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Tiburon CEO Summit XXI

Tiburon Strategic Advisors offers market research, strategy consulting, & other related services primarily to financial services firms. For the past nine years, Tiburon has also hosted the semi-annual Tiburon CEO Summits alternately in New York & San Francisco; these events provide a unique opportunity for a select cross-industry group of senior financial services industry executives to discuss a broad swath of issues regarding the future of the banking, insurance, brokerage, investments, advice, & wealth management businesses. The list of business relationships resulting from prior Tiburon CEO Summits is impressive. 

Tiburon CEO Summit XXI was held October 12-13, 2011 at the Ritz Carlton Hotel in San Francisco, CA. As is tradition, Tiburon CEO Summit XXI was kicked off by a presentation addressing the state of the financial services industry by Tiburon Strategic Advisors' Managing Partner Chip Roame.

Chip Roame
Managing Partner
Tiburon Strategic Advisors
Chip Roame (Managing Partner, Tiburon Strategic Advisors)

Charles ("Chip") Roame is the Managing Partner of Tiburon Strategic Advisors and a leading strategic consultant to CEOs, other senior executives, & boards of directors in the brokerage, investments, banking, & insurance markets. Prior to forming Tiburon in 1998, Mr. Roame served in similar capacities, first as a management consultant at McKinsey & Company, and later as a business strategist at The Charles Schwab Corporation. Mr. Roame is quoted daily throughout the media and, due to Tiburon's widely shared research; he may be the most frequently demanded board advisor and conference speaker. His particular expertise is that of corporate strategy for larger financial services firms, designing broad multi-faceted strategies and making trade-offs between alternative businesses, products, & markets.

At Tiburon, Mr. Roame has responsibility for all of the firm's consulting, research, & marketing activities which keeps him on the leading-edge of strategic initiatives in the industry's fastest growing businesses - mutual funds, exchange traded funds, separately managed accounts, hedge funds & other alternative investments, financial planning, wealth management services, life insurance, annuities, family office services, online financial services, and the growing independent advisor markets. He has also taken a substantial interest in financial services industry venture capital & private equity opportunities and investment banking transactions. At Tiburon, Mr. Roame has led over 1,400 client engagements for over 300 corporate clients since 1998.

Mr. Roame has won numerous awards throughout the consulting and financial services industries, including being named one of the power 25 elite by Investment News, one of the twenty-five most influential people in financial planning by Investment Advisor magazine, & one of the five experts with the answers by Boomer Market Advisor. Tiburon has also been named one of the fastest growing companies by the San Francisco Business Times in multiple years.

Mr. Roame is frequently sought as a board member by Tiburon client company boards. He presently serves as a board member at Envestnet (NYSE: ENV). In the past, he has served on a variety of other boards, including those for start-up ventures Anira Advisory Group, One Harbor, & Prima Capital Holdings, the SA Funds mutual fund family, and the Institute of Investment Management Consultants trade group.


Mr. Roame addressed the state of the financial services industry, including the most important news stories in the past six months and the ten most fundamentally important industry trends. His outline included the broad market environment, including world events, the economy & markets, financial services industry stumbles, consumer wealth, growing baby boomer issues, and attitudinal & behavioral issues. His outline went on to include financial services industry strategies, including product trends, markets & distribution channel evolution, and strategic activity. Mr. Roame addressed the wild card, which he said is the regulatory agenda & the 2012 elections. And Mr. Roame closed by offering a take-Away which was the top ten fundamental trends impacting all financial services firms.

Chip Roame
Managing Partner
Tiburon Strategic Advisors
Broad Market Environment

As it pertains to the broad market environment, Mr. Roame sought to put recent world events into perspective for financial services CEOs who attended the Tiburon CEO Summit, saying, “we got the bad guy” regarding Bin Laden’s demise, and touching on less certain but still relevant issues of continued turbulence in the Middle East, natural disasters on the US East Coast, and politically charged issues like the Solyndra bankruptcy. He addressed the potential outcomes from various economic & market scenarios, touching on the fact that, “bank failures are down to just 88 in 2011”, questioning the idea that “..that is good?”, and that, “while we like to blame...” the European Debt Crisis for our woes in the US, that in fact our high unemployment and sluggish economy are more products of internal and political problems here at home. He highlighted the continued slump in housing as a key factor impacting prