital Management)
  • Scott Hanson (Co-CEO, Hanson McClain)
  • AJ Harper (President, PNC Managed Investments, PNC Global Investment Servicing, PNC Financial Services Group)
  • Fred Harring (General Counsel, Fisher Investments)
  • Bill Harris (Chairman, My Vest Corporation & Personal Capital Corporation)
  • Mark Headley (Chairman, Matthews International Capital Management, City National Corporation)
  • Gary Holland (Publisher, Barron’s, Dow Jones & Company, News Corporation)
  • Bob Huret (Founding Partner, FTV Capital)
  • Bob Hussey (Executive Vice President, Wealth Solutions & Institutional Services, Natixis Global Associates, Natixis Global Asset Management, Natixis, BPCE)
  • Bryce James (CEO, Smart Portfolios)
  • Steve Janachowski (CEO, Brouwer & Janachowski, Fiduciary Network)
  • Fred Jonske (CEO, M Financial Group)
  • Judy Joyce (Executive Vice President, Joyce Financial Management)
  • Tif Joyce (President, Joyce Financial Management)
  • Deena Katz (Chairman, Evensky & Katz, Fiduciary Network)
  • Pete Kight (Vice Chairman, Fiserv)
  • Pete Kris (Partner, Brazos Capital Management, AIG Investments, American International Group, (AIG))
  • Richard Lampen (CEO, Ladenburg Thalmann Financial Services)
  • Chuck Lewis (CEO, My Vest Corporation & Personal Capital Corporation)
  • Jim Livingston (CEO, National Planning Holdings, The Prudential)
  • Steve Lockshin (CEO, Convergent Wealth Advisors, Convergent Capital Management, City National Corporation)
  • Tom Lydon (President, Global Trends Investments)
  • Matt Lynch (CEO, Capital Analysts, Western & Southern Financial Group)
  • Adam Malamed (Chief Operating Officer, Ladenburg Thalmann & Company, Ladenburg Thalmann Financial Services)
  • Liz Manibay (Executive Vice President, JCPR)
  • Jim McCool (Executive Vice President, Schwab Institutional Services, The Charles Schwab Corporation)
  • Nick Mencher (Head, Consulting Firm Relations, Asset Management Business Development, TIAA-CREF Asset Management, TIAA-CREF)
  • Mark Mettelman (CEO, Triad Advisors, Ladenburg Thalmann Financial Services)
  • Viggy Mokkarala (Executive Vice President, Envestnet Asset Management)
  • Cheryl Nash (Global Head, Product Strategy & Business Development, Investment Services, Fiserv)
  • Karen Novak (Chief Operating Officer, Pershing Advisor Solutions, Pershing, The Bank of New York Mellon Corporation)
  • Bob Oros (Executive Vice President, Custom Clearing Services, LPL Financial, LPL Investment Holdings)
  • Terry Otton (CEO, RS Investments, Guardian Life Insurance Company of America)
  • Ken Ouimet (CEO, My World Investing)
  • Tim Ouimet (Founder, My World Investing)
  • Michael Pagano (Executive Vice President, Private Client Services, City National Corporation)
  • Boyd Page (Senior Partner, Page Perry)
  • John Phillips (Executive Vice President, Sales, National Financial Services, Fidelity Investments)
  • Alex Potts (CEO, Loring Ward Group)
  • Alan Reid (CEO, Forward Management, Sutton Place Associates)
  • George Riedel (Head, Sales & Client Services, Third-Party Distribution, T. Rowe Price Group)
  • Neal Ringquist (President, Advisor Software)
  • Andrew Rudd (CEO, Advisor Software)
  • Bill Salus (Chief Business Development Officer, PNC Global Investment Servicing, PNC Financial Services Group)
  • Matt Schiffman (Head, Retail - America, Legg Mason)
  • Chuck Schwab (Chairman, The Charles Schwab Corporation)
  • Sandeep Sharma (Executive Vice President, Product Strategy, My World Investing)
  • Sterling Shea (Head, Winner’s Circle Advisor Rankings & Conference Program, Barron’s, Dow Jones & Company, News Corporation)
  • Scott Shewan (Partner, Born, Pape, & Shewan)
  • Tom Sholes (Executive Vice President, Strategic Planning & Global Product Management, PNC Global Investment Servicing, PNC Financial Services Group)
  • Babu Sivadasan (Executive Vice President, Engineering, Envestnet Asset Management)
  • David Smith (Group Publisher, Financial Advisor & Private Wealth Magazines, Charter Financial Publishing Network)
  • Esther Stearns (President, LPL Financial, LPL Investment Holdings)
  • Marie Swift (CEO, Impact Communications)
  • Camille Taglia (Executive Vice President, Research, Barron’s, Dow Jones & Company, News Corporation)
  • Frank Trotter (President, Ever Bank Direct, Ever Bank Financial)
  • Mitch Vigeveno (CEO, Turning Point)
  • Greg Vigrass (President, Folio Institutional, Foliofn)
  • Craig Walling (CEO, Private Banking, Wealth Management US, UBS)
  • Steve Wallman (CEO, Foliofn)
  • Gib Watson (CEO, Prima Capital Management, Prima Capital Holding, Matrix Financial Solutions)
  • Jim Weddle (Managing Partner, Edward Jones & Company)
  • Carol Yochem (Executive Vice President, Wealth Management, First Citizens Bank, First Citizens Banc Shares)

Also in attendance for Tiburon CEO Summit XVII was Tiburon employee Tudor Jones (Business & Marketing Associate).


Tiburon CEO Summit XVI: April 15-16, 2009

Tiburon CEO Summit XVI was held April 15-16, 2009 at the Ritz Carlton Hotel in New York, NY. Tiburon CEO Summit XVI started at 7:45am on Tuesday, April 15, included a networking dinner that evening at Delmonico's Restaurant, & concluded at 5:30pm on Wednesday, April 16. Over 125 senior industry executives took two days out of their busy schedules to participate. Chip Roame (Managing Partner, Tiburon Strategic Advisors), Jud Bergman (CEO, Envestnet Asset Management), Jessica Bibliowicz (CEO, National Financial Partners), Mark Casady (CEO, LPL Financial), Kip Condron (CEO, Axa Financial), Jeffrey Dunham (CEO, Dunham & Associates Investment Counsel), Ken Fisher (CEO, Fisher Investments), Roger Ibbotson (Professor, Yale University; CEO, Zebra Capital Management; & Former CEO, Ibbotson Associates), Scott Powers (CEO, State Street Global Advisors), & Paul Stevens (CEO, Investment Company Institute) made general session presentations. Four general session panel discussions included a consumers panel, an advisors panel, a gatekeepers panel, & the now permanent special general session panel discussion addressing current events.

Tiburon's CEO Summit XVI was held April 15-16, 2009 in New York, NY

Opening Keynote Presentation:

Tiburon Managing Partner Chip Roame kicks off CEO Summit XVI by addressing the state of the financial services industry
Chip Roame (Managing Partner, Tiburon Strategic Advisors)

Tiburon CEO Summit XVI Welcome & State of the Financial Services IndustryTiburon CEO Summits Vision, Tiburon Core Business Services, & A Brief Introduction

Mr. Roame summarized the Tiburon CEO Summits vision and outlined the firm's core business services, taking a few moments to thank the Tiburon CEO Summit XVI speakers & sponsors:

  • Tiburon's CEO Summits were created in 2001 after Mr. Roame noted the lack of CEO-level interaction across traditional industry lines and yet saw the consistency of issues being addressed by these same executives
    • Tiburon's CEO Summits have evolved from a just a handful of industry colleagues meeting in Tiburon to 100+ CEO-level Tiburon clients attending two day conferences at the Ritz Carlton Hotel in San Francisco, CA & New York, NY
    • Mr. Roame reiterated the two themes of all Tiburon CEO Summits - Challenging Conventional Wisdom & Maintaining a Consumer Orientation
  • Tiburon's core businesses include Research Reports & Research Report Access Program, Market Seminars & Conference Speeches, Market Research & Strategy Consulting Projects, & Advisory Board Roles
  • Mr. Roame introduced Tiburon CEO Summit XVI's nine terrific guest speakers, including Jud Bergman (CEO, Envestnet Asset Management), Jessica Bibliowicz (CEO, National Financial Partners), Mark Casady (CEO, LPL Financial Services), Kip Condron (CEO, Axa Financial), Jeffrey Dunham (CEO, Dunham & Associates Investment Counsel), Ken Fisher (CEO, Fisher Investments), Roger Ibbotson (Professor, Yale University; Chairman, Zebra Capital Management; & Former CEO, Ibbotson Associates), Scott Powers (CEO, State Street Global Advisors), & Paul Stevens (CEO, Investment Company Institute)
  • Mr. Roame then thanked the Tiburon CEO Summit XVI sponsors, including Advisor Software, Envestnet Asset Management, Fiserv (Fiserv Investment Services), Foliofn (Foliofn Institutional), JCPR, LPL Financial, Mass Mutual Financial Group, Natixis (Natixis Global Associates), PNC Financial (PNC Global Investment Servicing), Rafferty Holdings (Direxion Funds), State Street Corporation (State Street Global Advisors), TD Ameritrade (TD Ameritrade Institutional), The Bank of New York Mellon Corporation (Pershing Advisor Solutions), & The Charles Schwab Corporation (Schwab Institutional) whose financial support allow the CEO Summits to be held at the Ritz Carlton Hotel and attendance to be open to 100+ CEOs

State of the Financial Services Industry

Year-End 2007 Recollection: Winning Products & Channels

Mr. Roame introduced his presentation with a brief overview of the recent past, discussing such factors as consumer wealth, the retirement issue, leading & growing products, the state of the channels, and a mention of the increasing role of global markets:

  • The ratio of consumer household financial assets had been relatively stagnant since 2002, with investable assets accounting for two-thirds of all financial assets
  • Baby boomers were still not saving the traditional way in 2007, maintaining negative saving rates from 2005 & 2006
  • Life expectancy was becoming a problem, but consumers, and especially baby boomers, had lots of assets in retirement plans & houses that they could liquidate to retire
  • Mutual funds were the dominant investment product and mutual fund net flows still led those of other investment products
  • Target date mutual funds had become the industry darling and were gathering assets quickly
  • Exchange traded funds had become the most significant product development since mutual funds in the 1940s
  • Hedge funds had gathered over $2.0 trillion assets, more than SMAs & ETFs combined
  • The wirehouses and retail banks controlled almost two-thirds of all consumer investable assets
  • And for investment management firms, non-US mutual funds assets under management had surpassed those of US mutual funds

2008-2009 Credit Crisis: Consumer & Industry Impacts

With the table set, Mr. Roame then discussed the events of the last year, presenting some high-level Tiburon research findings:

  • And then came the credit crisis, with lots of parties to share the blame, including consumers who took out loans they were unable to handle, commercial banks who created sub-prime & no-documentation processes, mortgage brokers who paid huge agent incentives to close any transaction, & investment banks who created & sponsored complex mortgage backed derivative products
  • The stock markets all declined sharply in 2008, with the indices being down 31% to 41%
  • And then came the government's help... All five of the larges US government bailouts have been of financial services companies, wiht four happening in 2008, including the Economic Stabilization Act, and the bailouts of Fannie Mae & Freddie Mac, AIG, and Bear Stearns
  • The average American worker lost one-quarter of his or her 401k retirement plan savings in 2008
  • Consumer households lost $2.0 trillion in real estate equity since 2006, down to $8.9 trillion, with home equity levels falling to 43%, which is the lowest number on record
  • In aggregate, consumer household net worth fell $11.0 trillion in 2008 to $52.0 trillion
  • And the number of consumer households with over $1.0 million net worth declined almost 30% in 2008 to 6.7 million
  • There have been several dramatic financial service industry impacts as a result, including huge AUM drops, 325,000 jobs lost worldwide since 2007, $680 billion of losses & write-offs in US firms alone, and investment manganager margins dropping from 40% to 25%
  • Actively managed equity mutual funds had net outflows of $238 billion in 2008 after years of positive net flows
  • Hedge fund assets ended 2008 at $1.3 trillion having peaked at $1.8 trillion mid-year
  • Financial institutions' capital raises have just offset their losses & write downs
  • Retail banks have had the highest market capitalization loss by percentage in the financial services industry at negative-63%
  • Bank of America & Merrill Lynch, Citigroup, AIG, Wells Fargo & Wachovia, and JP Morgan Chase, Washington Mutual, & The Bear Stearns Companies all lost over $100 billion of market capitalization since October 2008
  • As a result of recent events, consumers are skeptical of the financial services industry, with three-quarters believing that Bernie Madoff type behavior is common
  • Investors are increasingly going to court to seek resolution, filing 210 class action lawsuits alleging securities fraud, up almost 100% since 2006, half of such against financial institutions

2009 & Beyond: New Industry Trends & Directions

Clearly the industry stands at a crossroads, so Mr. Roame then addressed the future of products & services and the market & distribution channels that will deliver them:

  • Investment products will likely move from complex, risky, & high fees to more simple, risk averse, & sustainable products. Fading products might include closed-end funds, mortgage related products, & securitized products. Those with unclear futures include credit funds, distressed debt funds, & real estate funds. Those products that look like they might emerge as winners include individual equities & bonds, CDs, 40 act structures, and ETFs & Active ETFs
  • For example, while ETF assets declined from $608 billion to $578 billion in 2008, net flows into ETFs increased to $178 billion, up 20% since 2007
  • And while 2008 investment returns depressed ten year hedge fund investment returns, those returns are still positive, unlike the long-only world
  • The most highly ethical and value-added markets & distribution channels are likely to gather the greatest assets. Fading channels might include wirehouses, investment bankers, & investment consultants. Those with inclear futures might include define contribution plans, retail banks, & discount brokers. Those channels that look like they might emerge as winners include online financial services, independent reps, & fee-based financial advisors
  • On one hand, the major investment banks have gone bankrupt, been acquired, or converted to banks
  • Goldman Sachs Group's employees have seen their earnings plummet, with an average of $357,000 in 2008, down 50% since 2007
  • Almost all wirehouse clients say that they intend to take money away from their brokers
  • Meanwhile, fee-based financial advisors' big three custodians have brought in more new assets since the beginning of 2007 than the big four wirehouses, and The Charles Schwab Corporation's 5,500 fee-based financial advisors have brought in more assets than even Merrill Lynch's 16,690 brokers since the beginning of 2007
  • Retail banks will be the most aggressive acquirers because they are the largest institutions and financial institutions buyouts are likely to grow significantly from just 13% of all buyouts

Tiburon CEO Summit XVI Kick-Off

Tiburon CEO Summit Guest Speakers Introduction & Agenda Highlights

Tiburon CEO Summit XVI features a Current Events Panel, with panelists including Chuck Baldiswieler (Trust Company of the West), John Cammack (T. Rowe Price Group), Steve Deschenes (Mass Mutual Financial Group), John Murphy (Oppenheimer Funds), & Steve Wallman (Foliofn)

Guest speakers include:

  • Jud Bergman (Envestnet)
  • Jessica Bibliowicz (National Financial Partners)
  • Mark Casady (LPL Financial)
  • Kip Condron (Axa Financial)
  • Jeffrey Dunham (Dunham & Associates Investment Counsel)
  • Ken Fisher (Fisher Investments)
  • Roger Ibbotson (Yale, Zebra, & Ibbotson)
  • Scott Powers (State Street Global Advisors)
  • Paul Stevens (Investment Company Institute)
  • Other Tiburon CEO Summit XVI highlights include the Ask the Consumers, Ask the Advisors, & Ask the Gatekeepers panel discussions, as well as six break out sessions, including:

    • Modern Portfolio Theory
    • Break Away Brokers
    • Financial Advisor Technology
    • Retirement Income & the Impace of the Recent Credit Crisis
    • Alternative Investments
    • Distribution Insight that Works

    A Closing Word: Tiburon CEO Summit XVII & Tiburon's Immediate Needs

    Mr. Roame concluded his presentation with a mention of the eight guest speakers for Tiburon CEO Summit XVII, including Jon Baum (The Dreyfus Corporation), John Calamos (Calamos Asset Management), Deena Katz (Chairman, Evensky & Katz), Pete Kight (Fiserv), Steve Lockshin (Convergent Wealth Advisors), Andrew Rudd (Advisor Software & Barra), Steve Wallman (Foliofn), & Jim Weddle (Edward Jones & Company). He also mentioned immediate Tiburon needs, including hiring of principals & summer interns...

    Guest Presentations

    Aside from Tiburon Managing Partner Chip Roame's opening keynote presentation, nine guest presentations anchored the CEO Summit XVI agenda:

    Jud Bergman (CEO, Envestnet Asset Management)
    Tiburon CEO Summit XVI Guest Speaker
    Jud Bergman (CEO, Envestnet Asset Management)

    Jud Bergman has served as the CEO of Envestnet Asset Management since 1999, where he is responsible for forming & leading the Envestnet management team, guiding Envestnet's strategic alliances, and managing the implementation of Envestnet's business plan.

    After a brief introduction by Chip Roame (Managing Partner, Tiburon Strategic Advisors), Mr. Bergman took some time to introduce Envestnet's TAMP structure, and followed that by discussing the various opportunities for branding that he sees in the wide-open independent channels. Mr. Bergman made the following points:

    Broken Trust

    • Lineup of luminaries that are now fallen is staggering

    Broken Industry Reputation

    • Change of players has been remarkable
    • Brands will need significant re-tooling
      • Wirehouses were the Tiffany in 1999
    • Too Big to Fail (stabilization of firms left standing)
      • Integration to new fee-based business model
      • Recovering credibility
      • Re-allocation of capital on infrastructure
      • New regulations
    • Independent brand value not yet fully recognized on Main Street
      • Securities America & Commonwealth have done very well in pointing to the brand of the independent advisor rather than the custodians
      • E-Money & Assetmark have done good jobs on branding independent advisors

    Broken Portfolios

    • Risk/Reward comfort level
    • Time horizon for meeting goals & objectives
    • Strategic asset allocation
    • Emotional frontier & current frame of mind

    The Benefits of Independence

    • Objectivity
    • Alignment
    • Flexibility

    Business Impacts for Product & Platform Providers

    • Platform providers will become increasingly important much in the same way as cable providers have, but branding will be more closely associated with the independent advisors themselves (cable channels) versus the platform provider (cable providers)
    • As a product provider, trying to increase performance predictability is a key motivator
    Tiburon CEO Summit XVI Guest Speaker
    Jessica Bibliowicz (CEO, National Financial Partners)
    Jessica Bibliowicz (CEO, National Financial Partners)

    Jessica Bibliowicz has served as CEO of National Financial Partners since 1999 and as chairman of the board of directors since 2003.

    After a brief introduction by Chip Roame, Ms. Bibliowicz discussed the new challenges of operating as a public company, addressed the opportunities she sees for the firm after its run of acquisitions, and talked about trends across National Financial Partners' three core businesses, including large case life insurance, employee benefits, & investment advice. Ms. Bibliowicz made the following points:

    Lower Employment, Compensation, & Contributions

    • Lower employment affects broker side the most
    • Compensation is under scrutiny

    Potential Health Care Reform

    • Medical cost inflation continues
      • Rate increases are passed on to employees
      • Tighter underwriting
      • Employers unbundle and price-shop benefits
    • Employer-based
    • Plus coverage for 47 million uninsured

    Early Recovery Typical of Insurance

    • People don't want to see volatility, just to see the wealth transfer
    • Creative product innovation returning vibrancy to the insurance world and post-retirement investing community

    Federal Regulation of Insurance

    • Will allow products to come to market more quickly, rather than having to be approved across the 50 state level

    Intra Wirehouse Movement

    • Brokers are still moving within the wirehouses, but now clients are leaving
    • There is an opportunity to improve all the wirehouses by working to improve client confidence

    Winning Business from the Wirehouses

    • Open architecture is here to stay

    Conserving Cash

    • Conserve cash by working on networking opportunities with friends in the investment management industry

    Helping Firms

    • Using all assets to help all businesses
    • Selling all businesses on the fiduciary strengths of the greater firm
    Tiburon CEO Summit XVI Guest Speaker
    Mark Casady (CEO, LPL Financial)
    Mark Casady (CEO, LPL Financial)

    Mark Casady has served as CEO of LPL Financial since 2004 and added the chairman title in 2006. He has been instrumental in leading the company to become a multi-faceted organization. He joined the firm in 2002.

    After a brief introduction by Tif Joyce (President, Joyce Financial Management), Mr. Casady addressed how both growth in the independent rep market and recent market turmoil have brought about new challenges for this market, including some of the ways in which LPL Financial plans to stay ahead of trends as the nation's largest independent broker/dealer. He focused on scale, branding, & the changing regulatory environment. Mr. Casady made the following points:

    Opportunity for the Independent Model Has Never Been Greater

    • LPL research of today's consumers shows effects of the market decline:
      • 25% trust their full-service brokers less
      • 42% view full-service brokers more negatively
      • 50% are contacted less than monthly or not at all by their full-service brokers
      • 53% now using independent advisors are more satisfied
      • 61% claim advisor relationship is more important than brand

    Different Investors Emerging from the Economic Crisis

    • Scared & uncertain about the future
    • Serious impact to long-term financial plans
    • 42% concerned about job loss
    • 31% decrease in average net-worth
    • 38% will delay retirement

    Importance of Scale

    • Consolidation leading to greater resources will create more competitiveness, and this cycle will serve to allow certain firms to focus on scale

    Changing Regulatory Landscape

    • Rebuilding trust between Wall Street & Main Street
      • Single regulatory organization
      • Protection of assets custody rule
      • Greater transparency
    Tiburon CEO Summit XVI Guest Speaker
    Kip Condron (CEO, Axa Financial)
    Kip Condron (CEO, Axa Financial)

    Kip Condron has served as CEO of Axa Financial and a member of the Axa Group Management Board since 2001. In addition, Mr. Condron is chairman & CEO of Axa Financial's principal insurance subsidiary, Axa Equitable Life Insurance.

    After a brief introduction by John Cammack (Head, Third-Party Distribution, T. Rowe Price Group), Mr. Condron discussed how Axa Financial is addressing the challenges presented by the current state of the financial protection & wealth management markets as well as the direction of the new regulatory climate. Mr. Condron made the following points:

    Disadvantage for Federal Relief

    • Axa has been encouraging the implementation of a federal regulator for the insurance industry
    • When TARP money became available to banks, which were regulated, insurance companies were without access to the funds unless they purchased a bank
    • The regulation of the insurance industry is antiquated

    Public Policy to Create Savings Incentives

    • The Financial Services Roundtable, which Mr. Condron is currently chairing, is looking to make recommendations on the issue of savings incentives
      • 77 million baby boomers lost 40% of their retirement assets over the last year

    In-Plan Guarantees

    • Guarantees within the 401k plan
    • Axa sees these as the wave of the future
      • Started a business in late 2007 to create the model product for in-plan guarantees
    • Market research shows that 50% of 401k beneficiaries would buy a guarantee, especially after the recent downturn
    • In a $3 trillion business, that's $1.5 trillion, but capacity is limiting the growth of the business

    Life Insurers Consolidation

    • Acquisitions must currently be marked on the balance sheet, and no companies are currently prepared to mark their balance sheets
    • Current market capitalization does not allow consolidation
    • Mr. Condron sees forced marriages by regulators, modeled similarly to the PNC Financial & National City deal
    • He is concerned by the risks he sees competitors taking due to the fact that they are now operating on borrowed funds
    Tiburon CEO Summit XVI Guest Speaker
    Jeffrey Dunham
    (CEO, Dunham & Associates Investment Counsel)
    Jeffrey Dunham (CEO, Dunham & Associates Investment Counsel)

    Jeffrey Dunham has served as CEO of Dunham & Associates Investment Counsel since its founding in 1985, and also as chairman of Dunham Trust Company. He also serves as a trustee, president, & principal executive officer of Dunham Funds.

    After a brief introduction by Sal Capizzi (Chief Marketing Officer, Dunham & Associates Investment Counsel), Mr. Dunham introduced his consumer oriented model, harkening back to the genesis of the concept and identifying the garnering of trust as the main driver of the building of long-term client relationships that are by definition fiduciary in nature. Mr. Dunham made the following points:

    Performance (Fulcrum) Fees

    • Fair value for services received
    • Adjustment of fees based on performance against the index
    • Paid based on results is by nature a fiduciary responsibility
    • Better aligns investors' objectives with industry compensation
    • Other firms offering performance fees include Vanguard, Janus, Fidelity, Riversource, & USAA, but only Dunham offers 100% performance fees on its funds

    Inside Mutual Funds

    • Measured on a relative basis on investment-to-investment professional relationship
    • Consumers don't care about relative performance, they only care about dollars gained and/or lost
    • If fund managers beat the index, the fees go up; if fund underperforms the market, the fees go to zero
    • Maximum fees vary from 50 to 100 basis points, with measurement based on rolling 12-months
    • Minimum fees vary from 0 to 25 basis points

    Financial Advisor Fees

    • Can be paid on a fixed fee basis or can be paid on a performance fee basis
    • Performance fees for financial advisors are based only on absolute return basis
      • Fees based on a monthly accounting of portfolio balance, with the balance at the beginning of each month resetting the benchmark for absolute returns
    • Qualified investors must be one of the following:
      • $1.5 million net worth
      • $750,000 invested with Dunham
      • $5 million in assetsa
    Tiburon CEO Summit XVI Guest Speaker
    Ken Fisher (CEO, Fisher Investments)
    Ken Fisher (CEO, Fisher Investments)

    Ken Fisher has served as the CEO of Fisher Investments since founding the firm in 1979. His recent research, published in professional and scholarly journals, focuses on the emerging field of behavioral finance. Mr. Fisher is known for his Portfolio Strategy financial investment column featured monthly in Forbes magazine, where his 24-year tenure makes him the fourth longest-running columnist in the magazine's 92-year history. Mr. Fisher has also written five finance & business books including 1984’s best seller, Super Stocks and his 2008 New York Times best seller, The Ten Roads to Riches. Mr. Fisher holds a Berstein Fabozzi/Jacobs Levy Award for outstanding published research, has been on the Forbes 400 list of richest Americans since 2005, and is on Investment Advisor magazine’s IA-25 list of the most influential people in that industry. His firm is the largest direct marketer in asset management.

    After a brief introduction by Tif Joyce (President, Joyce Financial Management), Mr. Fisher addressed ways in which Fisher Investments will win market share in the new market conditions. Mr. Fisher made the following points:

    Consumer Focus

    • Mr. Fisher discussed his series of consumer conferences, highlighting key metrics he uses in evaluating clients' needs; he also addressed ways that his firm builds trust by encouraging clients to speak to one another at these conferences
    • Focus on the woman of the house, for she is likely to play a larger role in the family finance after this latest downturn

    Core Focus

    • Cut programs that cost money and focus on free or cheap programs that increase innovation

    Legal Risks

    • Mr. Fisher spent considerable time addressing the coming wave of lawsuits that he believes will besiege the financial services industry
      • Statute is five years
      • Most aggressive prosecutors will build up their case files against biggest firms for massive class-action suits
      • Now is the time to invite these prosecutors to upcoming CEO Summits to participate in panel discussions on the current landscape

    Marketing Effects

    • Stick to the core, cut costs, and boost budget
    • Market share is the number one target for Fisher

    Service Formalization

    • Increase service standards in formalized programs for existing and new clients

    Reconsider Employees

    • Cut the less-talented
    • Mr. Fisher shared a program he uses within Fisher Investments to utilize his human capital to increase firm-wide innovation - by paying bonuses to employees who come up with ideas that management has failed to identify
    Tiburon CEO Summit XVI Guest Speaker
    Roger Ibbotson (Professor, Yale University; Chairman, Zebra Capital Management; & Former CEO, Ibbotson Associates)
    Roger Ibbotson (Professor, Yale University; Chairman, Zebra Capital Management, & Former CEO, Ibbotson Associates)

    Roger Ibbotson is Professor in Practice at Yale School of Management and chairman of Zebra Capital Management, a quantitative equity hedge fund manager. He was also the founder & former Chairman of Ibbotson Associates, now a Morningstar Company, where he still serves as an advisor. Professor Ibbotson conducts research on a broad range of financial topics, including investment returns, mutual funds, international markets, portfolio management, & valuation.

    After a brief introduction by Patrick Reinkemeyer (President, Morningstar Associates, Morningstar), Mr. Ibbotson addressed long-term economic growth, current unemployment, and the new U.S. administration. He compared the current economic climate to past bear markets and discussed the role hedge funds have played in the past and will continue to play in the future. Mr. Ibbotson made the following points:

    Hedge Funds & Alternatives Golden Years Ended in 2007

    • 2008 was second-worst stock return year in United States history (1931)
    • Hedge funds down 20%
    • Real estate, private equity, & hedge funds all had high returns & growth in AUM

    Ten Year Returns Still Positive

    • Hedge funds lost about half as much as stock markets in 2008
    • Beta impacted returns, but equity market neutral has low risk
    • Ten year returns still positive, with 2008 (-18.4% & -6.2%) driving 1998-2007 at 9.9% & 6.3% down to 1999-2008 at 7.5% & 4.5% for weighted composite & equity market neutral returns, respectively

    Economy to Fall in 2009

    • Continual job losses
    • A year of negative growth

    Stock Market to See High Volatility & High Returns from Lows

    • Volatility as high as the 1930s
    • Market will bottom at first sign of improvement
    • Large positive stock returns will occur before the recession ends

    Hedge Funds: More Withdrawals in 2009

    • Higher return opportunities
    Tiburon CEO Summit XVI Guest Speaker
    Scott Powers (CEO, State Street Global Advisors)
    Scott Powers (CEO, State Street Global Advisors)

    Scott Powers has served as CEO of State Street Global Advisors since 2008; State Street Global Advisors is the investment management arm of State Street Corporation. He is also a member of State Street's Operating Group, the company's senior-most strategy and policy-making team.

    After a brief introduction by Tony Rochte (Senior Managing Director, Intermediary Business Group, State Street Global Advisors, State Street Corporation), Mr. Powers addressed the ways in which State Street Global Advisors will continue to attract high-net-worth investors. His presentation specifically addressed the challenges of capital preservation in the current market. Mr. Powers made the following points:

    Modern Portfolio Theory Questioned

    • Investors today are seeing absolute negative returns, and the questions are prevalent
    • But nobody knows what to do next, what the alternatives are
    • Clients will pay for the floor and give up some of the upside

    Liability Driven Investment Strategies Receiving Attention

    • Much more of a sense of urgency in conversations surrounding this concept
    • The risk of inflation must be considered
    • Matching liabilities with overlay strategies with growth pockets that add value over time
    • Becoming much more prevalent at the large planned sponsor level because unfunded liabilities become a balance sheet obligation

    Hedge Funds-of-Funds Disappointed Badly

    • Managed volatility and absolute return space has not been a shining light of returns recently
    • How much is skill versus how much is beta that is leveraged?

    Demand for Absolute Return Strategies Strong

    • People are not giving up on hedge funds (uncorrolated sources of return)
    • Focus is on predictability of return

    Many Considering Hiring Fewer Managers with Larger Mandates

    • Handling multiple asset classes
    • Handling multiple outcome oriented strategies
    • Negotiated down to an attractive fee structure
    • If they can deliver alpha, they will be paid hansomely

    Pension Plans Significantly Underfunded

    • The -40% rate of return in the last year has caused a serious problem
    • The portfolios have been de-risked as liabilities have been off-loaded, so at this point, there is a requirement for either greater risk or the injection of new capital

    Value of Investment Consultants Being Questioned

    • Nine style box theory (modern portfolio theory) being questioned
    • Under fire due to their inability (lack of resources) to do adequate research to justify investment decisions
    Tiburon CEO Summit XVI Guest Speaker
    Paul Stevens (CEO, Investment Company Institute)
    Paul Stevens (CEO, Investment Company Institute)

    Paul Stevens has served as CEO of the Investment Company Institute since 2004. He also is a director of ICI Mutual Insurance.

    After a brief introduction by Tif Joyce (President, Joyce Financial Management), Mr. Stevens addressed the state of the mutual funds market, including a review of the historical success of mutual funds’ role in 401K plans since their introduction in 1981. He specifically addressed the relationship between government & business, and how the current economic landscape presents new & unprecedented challenges in retirement planning. Mr. Stevens made the following points:

    Systemic Risk

    • Washington will implement some kind of device to measure this; the Fed lost credibility as it fell asleep in dealing with the early stages of the subprime crisis
    • Congress will most likely opt to assemble a coucil of regulators, perhaps led by the Secretary of the Treasury, with a statutory mandate and an independent staff of its own, working outside of the system, but addressing identified risks through operating regulating agencies

    Regulatory Gaps

    • Unregistered pools
      • Hedge funds & private equity will have to live with new forms of regulation, with perhaps non-public visibility to the regulators, but there seems to be an appetite to go beyond that even
    • OTC derivatives
      • Credit default swaps will incur public action, by making the market more standardized through regular clearing mechanisms subject to oversight
    • Broker/dealer & investment advisor regulations
      • In Washington, issues with fiduciary responsibility are never resolved to a lesser extent
      • Brokers want fee-based business model without having the fiduciary responsibility, but the ICI believes there should be increased harmony between fees & responsibility
      • Suitability has been defined as not completely unsuitable, and that is likely to change

    Municipal securities

    • A very substantial market that ought to have a better regulatory framework to improve disclosure, although this issue is highly political

    Capital Markets Regulation

    • SEC must be re-invigorated, with a staff reorganization, relationships with industry revamped, and active management without a requirement for lawyers

    Desire to Increase Coverage of 401k Plans

    • Continued congressional scrutiny
      • Adequacy
      • Disclosure
      • Targe-date funds
      • Retirement income
    • Auto IRA
    • ICI response
      • Highlight success of 401k system & support ways to improve it
      • Work with Congress and Department of Labor to implement better disclosure
      • Fix social security

    Liquidity Standards

    • Daily & weekly minimum (5% & 20%, respectively)

    Portfolio Maturity Limits

    • Adopt a second WAM calculation

    Enhanced Credit Analysis

    • Prohibit money market funds from investing in second-tier securities

    Client Procedures

    • Understand client requirements
      • Liquidity & redemption needs with respect to concentrated client base

    Board Suspension of Redemptions

    • Recommend the SEC authorize fund boards to suspend redemptions under certain circumstances

    General Session Panel Discussions

    One of the key themes of every Tiburon CEO Summit is the need to more closely listen to clients. In open acknowledgment of the truly unique market conditions created by the 2008 credit crisis, Tiburon CEO Summit XVI included a special general session current events panel in addition to its usual Tiburon CEO Summits' general session panel discussions (Ask the Consumers, Ask the Advisors, & Ask the Gatekeepers). All allowed Tiburon CEO-level clients to hear directly from their constituents in an unvarnished way. This is in sharp contrast to most CEOs' daily activities, where they are forced to rely on interpreting marketing data or listening to anecdotal stories from their sales forces. Addressing these constituents first-hand through questions & answers helps Tiburon clients further consider innovative ideas for serving these different client groups.

    Current Events Panel

    Tiburon CEO Summit XVI Current Events Panel
    Facilitated by Chip Roame
    (Managing Principal, Tiburon Strategic Advisors)
    Tiburon CEO Summit XVI included a special general session panel discussion on the credit crisis. The panel participants included Chuck Baldiswieler (Group Managing Director, Trust Company of the West (TCW)), John Cammack (Head, Third-Party Distribution, T. Rowe Price Group), Steve Deschenes (Chief Marketing Officer, Retirement Income Group, Mass Mutual Financial Group), John Murphy (Chairman, Oppenheimer Funds), & Steve Wallman (CEO, Foliofn), with Chip Roame leading a discussion that focused on current events.
    • Chip Roame opened the discussion by introducing the two objectives of the panel: firstly, to identify the causes & culprits of the credit crisis and secondly, to address how the world will change moving forward (government regulations, products, channels, and mergers & acquisitions activity moving forward):
      • Chuck Baldiswieler addressed on & off balance sheet leverage, derivatives, & lack of oversight as the main culprits driving the crisis, speaking of the 30 to 1 leverage common practices
      • John Cammack addressed ample credit, unbridled securitization, lax regulations, disingenuous rating agencies, and misperception of magnitude & globalization of systematic risk. Mr. Cammack blamed the belief system, and said that the entire financial services industry is at fault for allowing the culture to exist
      • Steve Deschenes pointed to the separation of loan underwriting from financial impact through securitization, speaking specifically to the lack of accountability that occurred with debt packaging
      • John Murphy spoke of freely available credit, government encouragement of Freddie Mac & Fannie Mae, living large (excess ownership & excess speculation), easy securitizations with AAA ratings, & lack of full collateralization
      • Steve Wallman addressed regulatory structures, compensation failures (rewarding returns, ignoring risk), regulatory implementation (when the hundred year flood happens everyone is wiped out), poor governmental responses to the initial housing, & then a broader credit crisis
    • Chip Roame thanked the panelists for answering the first question, then moved on to addressing how the world will change moving forward given the new regulatory environment
      • Chuck Baldiswieler talked about the mergers activity that he sees coming, which will involve more active management than blind investing. He addressed the potential for different types of investments that take advantage of the good assets that remain in the markets. He spoke of the equity promise having been broken, corporate pensions, public pensions, endowments & foundations dealing with liquidity issues, saying that RIAs and family offices will win, with long time horizons and self-regulation
      • John Cammack spoke to increased regulation to control risk, consolidation & better synchronization of oversight, suitability versus fiduciary standard resolution, and higher industry operating costs a byproduct of these steps. He spoke of a large share of US wealth moves into post work mode, fee-based pricing & open architecture trends to continue, ETFs & indexing growing share, and hedge fund industry consolidation. He also spoke of active management broadening to include absolute returns & overlays, and outcome based products eclipsing the role of standalone funds. He talked of a handful of mega distributors dominating, saying that an X factor is more open-access to consumers and financial advisors via the web
      • Steve Deschenes addressed increased regulation, higher taxes, and attempts to reduce the too big to fail issue. He mentioned that existing investment theory (modern portfolio theory) faces pressures with focus on absolute returns, diversification beyond equities, fixed income, & cash, guarantees being more valuable, and tax deferral being more valuable. He spoke of increased focus on transparency, lower fees, & independence. Finally, he mentioned that mergers & acquisitions activity will be based on new regulatory & financial rules
      • John Murphy first encouraged all the attendees in the audience to go to Washington DC to prevent adverse legislation to the industry, saying that government officials really want help in understanding what to do. He spoke of a systemic risk regulator with potentially excess 401K regulation. He spoke of a clearinghouse for credit & derivative instruments (with capital requirements, transparency, & real time reporting), and the implementation of money market working group recommendations. He said that financial advisor focus should be on rebuilding confidence with clients with more financial advisors choosing the independent route to move away from the damaged brands. He said that boutiques will continue to emerge as people leave larger firms and private equity will become major players
      • Steve Wallman talked about the unprecedented spending by government, saying that by saving the big brokerages and propping up the big banks, the government is ensuring that the behaviors that have dominated will likely continue. He talked of the tax burden and debt burden sure to hang over the country for years to come, and said that for all the spending that has occurred not much is actually happening (citing the AIG compensation blow-up that is now buried somewhere in the Senate)

    The panel was extremely frank and the net impression was that regulations are sure to affect the industry in ways that are yet to be determined. There was a common understanding that the culture that has dominated is absurd, and a unanimous opinion that trust between the consumers and the industry should be the main focus of each player in the industry.

    Tiburon CEO Summit XVI Ask the Consumers Panel
    Facilitated by Tif Joyce
    (President, Joyce Financial Management)
    Ask the Consumers Panel

    As has become the tradition at Tiburon CEO Summits, four real and unscripted consumers (Josh, Sonja, Maureen, Keith) were interviewed by facilitator Tif Joyce (President, Joyce Financial Management) for the Ask the Consumers panel. While each provided a unique point of view, a number of common views were shared.

    • Josh works for Cisco Systems and has been investing with his wife for years. He started his first financial advisor relationship based on a personal relationship he had out of high school. He is an active investor who values trust in his advisor more than anything else. He speaks to communications following mistakes, and says he will always go back to the expectations that were laid down in the beginning. He stopped investing his new assets with his first advisor because the management fees were too high, but fees are not the determining factor in how he values the people who invest for him. Part of the reason Josh moved along was because he couldn't be sure that his advisors could do much better than he could. Josh had a very bad experience with a leading national advisory firm where he had asked for a transfer of funds that was not executed, followed by a dip in the market where he lost money. The firm held several different positions as he pursued resolution, and as the decision was levvied against him, he decided not to ever work with that firm again. Josh then talked about what his ultimate goals are, and said they have nothing to do with how well his advisor is doing compared to his advisor's advisor buddy. Josh then addressed a question out of the audience inquiring how he made decisions to move from advisor to advisor, saying that he typically followed advice of his wife, his brother-in-law, his friends
    • Sonja started by saying that she emigrated from Sweden in 1973 with no financial experience at all. Her husband had five businesses that he ran in the United States, and as they traveled she began reading the New York Times financials section, becoming interested in stocks. After a sale of one of her family's companies, she researched the stocks she thought were worthwhile, and chose her investments in 1995. In 2001, her portfolio crashed with the stock market, and then her husband died in 2002. She had been responsible for many of the family's original trading practices, but as the complexity of her portfolio increased with trusts and new investment devices, Sonja decided it would be a good idea to seek professional help. She followed an advisor from Merrill Lynch to Morgan Stanley in 2007, and then, in 2008, when the markets collapsed, she stayed with him. She felt that her advisor was paralyzed as he continued to tell her not to sell, that she should buy Freddie Mac & Fannie Mae, and when she did that and her assets plummeted, she decided to move on. Sonja was asked by an audience member how she made her decision to switch advisors, and she too said that she listed to friends. Her decision was based on her desire to have a more diversified portfolio under the management of an advisor who had a broad view of investments
    • Keith is a financial services industry reporter who has invested for many years, and has chosen to delegate investment responsibilities to advisors based on his desire to maintain a little distance between his own professional interests and his personal financial interests. Keith has invested with several different advisors over time, and began to invest in alternative investments, specifically funds-of-funds and structured notes. Keith is very familiar with financial products and began questioning the wisdom of his financial advisors, and shared his concerns about structured notes with his advisor, specifically about Lehmans structured notes. He continued to question his advisor as the markets worsened. Two weeks before the Lehman bankruptcy, Keith agressively pursued getting out of the structured products notes again. Two major factors were not disclosed to Keith by his advisor: first, he was not told that the structured notes were basically unsecured corporate bonds; second, his advisor never told him that incentives were being provided to sell these structured products. Keith didn't even find out this information from his advisor, but from a lawyer who contacted him looking to sue the large firms. Keith felt wronged by his advisor, but attributes the behavior on a larger scale to the industry on the whole. Keith's trust was broken, and now Keith is looking for a new advisor. He is looking for trust and is therefore seeking referrals from his trusted friends. One of these referrals took him to a new prospect, who in the initial meeting, when hearing about the incentivized structured products sales, asked him - Well, how else are we supposed to make money? Keith has to laugh...
    • Maureen is a retiree with a 401k, with the kids gone & graduated from university. Suddenly, financial conditions changed for her husband's family, as her father- and mother-in-law both started to behave oddly with their investments. Both in their 90s, and living in an assisted living facility, the elderly couple became convinced that they had no more money left. As it turned out ... the elders were not correct about having no money, but their concern speaks to the future nightmare scenarios surrounding increasing healthcare costs that come with the onset of dementia that is becoming increasingly frequent as age expectancy rises

    The panel was extremely frank and the net impression was the most important quality an advisor can have is honesty and clarity of communication. A consumer in today's environment must question the motives and directives of the advisors available, and in response, it is vital that advisors respect their responsibilities to serve their clients' needs above all else.

    Tiburon CEO Summit XVI Ask the Advisors Panel
    Facilitated by Jenn Connelly
    (CEO, JCPR)
    Ask the Advisors Panel

    With a similar goal to the Ask the Consumers panel, four leading financial advisors participated on the Ask the Advisors panel to allow attendees to better understand the businesses and decision-making criteria of financial advisors. Facilitated by Jenn Connelly (CEO, JCPR), the panelists included Tom Lydon (President, ETF Trends), Mark Penske (CEO, United Advisors), Adam Sheer (President, The Roosevelt Group), & Bill Walsh (President, Hennion & Walsh). The financial advisors were selected from different backgrounds and approaches to the industry, providing a wide range of perspectives. Amongst the key points made by the panelists were.

    • Tom Lydon, of Global Trends, maintains 90 client relationships with high-net-worth individuals and maintains asset management responsibilities with tactical allocation via ETFs, all-the-while maintaining a blog called ETFTrends.Com that has begun to take up much of his time. His average clients size is $800,000. Tom spoke about the importance of client management and sang the praises of his blog, which he says makes his clients happy on a day-to-day basis. He told a story about asking his friend, a recent retiree, to perform a jovial & unstructured survey of his clients, which proved to him that he was in good shape. Tom's clients are almost all in equityETFtrends.com
    • Mark Penske, of United Advisors, maintains 1,500 client relationships with mass affluent advisors who maintain $500,000 to $2 million in revenues. His firm offers back-office support & compliance to advisors in the asset management, financial planning, & individual insurance space. His average client size is $500,000. Mark, like Tom, also recognizes the importance of personal touch, and by showing facts to his clients about prior market downturns, Mark's firm is able to maintain trust with his clients. He is attempting to pick up wirehouse advisors, and in so doing is trying to focus on the first impression coming from a primary referral call. Mark's value proposition is on providing support & compliance. Mark spoke of the ever-evolving role of business development departments within financial advisory firms
    • Adam Sheer, of The Roosevelt Investment Group, maintains 10,000 client relationships with high-net-worth individuals, corporations, endowments, foundations, & Taft Hartley plans, and maintains asset management responsibilities. His average client size is $500,000. Adam spoke about maintaining clean lines of communication with custodians, so that that line of communication can be relayed to the end consumers in a way that maintains confidence all the way up & down the supply chain. Responsiveness and flexibility were specifically identified as valuable qualities in custodians. Like Mark, Adam believes very strongly that there are huge numbers of opportunities for idea generation in business development
    • Bill Walsh, of Hennion & Walsh, maintains 15,000 client relationships with mass affluent, unaware high-net-worth individuals, with responsibilities that include fixed income portfolios, asset management, & mutual funds. His average client size is $500,000. Bill's firm has always managed downside risk very well, with a great sales force and good relative performance, doubling assets over the last year from $1.5 billion to $3.0 billion, and is looking for a great liftout opportunity that include cultural & investment synergies$500,000has shared ownership of his own company since entering into the financial services industry as a former engineer. Since 2000, his business has changed its name seven times as a result of being bought and sold several times over. This has given Mr. Pollock a significant perspective on client retention and on building relationships that last. He manages individual customized portfolios including stocks, with a special attention paid to estate and tax planning. With a 98.5% client retention rate, Mr. Pollock also says that constant communication with the client is the only way to go, and that by using trustworthy products and services, clients are empowered to stay with him. Mr. Pollock also added that by always doing the right thing an advisor will always have good clients

    Tiburon CEO Summit attendees valued the opportunity to listen to these advisors candidly discuss some of the strategies they've employed in trying to maintain client relationships and assets under management in these trying times.

    Tiburon CEO Summit XVI Ask the Gatekeepers Panel
    Facilitated by Bill Salus
    (Chief Business Development Officer,
    PNC Global Investment Servicing)
    Ask the Gatekeepers Panel

    In keeping with the Tiburon CEO Summit tradition of emphasizing the need to listen carefully to one's clients and prospective clients, the Tiburon CEO Summit Ask the Gatekeepers panel is the third part of this series. For many Tiburon clients (e.g., investment, insurance, & technology firms), understanding the workings of distribution firms is crucial to their firm's success in gaining access to an organization's network of financial advisors. Wirehouses such as Merrill Lynch, independent broker/dealers such as LPL Financial, and custodians such as The Charles Schwab Corporation can account for 50% or more of financial product companies' sales. Tiburon's Ask the Gatekeepers panel, facilitated by Bill Salus (Chief Business Development Officer, PNC Global Investment Servicing), allowed these types of distribution organizations to discuss their needs from investment management firms and other product providers through questions & answers. Four major distribution firms provided insights on how they serve financial advisors. Panelists included Bill Crager (President, Envestnet Asset Management), Steve Dunlap (Chief Operating Officer, Pershing Managed Account Solutions), AJ Harper (President, Advisor Port, PNC Global Investment Servicing, PNC Financial), & Brian O'Toole (CEO, Genworth Financial Management Wealth Management, Genworth Financial). Amongst their key points were:

    • Bill Crager, of Envestnet Asset Management, runs a turnkey asset management platform supporting a financial advisor force of 14,000 advisors with $60.0 billion in assets under management. Product listing philosophy includes open architecture across a broad range of investment product categories. Needs from products companies include extension of service model for advisors. Bill elaborated by expanding on Jud Bergman's earlier general session presentation description of being analagous to a cable platform that allows many different cable channel to run into a houseExtension of service model for advisorsr
    • Steve Dunlap, of Pershing Managed Account Solutions, runs an open-architecture platform & turnkey asset management provider supporting a financial advisor force of 100,000 advisors with $80.2 billion in assets under management. Product listing philosophy includes comprehensive suite of fee-based and advisory solutions, ranging from firm-directed to fully outsourced. Needs from products companies include transparency, competitive fees, value-added, and consultative sales support. Steve elaborated by indicating that Pershing, being such a ubiquitous firm with so many capabilities, seeks to be involved in gatekeeping across all aspects of the marketplace, specializing on every aspectConsultative sales supportp
    • AJ Harper, of Advisor Port, runs a customizable or turnkey asset management platform and advisory services business, with a financial advisor force of 20,000 advisors with $81.0 billion in assets under management. Product listing philosophy includes designing and implementing custom, open-architecture managed account solutions including award-winning flexible UMA, SMAs, and Fund/ETF wraps. Needs from products companies include integrated service model for advisor development. AJ elaborated by speaking to opportunities that exist in asset re-allocation through advancing technologies, speaking to his firm's responsibility of getting such technologies to market
    • Brian O'Toole, of Genworth Financial Wealth Management, runs a turnkey asset management platform and business consulting business supporting a financial advisor force of 6,500 advisors with $15.0 billion in assets under management. Product listing philosophy includes open architecture platforms including Best of Class Investment Managers as determined by Callan and Rocaton. Needs from products companies include accessibility, proven track record, and disciplined philosophy & processes. Brian elaborated by asking - Who is taking care of people like Joe Wurzelbacher? - as in, what is being done to take care of all those directed funds accounts for the non mass affluent & high-net-worth individual investor markets. Gatekeeping in a nimble way is the question

    The panel added perfectly to the Tiburon CEO Summit's agenda of focusing the CEO-level attendees on client needs. Across the board, the panelists concluded that the current conditions are shaping an environment in which nimble and open-minded gatekeeping will allow recovery for the marketplace and open up new markets for each firm.

    Attendees

    Tiburon CEO Summit XVI had 128 Tiburon client attendees, including:

    • Chip Roame (Managing Partner, Tiburon Strategic Advisors)
    • Chris Alpaugh (Senior Managing Director, Global Business Development, Alliance Bernstein, Axa Group)
    • John Alshefski (Head, Business Development, Investment Manager Services, SEI Investments)
    • David Bailin (President, Alternative Investment Solutions, Global Wealth & Investment Management, Bank of America Corporation)
    • Chuck Baldiswieler (Group Managing Director, TCW Advisor Group, Private Client Services, & Retirement Services Group, Trust Company of the West (TCW), Societe Generale, Asset Management, Societe Generale)
    • Tony Batman (CEO, 1st Global Capital Corporation)
    • Jon Baum (CEO, The Dreyfus Corporation, The Bank of New York Mellon Corporation)
    • Michael Bell (CEO, Curian Capital, Jackson National Life Insurance Company, The Prudential)
    • Jud Bergman (CEO, Envestnet Asset Management)
    • Jessica Bibliowicz (CEO, National Financial Partners)
    • Donna Blank (Chief Financial Officer, National Financial Partners)
    • Stephanie Bogan (CEO, Quantuvis Consulting, Genworth Financial Wealth Management, Genworth Financial)
    • John Cammack (Head, Third-Party Distribution, T. Rowe Price Group)
    • Frank Campanale (CEO, Advanced Equities Wealth Management, Advanced Equities Financial Corporation)
    • Rich Cancro (Managing Director, Product Development, Broker/Dealer & Investment Advisor Services, JP Morgan Chase)
    • Sal Capizzi (Chief Sales & Marketing Officer, Dunham & Associates Investment Counsel)
    • Mitch Caplan (Executive Advisor, Acquiline Capital Partners, Aquiline Holdings)
    • Mark Casady (CEO, LPL Financial)
    • Jerry Chafkin (President, Alpha Simplex Group, Natixis Global Asset Management Alternatives Group, Natixis Global Asset Management, Natixis)
    • Amit Choudhury (Managing Partner, Pinnacle Partners)
    • Randy Ciccati (President, ING Financial Solutions Group, ING Group)
    • Dennis Clark (President, Bellatore Financial, Bellatore)
    • Frank Coates (CEO, Coates Analytics, PNC Global Investment Servicing, PNC Financial)
    • Steve Cohen (Chief Strategy Officer, Pro Funds Group)
    • Kip Condron (CEO, Axa Financial, Axa Group)
    • Jenn Connelly (CEO, JCPR)
    • Chris Cordaro (CEO, Regent Atlantic Capital, Fiduciary Network)
    • Ron Cordes (Co-Chairman, Genworth Financial Wealth Management, Genworth Financial)
    • Bill Crager (President, Envestnet Asset Management)
    • Ben Cukier (Partner, FTV Capital)
    • Wayne Cutler (Managing Director, Brokerage, Novantas)
    • Jim Dario (Chief Growth Officer, Pershing Advisor Solutions, Pershing, The Bank of New York Mellon Corporation)
    • Pete D'Arrigo (Chief Financial Officer, Envestnet Asset Management)
    • Dick Davies (Senior Managing Director, Defined Contribution, Alliance Bernstein Institutional Investments, Alliance Bernstein, Axa Group)
    • Scott Davis (CEO, Essex National Securities, Addison Avenue Federal Credit Union)
    • Joe Deitch (Chairman, Commonwealth Financial Network)
    • Stuart DePina (CEO, Tamarac)
    • Steve Deschenes (Chief Marketing Officer, Retirement Income Group, Mass Mutual Financial Group)
    • Steve Dowden (CEO, CUNA Brokerage Services, CUNA Mutual Group)
    • Jeffrey Dunham (CEO, Dunham & Associates Investment Counsel)
    • Steve Dunlap (Chief Operating Officer, Pershing Managed Account Solutions, Pershing, The Bank of New York Mellon Corporation)
    • Randy Epright (Chief Operating Officer, AIG Advisor Group, American International Group, (AIG))
    • Wayne Ferbert (CEO, Tenbagger, TD Ameritrade, TD Bank Financial Group)
    • Ken Fisher (CEO, Fisher Investments)
    • Ron Fiske (Executive Vice President, Product Development & Management, Fidelity Institutional Wealth Services, Fidelity Investments)
    • Bill Franca (Executive Vice President, Distribution, Direxion Funds, Rafferty Holdings)
    • George Gatch (CEO, JP Morgan Funds Management, JP Morgan Asset Management, JP Morgan Chase)
    • Mike Gianoni (President, Fiserv Investment Services, Fiserv)
    • Al Girod (President, Convergent Wealth Advisors, Convergent Capital Management, City National Corporation)
    • Bill Glavin (CEO, Oppenheimer Funds, Mass Mutual Financial Group)
    • Rich Goldman (CEO, Security Global Investors, Security Benefit Group)
    • Jeffrey Goldstein (Managing Director, Hellman & Friedman)
    • Jennifer Grancio (Head, Distribution, iShares Americas, Intermediary Investor Business, Barclays Global Investors, Barclays)
    • Larry Greenberg (CEO, Jefferson National Financial)
    • Matt Grove (Executive Vice President, Business Development, Jefferson National Financial)
    • Jim Hale (Founding Partner, FTV Capital)
    • Scott Hanson (Co-CEO, Hanson McClain)
    • AJ Harper (President, Advisor Port, PNC Global Investment Servicing, PNC Financial)
    • Jim Hays (President, Private Client Group, Wachovia Securities, Wachovia Corporation, Wells Fargo Corporation)
    • JoNell Hermanson (President, M Financial Wealth Management, M Financial Group)
    • Tom Hexner (Executive Vice President, Bernstein Global Wealth Management, Axa Group)
    • Rich Hughes (Group Co-President, Portfolio Management Consultants, Envestnet Asset Management)
    • Robert Hussey (Executive Vice President, Wealth Solutions & Global Relationships, Natixis Global Associates, Natixis Global Asset Management, Natixis)
    • Roger Ibbotson (Professor, Yale University; Chairman, Zebra Capital Management; & Former CEO, Ibbotson & Associates)
    • Dwight Jacobsen (Executive Vice President, Intermediary Distribution, MSBC Securities Corporation, The Dreyfus Corporation, The Bank of New York Mellon Corporation)
    • Alistair Jessiman (Managing Director, Wealth Management, Novantas)
    • David Jobson (Executive Vice President, Product Development, US Retail, Allianz Global Investors, Allianz)
    • Henry Johnson (Co-CEO, Fiduciary Trust Company International, Franklin Templeton Investments, Franklin Resources)
    • Tom Johnson (Head, Strategic Institutional Business Development, Mass Mutual Financial Group)
    • Tif Joyce (President, Joyce Financial Management)
    • Geoff Kalish (Co-Founder, Aquiline Capital Partners, Aquiline Holdings)
    • Atul Kamra (President, First Clearing Correspondent Services, Wachovia Securities, Wachovia Corporation, Wells Fargo Corporation)
    • Dan Kreuter (CEO, DAK Associates)
    • Peter Kris (Partner, Brazos Capital Management, American International Group, (AIG))
    • Stephen Langlois (Executive Vice President, Strategic Development, LPL Financial)
    • Charles Lowrey (CEO, Prudential Investment Management, Prudential Financial)
    • Tom Lydon (President, Global Trends Investments)
    • Doug Mangini (Chief Operating Officer, Retail & Intermediary Business, Morgan Stanley Investment Management,Morgan Stanley, Mitsubishi UFJ Financial Group)
    • Pete Martin (President, Institutional Services, Natixis Global Asset Management, Natixis)
    • Bill McDermott (Executive Vice President, Corporate Markets, Axa Equitable Life Insurance Company, Axa Group)
    • Jim Minnick (President, Lovell Minnick Partners)
    • Sanjiv Mirchandani (President, National Financial Services, Fidelity Investments)
    • Ed Morrison (Chief Operating Officer, Albridge Solutions, PNC Global Investment Servicing, PNC Financial)
    • Mike Mulcahy (President, Bridgeway Funds, Bridgeway Capital Management)
    • Patrick Mulvey (Head, Global Sales & Marketing, Rogers Casey)
    • John Murphy (Chairman, Oppenheimer Funds, Mass Mutual Financial Group)
    • Nicole Newlin (Chief Operating Officer, Loring Ward Group)
    • Karen Novak (Chief Operating Officer, Pershing Advisor Solutions, Pershing, The Bank of New York Mellon Corporation)
    • Harry O'Mealia (CEO, Legg Mason Investment Counsel, Legg Mason)
    • Andy O'Rourke (Head, Marketing, Direxion Funds, Rafferty Holdings)
    • Brian O'Toole (CEO, Genworth Financial Management Wealth Management, Genworth Financial)
    • Tim Ouimet (President, MyWorld Investing)
    • Patrick Pagni (Executive Vice President, Trust Company of the West (TCW), Societe Generale Asset Management, Societe Generale)
    • Mark Penske (CEO, United Advisors)
    • James Poer (CEO, NFP Securities, National Financial Partners)
    • Alex Potts (CEO, Loring Ward Group)
    • Scott Powers (CEO, State Street Global Advisors, State Street Corporation)
    • Andy Putterman (CEO, Fortigent, Lydian Trust Company)
    • Matt Raynor (Executive Vice President, Sales, Natixis Global Associates, Natixis Global Asset Management, Natixis)
    • Patrick Reinkemeyer (President, Morningstar Associates, Morningstar)
    • Neal Ringquist (President, Advisor Software)
    • Tony Rochte (Senior Managing Director, Intermediary Business Group, State Street Global Advisors, State Street Corporation)
    • Jake Rohn (Executive Vice President, Corporate Development, Albridge Solutions, PNC Financial)
    • Jim Ross (President, SSGA Funds Management, State Street Global Advisors, State Street Corporation)
    • Bill Salus (Chief Business Development Officer, PNC Global Investment Servicing, PNC Financial)
    • Michael Sapir (CEO, Pro Funds Group)
    • Peter Schaffer (Chief Operating Officer, Zebra Capital Management)
    • Ken Schapiro (President, Condor Capital Management, Nationwide Mutual Insurance Company)
    • Bill Schreiner (Executive Vice President, Foliofn)
    • Skip Schweiss (President, TD Ameritrade Trust Company, TD Ameritrade, TD Bank Financial Group)
    • Sandeep Sharma (Executive Vice President, Product Strategy, MyWorld Investing)
    • Adam Sheer (President, The Roosevelt Group)
    • Jamie Shepherdson (Executive Vice President, Wholesale Distribution, Axa Equitable, Axa Group)
    • Tom Sholes (Executive Vice President, Strategic Planning & Global Product Management, PNC Global Investment Servicing, PNC Financial)
    • David Smith (Group Publisher, Financial Advisor & Private Wealth Magazines, Charter Financial Publishing Network)
    • Anne Steer (Executive Vice President, Relationship Management, National Financial Services Corporation, Fidelity Investments)
    • Paul Stevens (CEO, Investment Company Institute)
    • Allen Thorpe (Managing Director, Hellman & Friedman)
    • Frank Trotter (President, Ever Bank Direct, Ever Bank Financial)
    • John Tyers (President, Broadcourt, Bank of America Merrill Lynch, Bank of America Corporation)
    • Enrique Vasquez (CEO, Genworth Financial Investment Services, Genworth Financial)
    • Greg Vigrass (President, Foliofn Institutional, Foliofn)
    • Craig Walling (CEO, Private Banking, Wealth Management US, UBS)
    • Steve Wallman (CEO, Foliofn)
    • Bill Walsh (Chief Investment Strategist, Hennion & Walsh)
    • Elliot Weissbluth (CEO, High Tower)
    • Scott Welch (Senior Managing Director, Investment Research & Strategy, Fortigent, Lydian Trust Company)
    • Janine Wertheim (President, Securities America Advisors, Securities America, Ameriprise Financial)

    Media Representatives

    Tiburon CEO Summit XVI also welcomed six Tiburon select media attendees, including:

    • Marion Asnes (Editor-in-Chief, Financial Planning Magazine, Source Media)
    • Pam Black (Editor-in-Chief, Bank Investment Consultant, Source Media)
    • Kristen French (Managing Editor, Registered Rep, Penton Business Media, Penton Media)
    • David Geracioti (Editor-in-Chief, Registered Rep, Penton Business Media, Penton Media)
    • Keith Girard (Reporter, The Improper)
    • John Morgan (Senior Editor, Money Management Executive & Annuity Market News, Source Media)

    Also in attendance for Tiburon CEO Summit XVI was Tiburon employee Tudor Jones (Director, Business & Marketing).

    Tiburon CEO Summit XV: October 14-15, 2008

    Tiburon CEO Summit XV was held October 14-15, 2008 at the Ritz Carlton Hotel in San Francisco, CA. Tiburon CEO Summit XV started at 7:45am on Tuesday, October 14, included a networking dinner that evening in Tiburon, and concluded at 4:15pm on Wednesday, October 15. Over 100 senior industry executives took two days out of their busy schedules to participate. Chip Roame (Managing Partner, Tiburon Strategic Advisors), Bruce Bond (CEO, Power Shares), Bill Hambrecht (CEO, WR Hambrecht + Company & Former CEO, Hambrecht & Quist), Norm Malo (CEO, National Financial Services Corporation), Joe Mansueto (CEO, Morningstar), & Andrew Rudd (CEO, Advisor Software & Former CEO, Barra) made general session presentations. Four general session panel discussions included a consumers panel, an advisors panel, a manufacturers panel, & a special general session panel discussion addressing the credit crisis.

    Tiburon's CEO Summit XV was held October 14-15, 2008 in San Francisco, CA

    Opening Keynote Presentation:
    Chip Roame (Managing Principal, Tiburon Strategic Advisors)

    Tiburon & the Tiburon CEO Summits Vision & History

    Mr. Roame outlined Tiburon's core businesses, offered a brief overview of the vision behind the Tiburon CEO Summits, & thanked the Tiburon CEO Summit XV sponsors:

    • Tiburon's core businesses include Research Reports & Research Report Access Program, Market Seminars & Conference Speeches, Market Research & Strategy Consulting Projects, & Advisory Board Roles
      • Tiburon manages its research in terms of Power Point pages created & added to it's expanding library of knowledge, including mutual funds distribution, separately managed account programs, alternative investments, wealth management services, insurance products, banking services, the fee-based financial advisor market, the CPA firm market, the family office market, & various international markets
      • Mr. Roame suggested that Tiburon executes projects from a top down perspective, working closely with its clients' top executives
      • While only serving financial services clients, Tiburon's clients also include technology companies that serve financial services companies, other consulting firms in need of financial services industry research, venture capital & private equity firms investing in financial services companies, & governments, trade groups, & conference companies. Mr. Roame presents at dozens of board meetings each year
    • Tiburon's CEO Summits were created in 2001 after Mr. Roame noted the lack of CEO-level interaction across traditional industry lines and yet saw the consistency of issues being addressed by these same executives
      • Tiburon's CEO Summits have evolved from a just a handful of industry colleagues meeting in Tiburon to 100+ CEO-level Tiburon clients attending two day conferences at the Ritz Carlton Hotel in San Francisco, CA & New York, NY
      • Mr. Roame reiterated the two themes of all Tiburon CEO Summits - Challenging Conventional Wisdom & Maintaining a Consumer Orientation
    • Mr. Roame thanked the Tiburon CEO Summit XV sponsors, including Advanced Equities Financial Corporation, Advisor Software, Broadridge Financial Solutions, Dunham & Associates (Dunham Funds), Envestnet Asset Management, Fidelity Investments (National Financial Services Corporation), Fiserv (Check Free Investment Services), Foliofn (Foliofn Institutional), Genworth Financial (Genworth Financial Wealth Management), JC Public Relations, State Street Corporation (State Street Global Advisors), TD Ameritrade (TD Ameritrade Institutional), The Bank of New York Mellon Corporation (Pershing Advisor Solutions), & The Charles Schwab Corporation (Schwab Institutional) whose financial support allow the CEO Summits to be held at the Ritz Carlton Hotel and attendance to be open to 100+ CEOs

    Tiburon CEO Summit XV Agenda

    Mr. Roame thanked the five terrific guest speakers, giving brief insights into each general session presentation to come, highlighted the general session panel discussions, & introduced three new features, including an expanded break-out session schedule, a current events (credit crisis) panel, & a Tiburon question & answer session:

    • Mr. Roame thanked the five terrific guest speakers, including Bruce Bond (CEO, Power Shares), Bill Hambrecht (CEO, WR Hambrecht + Company & Former CEO, Hambrecht & Quist), Norm Malo (CEO, National Financial Services Corporation), Joe Mansueto (CEO, Morningstar), & Andrew Rudd (CEO, Advisor Software; Chairman, Advisor Partners; & Former CEO, Barra) and offered insights into what each speaker would address, including the history & growth prospects of ETFs, an overview of the internal politics surrounding the Economic Stabilization Act, the changing landscape of distribution & clearing, including an overview of a new product, the interesting growth story of Morningstar, a company with broad exposure across the financial services industry, & interesting opportunities now presenting themselves in alternative investments, respectively
    • Mr. Roame then highlighted the set of three general session panel discussions with the Ask the Consumers Panel (Moderated by Dennis Clark, Advisor Partners) asking what consumers want from their financial advisors & institutions, the Ask the Advisors Panel (Moderated by Skip Schweiss, TD Ameritrade) considering product and sales & marketing trends, the use of technology, & succession planning issues, & the Ask the Manufacturers Panel (Moderated by Tim Armour, Janus Capital Group) addressing product & channel flows and new products under development
    • Mr. Roame took a moment here to thank the Tiburon CEO Planning Committee, including Tim Armour (Janus Capital Group), Dennis Clark (CEO, Advisor Partners), Tif Joyce (President, Joyce Financial Management), Tom Lydon (President, ETF Trends), Scott MacKillop (President, Frontier Asset Management), Kevin Malone (President, Greenrock Research), Skip Schweiss (President, TD Ameritrade Trust Company), & Gib Watson (CEO, Prima Capital Holdings)
    • Mr. Roame then discussed three new features of Tiburon CEO Summit XV:
      • Break-out sessions expanded from three to six sessions spread over two days
      • Because of today's relatively unique situation, a special current events panel was put on the agenda to address the credit crisis
      • A Tiburon question & answer session to discuss Tiburon research and/or moderate open discussion was added to open Day Two

    The News: The Credit Crisis & the Upcoming Presidential Election

    In a departure from past Tiburon CEO Summit Opening Keynote Presentations, Mr. Roame avoided a broad synopsis of the last six months of news to instead address the specific topic on everyone's mind: the news, including the credit crisis & the upcoming presidential election. Mr. Roame wasted no time in getting to the root causes & growing magnitude of the crisis, the effects on financial services industry giants, the response thus far, & a bigger picture perspective:

    • The root causes of the credit crisis included artificially low interest rates & the rapid growth in subprime mortgages, with outstanding subprime loans more than doubling from $600 billion in 2006 to $1.3 trillion in 2007
    • An amazing 41% of subprime mortgages were granted without full documentation, up from 22% in 1999, with Mr. Roame pointing out that these loan applications misstated income
    • Subprime & other non-prime mortgages account for over 90% of all resetting mortgages in 2007 & 2008
    • Hence, it is pretty easy to conclude that the intersection of adjustable rates & subprime mortgages was a disaster waiting to happen
    • Over one-quarter of subprime adjustable rate mortgages are now 90 days or more past due, up from 5% to 10% in 2002 to 2006
    • The GSEs became the big buyers of mortgages, purchasing almost two-thirds of mortgage originations, up from a low of 33% in 2006
    • Meanwhile, the commercial & investment banks transformed themselves into packagers of products, with collateralized debt obligations issuances increasing rapidly to $310 billion, up 100% since 2005
    • Hence, subprime write-offs have been staggering, led by those at UBS, Merrill Lynch, & Citigroup, with $37.1, $25.1, & $23.9 billion respectively
    • Mr. Roame noted that various observers blame consumers (misstated income), commercial banks (knowingly made bad loans), investment banks (over-leveraged), & the US government (did nothing) for the credit crisis ...
    • And said that the bailout strategy was established in March 2008 when Bear Stearns went under and Bernanke was quoted as saying the Federal Reserve action was "necessary to sustain the viability of the American financial system"
    • Lehman Brothers lost 80% of its value, falling from $28 billion to just $6 billion and causing big hits for Alliance Bernstein ($476 million) & other large shareholders
    • The failure of Washington Mutual was the largest bank collapse in United States history and Texas Pacific Group took a huge loss on its $2.0 billion investment made in April
    • Wachovia Corporation's value has sunk to an amazing low, even less than the $25 billion it had paid for Golden West Financial
    • The five largest US government bailouts have all been of financial services companies, including four this year
    • Mr. Roame noted that there has been significant skepticism regarding giving more power to the government, with one past CEO Summit attendee saying "when you look at the quality of the people attracted to the Federal Reserve, I do not want them to have any more power"
    • The stock market has declined sharply in 2008, with the indices being down 30% to 38% at one point
    • While overall hedge funds have outperformed global markets in 2008, many large hedge funds have got clobbered
    • Mr. Roame presented a slide including logos of financial services firms brought down this year that could have easily made up the leaders board recently
    • There have been 760,000 jobs lost in 2008, the biggest loss since 2001
    • Mr. Roame reminded attendees that the bigger picture public policy issue here is the threat to baby boomers' ability to retire as the losses in real estate equity will challenge the liquidation
    • There were a few winners, including Bank of America Corporation, JP Morgan Chase, & Wells Fargo Corporation, as well as those consumers who use oil
    • Mr. Roame said that Senator Obama will be elected President in November, due in large part to the current economy, briefly mentioning the so-called Bradley effect as a possible obstacle to this eventuality
    • In keeping with the honest & balanced perspective adhered to at Tiburon CEO Summits, Mr. Roame reminded attendees that some had it even worse than any of us (Eliot Spitzer & OJ)

    A Step Back: A Reminder About Fundamental Industry Trends

    Mr. Roame then brought attention away from the immediate news noise and back to the long-term fundamental industry trends, presenting some high-level Tiburon research findings:

    Fundamental Trends

    • US households control almost three-quarters of all investable assets, two-thirds of that invested via financial advisors
    • More than half of consumer households have less than $100,000 of investable assets, with 28% having less than $10,000
    • Baby boomers are not saving the traditional way, with negative savings starting in 2005 and continuing in 2006 & 2007
    • Only 2% of baby boomers will receive an inheritance of more than $100,000
    • Even more critical is the fact that more than half of 65 year old males will reach age 85 and over one-third will reach 90
    • Mr. Roame took a moment here to point out that the commonly held life expectancy of ~77 years is therefore meaningless, as it fails to take into account the fact that those who reach retirement age will out-live the projected retirement period and go broke
    • Baby boomers' pending retirement will drive more assets into the investable assets market

    Products & Services

    • Mr. Roame mentioned the media noise surrounding the so-called next big thing, then pointed out that mutual funds are still the dominant investment product with $12 trillion AUM, giving an account of the daily telephone call he receives from reporters asking when ETFs will surpass mutual funds in AUM
    • Mr. Roame paused here to point out that perspective must be maintained when everybody is focusing on percentages, saying that his clients are generally "seeking dollars, not percentage points"
    • Mutual fund net flows still lead those of other investment products with $243 billion in 2007, more than hedge funds & ETFs with $195 billion & $151 billion, respectively
    • Packaged fee-account assets have grown substanially over the past eight years to over $1.5 trillion
    • The movement in the wirehouses is to unified managed accounts & broker wrap accounts
    • More broadly, the investment process is being polarized with twin growth patterns in both market-linked products & alternative investments
    • Exchange traded funds are the most significant product development since mutual funds in the 1940s, showing growth in excess of 30% year-to-year between 2002 & 2007, when assets reached $608 billion
    • US hedge funds assets under management have also grown significantly to almost $2.0 trillion
    • Mr. Roame said that if none of these invesments seems to work, one could start a winery like everyone else, showing that as of 2007, there are almost 6000 US wineries, almost three times as many as in 2000
    • 14% or 40 million Americans lack health care insurance
    • Annuities seem to be being misused, with 79% of annuities sales in 2006 really being existing policy transfers (1035 exchanges)

    Markets & Distribution Channels

    • On the channel side captive brokers & retail banks have historically dominated control of consumer investable assets
    • But independent advisors collectively continue to outgrow the competition, growing at 18% annually between 1995 & 2007
    • Mr. Roame mentioned the many "experts" predicting the mass flood to independence, but said it is not happening, showing that only 2% of financial advisors are actually breaking away and describing a carousel of brokers moving within the wirehouses & other captive channels

    Strategic Conclusions

    • Strategically, the independent broker/dealers have been in their second round of consolidation, with LPL, Advanced Equities, Ameriprise Financial & Securities America, & Ladenburg Thalmann having already made considerable acquisitions
    • Mr. Roame pointed to retail banks showing that they constitute nearly two-thirds of the financial services sector's market capitalization and hence will be the most frequent buyers
    • Although capital has gone scarce in private equity, financial services companies present a big opportunity and there may be many forced sellers
    • Organically, the biggest growth is in the fee-based financial advisors, with Schwab Institutional heading towards $1.0 trillion in about three years
    • Surprising to many, the discount brokers are also doing well, rapidly shifting to models of generating their revenues from advice
    • For product companies, it is worth noting that non-US mutual funds assets under management have surpassed those of US mutual funds, crossing the 50% threshhold in 2006 and continuing to increase market share

    Semi-Annual Tiburon Broad (& Sometimes Risky) Predictions

    After concluding his opening remarks on the state of the industry, Mr. Roame spent a few moments addressing what the next six months might hold:

    • Earnings season will be ugly; subprime write-offs will double in size
    • Obama will win
    • Stimulation plans will accelerate in early 2009 with the Democrats controlling all of Washington (and the media)
    • ETFs will battle mutual funds for the lead in flows, leaving separately managed accounts behind
    • More brokers will head for the exits (more lift-outs coming) but still look for no more than a 2% to 4% attrition rate
    • LPL will acquire the AIG broker/dealers, creating the first 20,000 financial advisor force (and then will go public)
    • Morgan Stanley will sell out to a bank and/or spin-off its reps
    • UBS will spin-off its investment bank & refocus on its private banking franchiseUBS will spin-off its investment bank & refocus on its private banking franchise

    Guest Presentations

    Aside from Tiburon Managing Partner Chip Roame's opening keynote presentation, five guest presentations anchored the CEO Summit XV agenda:

    CEO Summit XV Guest SpeakerBruce Bond (CEO, Power Shares)

    Bruce Bond (CEO, Power Shares)

    Bruce Bond founded Power Shares Capital Management in 2003 to deliver investment performance through the benefit-rich ETF structure. Mr. Bond has received numerous awards for his pioneering achievements, including being named as the Greatest Contributor to the ETF Industry at the Global ETF Awards in 2005, 2006, & 2007. Mr. Bond was recently appointed as the inaugural chairman of the Board of Governors of the ICI ETF Industry Committee, the only executive level ETF industry group. Mr. Bond’s 2006 sale of Power Shares Capital Management to Invesco created a heightened understanding of the value of ETF companies around the globe, with resulting enthusiasm later referred to as the Bond Effect.

    After an introduction by Tom Lydon (President, Global Trends Investments), Mr. Bond took center stage to address the history of Power Shares and the deal with Invesco, as well as some of the growth prospects of ETFs, including a specific focus on intelligent ETFs. Mr. Bond made the following points:
    • Mr. Bond thanked Mr. Lydon, expressed his positive impression with his first visit to the Tiburon CEO Summits, & immediately began his presentation by talking about the fact that ETFs have fared remarkably well during the current crisis, pointing out that the market conditions will accelerate ETFs usage by financial advisors
    • Mr. Bond presented a map of the world, introduced the cross-listing potential of ETFs, pointing out that global 24 hour trading is on the horizon, & inferred that the exchanges are aiming to change the way financial products are distributed, with the exchanges being used more & more to deliver products to the marketplace
    • Mr. Bond mentioned that 34% of September's volume of trading on the US exchanges was in ETFs & said that the reason they are being used so much is because they mitigate volatility
    • Mr. Bond presented a slide showing that the proliferation of ETFs now is nowhere near the proliferation of mutual funds during their growth period, pointing out that an average of 440 mutual funds per year were added to the market at the time; Mr. Bond said he did not believe that such proliferation would occur with ETFs, but that this is an interesting time to be watching as many new providers enter the marketplace
    • Mr. Bond showed that ETFs flows outpaced mutual funds flows in the US; three of the top four leading investment companies, in terms of flows, are Vanguard, Barclays, & State Street Global Advisors, all with large ETFs divisions
    • Mr. Bond presented a slide showing the results of a survey in which the mindset of the financial advisor is increasingly in favor of ETFs as the most important asset in a client's portfolio, growing from 11.5% to 15.7% from 2006 to 2007
    • Mr. Bond said that ETFs growth will continue to accelerate for seven reasons, including low expenses, tax efficient framework (lacking capital gain distributions), intraday liquidity (provides flexibility in volatile markets), transparency, open-share structure, trading near or at NAV, & opportunity for diversification, and pointed out that Power Shares believes that four factors will contribute, including conversion rates among financial professionals, rapid growth of fee-based advisory platforms, increasingly sophisticated asset allocations, & breaking into retirement products markets
    • Mr. Bond then introduced the Power Shares expertise in models including intelligent indexing & active ETF profiling, pointing out that since its initial product launch in May 2003, the firm has seen explosive asset growth as it has rapidly expanded its product line
    • Mr. Bond mentioned that the Invesco takeover brought legitimacy to the brand and to the ETF model because Invesco understood that the business model really did deliver added value and was fully scalable

    CEO Summit XV Guest Speaker Bill Hambrecht (CEO, WR Hambrecht + Company & Former CEO, Hambrecht & Quist)

    Bill Hambrecht (CEO, WR Hambrecht + Company & Former CEO, Hambrecht & Quist)

    Bill Hambrecht founded WR Hambrecht + Company in 1998, introducing OpenIPO® as a means to level the playing field for both investors and issuers. In 1968, Mr. Hambrecht co-founded Hambrecht & Quist, an investment banking firm specializing in emerging high-growth technology companies. Mr. Hambrecht has served as a director for numerous private and public companies. He currently serves on the Board of Trustees for The American University of Beirut and is on the Advisory Investment Committee to the Board of Regents of the University of California.

    After an introduction by Chip Roame (Managing Partner, Tiburon Strategic Advisors), Mr. Hambrecht gave an overview of the internal politics surrounding the Economic Stabilization ACT, having just returned from Washington, DC where he had been meeting with speaker of the house Nancy Pelosi. Mr. Hambrecht made the following points:

    • Mr. Hambrecht started by pointing out that Secretary of the Treasury Henry Paulsen had wanted carte blanche with the $700 billion that had been proposed, but that Ms. Pelosi wanted certain stipulations, including to only buy paper at market value, thereby maintaining capital in banks; for all parties, the speed of recovery was a main factor in the decisions that were made
    • Mr. Hambrecht identified one idea that had arisen at the meeting that would address the housing crisis, thereby creating stability: if a homeowner who holds a $500,000 mortgage on a property currently valued at $400,000 is offered a new mortgage at a manageable payment plan (90% LTV or $360,000), the lender should receive equity in the property representing the percentage of debt forgiveness -- should the property appreciate, that equity would rise in value as well, and the lender would eventually be made whole - a debt for equity swap for mortgages; favoring this failed proposition, Mr. Hambrecht thought that the crisis mentality had been responsible for some poorly considered solutions that did gain traction
    • Mr. Hambrecht said that the results of the crisis would include a regulatory climate (saying that nobody had suffered penalties in the self-regulatory era), increased transparency, & leverage limits
    • Mr. Hambrecht then addressed some of the reasons for the crisis, including fundamental changes in the securities businesses & the rapid introduction of technologies, the combination of which drastically narrowed margins and created a perceived need to leverage more & more, which was in its own right a flawed concept
    • Mr. Hambrecht said the winners coming out of the crisis will include the service & commercial banks with captive bases, low variable overhead, & old style business models

    CEO Summit XV Guest Speaker Norm Malo (CEO, National Financial Services Corporation)

    Norm Malo (CEO, National Financial Services Corporation)

    Norm Malo is CEO of National Financial Services Corporation, a Fidelity Investments company. Fidelity Investments is the largest mutual fund company in the United States, a primary provider of workplace retirement savings plans, & a leading online brokerage firm.

    After an introduction by Skip Schweiss (Chief Operating Officer, TD Ameritrade Trust Company), Mr. Malo addressed key changes to the landscape of distribution & clearing, including an overview of a new product. He made the following points:

    • Mr. Malo said that now is a very dynamic time in the clearing business, with so many players in the clearing game changing ownership, three of the top four clearing businesses in play are now owned by banks, with National Financial Services Corporation being the only exception
    • Mr. Malo went on to talk about how the new marketplace affects those with relationships to clearing businesses, saying: broker/dealers are concerned with re-defining value proposition in the market, regulations & efficiencies, & recruiting top talent; brokers & advisors are concerned with taking ownership of their clients; and investors are concerned with integrity & safety of investments
    • Mr. Malo then talked specifically about the factors that have contributed to changes within Fidelity's clearing business, including price compression, technology complexity, & regulatory demands, all of which have caused the ongoing evolution of helping brokers & advisors
    • More specifically, five years ago, broker/dealers said stay away from my brokers; now, broker/dealers say help me train my brokers
    • Mr. Malo showed that fully-disclosed clearing providers have decreased from 150 in 1990 to 26 in 2008 and ventured to guess that they would decrease to 16 by 2010, saying that price compression has been driving the need to provide increasingly complex technology for added value
    • Revenue streams have shifted from transaction tickets to other sources of fee-based services, all of which help broker/dealers & financial advisors provide added value to their clients
    • Fidelity used to build everything themselves, but ten years ago they went in the direction of nurturing relationships with top providers of new technologies
    • The question was raised as to how the new Hybrid One product came into being, to which Mr. Malo answered that the reality is that while RIAs were transacting outside of National Financial & National Financial clients were doing fee-based business outside of Institutional Wealth Services, Fidelity saw an opportunity to put a product out there that would help the advisor put their business where it is most valuable

    CEO Summit XV Guest Speaker Joe Mansueto (CEO, Morningstar)

    Joe Mansueto (CEO, Morningstar)

    Joe Mansueto founded Morningstar in 1984. He served as CEO from the company’s inception to 1996 and from 2000 to present. In 2001, Mr. Mansueto was recognized by Smart Money magazine as one of 30 power brokers. He received the Distinguished Entrepreneurial Alumnus Award from the University of Chicago Graduate School of Business in 2000.

    After an introduction by Tim Armour (Board Member, Janus Capital Group), Mr. Mansueto shared the interesting growth story of Morningstar, a company with a broad exposure across the financial services industry. He made the following points:

    • Mr. Mansueto thanked his former colleague at Morningstar, Tim Armour, for the introduction. He then began his presentation by saying that Morningstar was founded with a mission of independence, proven by the fact that it is the only rating agency that performs its ratings before selling them
    • Mr. Mansueto talked about building his business by applying the theory of stock analysis to mutual funds, believing that his audience would be investors, but soon realizing that financial advisors made up the majority of his clients
    • After presenting the dramatic growth rates of Morningstar over the last 25 years, Mr. Mansueto addressed the future, by talking about five big trends shaping the financial services industry, including the rapid globalization of investment management, the demographic shifts driving the need for lifetime advice, the push for simple portfolio solutions for investors, the mutual fund alternatives outpacing the growth in old-line funds, & the shaken mindset of investors due to recent market turmoil, leading them to search for trusted partners
    • Mr. Mansueto said that analysis of the rapid globalization of investment management leads to several key learnings about global markets, including acceptance that advisors dominate global fund sales (either independent advisors or captive advisors), investors seek simpler solutions than in the US, the world is moving to open architecture solutions, the self-directed individual investor is starting to emerge in some markets, and both US & local expertise are needed to succeed abroad
    • Mr. Mansueto discussed the intersection of human capital & financial capital, saying that this analysis is of ultimate importance when thinking about the demographic shifts & lifetime advice, pointing out that different equity allocations are needed for different clients
    • Regarding the simplification of portfolios, Mr. Mansueto discussed the growth of funds of funds, the rapid growth of target date & target risk funds, and the implications of these two factors to portfolio managers who manage across multiple asset classes while building diversified portfolios
    • Mr. Mansueto discussed the growth of alternatives, including hedge funds & ETFs, showing data on flows & projected growth rates, echoing Mr. Roame's claim that it will be a long time before mutual funds do not dominate the market
    • In addressing the current market conditions and the effects on investors, Mr. Mansueto talked about the value of businesses that focus on doing the right thing, and segued into the building of a business culture at Morningstar based on a casual atmosphere driven by sound ethics

    CEO Summit XV Guest Speaker Andrew Rudd (CEO, Advisor Software; Chairman, Advisor Partners; & Former CEO, Barra)

    Andrew Rudd (CEO, Advisor Software; Chairman, Advisor Partners; & Former CEO, Barra)

    Andrew Rudd founded Advisor Software in 1995 to provide solutions which enable financial institutions & investment advisors to improve the quality & delivery of investment advice. Advisor Software’s most recent product, ASI Wealth Manager, is a goal-driven investment planning platform that couples institutional-caliber analytics & holistic management of the household balance sheet to deliver richer, more personalized advice than is currently available to a wide range of investors.

    After an introduction by Chip Roame (Managing Partner, Tiburon Strategic Advisors), Mr. Rudd gave some insights into interesting opportunities now presenting themselves in alternative investments. He made the following points:

    • Mr. Rudd's presentation, titled Authentic Collectibles, included a case study of a high-net-worth stamp collector from the financial services industry
    • Mr. Rudd's subject, Bill Gross (Chief Investment Officer, Pimco) has the largest stamp collection in the world, with a 10% allocation, having spent from $50 to $100 million collecting, and saying that based on sales at auction, his profits are four times cost
    • Mr. Rudd started by addressing what allocation to collectibles, if any, there should be in a high-net-worth portfolio, indicating that there is a difference between a 10% allocation for someone with $10 million and someone with $1 billion; Mr. Rudd said that the scale problem with investing in collectibles has to do with what happens when value is lost, asking what the implications of 10% portfolio loss might mean to someone who does not have $1 billion
    • This served as an introduction into the question of why people might invest in collectibles, with Mr. Rudd talking about the distinction between primary (essential) and secondary (supplemental & aspirational) goals
    • Mr. Rudd said that three factors contribute to the decision to invest in collectibles, including the love of collecting, the power & recognition that comes when a goal is achieved and a collection can be gifted to charity, & the associated wealth goal of return on investment
    • Mr. Rudd also addressed the psychology of investing in collectibles, showing that one in three people collects something (toasters) and that this incidence rises with age, wealth, & time available; Mr. Rudd then moved into behavioral motivations, exploring recurrent themes such as addiction & compulsion, positive recognition, mutual identity within a group, & the concept that items benefit from contagion and promote a collector's self image & reinforce the significance of the collection
    • After briefly addressing other authentic collectibles such as art, rare books, antiques/furniture, maps, & wine, Mr. Rudd pointed to the concept of a household balance sheet for financial advisors who must determine whether clients can afford & finance collecting
    • In closing, Mr. Rudd indicated that for the sole rationale of financing future goals, collectibles might not be the answer, but that invariably, investors who do collect do so for many reasons, pointing to six conclusions from his study, including investing can be addictive, can also be fun (not to be confused with wealth creation), is a skill-based pursuit, can be profitable, requires advisors to step in & protect their clients, & that even high-net-worth investors can lose great deals of money
      In closing, Mr. Rudd indicated that for the sole rationale of financing future goals, collectibles might not be the answer, but that invariably, investors who do collect do so for many reasons, pointing to six conclusions from his study, including investing can be addictive, can also be fun (not to be confused with wealth creation), is a skill-based pursuit, can be profitable, requires advisors to step in & protect their clients, & that even high-net-worth investors can lose great deals of moneyHe ended by saying that, “leadership is about caring for others around you and the real job of a leader is to always have their best interests at heart”

    General Session Panel Discussions

    One of the key themes of every Tiburon CEO Summit is the need to more closely listen to clients and peers. In open acknowledgment of the truly unique market conditions created by the 2008 credit crisis, Tiburon CEO Summit XV included a special general session current events panel in addition to its usual Tiburon CEO Summits' general session panel discussions (Ask the Consumers, Ask the Advisors, & Ask the Gatekeepers). All allowed Tiburon CEO-level clients to hear directly from their constituents in an unvarnished way. This is in sharp contrast to most CEOs' daily activities, where they are forced to rely on interpreting marketing data or listening to anecdotal stories from their sales forces. Addressing these constituents first-hand through questions & answers helps Tiburon clients further consider innovative ideas for serving these different client groups.

    Credit Crisis

    Tiburon CEO Summit XV included a special general session panel discussion on the credit crisis. The panel constitutents included John Cammack (Head, Third-Party Distribution, T. Rowe Price Group), Ron Cordes (Co-Chairman, Genworth Financial Wealth Management, Genworth Financial), Harold Evensky (CEO, Evensky & Katz, Fiduciary Network), Ken Fisher (CEO, Fisher Investments), Neil Hennessy (Chairman, Hennessy Advisors), & Paul Schaeffer (President, ReFlow, Sutton Investments), with Chip Roame leading a discussion that focused on four aspects of the credit crisis, including severity, culprits, winners & losers, and medium-term impacts. Because of the uniformly positive feedback from attendees (who appreciated the opportunity to listen to and participate in a lively debate among peers with varying opinions on a topic everyone was thinking about), future CEO Summits will implement a general session current events panel discussion loosely based on the solid foundation laid down at Tiburon CEO Summit XV.

    • Chip Roame opened the discussion with a brief introduction of all the panelists, wasting no time addressing the first aspect of the debate, the perceived severity of the credit crisis. All of the panelists shared the view that the current market conditions are the worst they've seen in their respective lifetimes, but with varying views as to what this truly means
      • John Cammack's serious tone underscored his concerns about the dangerous structural issues of having a bond market with no liquidity. He also talked about the violation of trust that has occurred across the board and the resulting lack of confidence in the system. Mr. Cammack also specifically referred to the "Magnificent Nine" banks that have emerged as players, who are effectively biding their time,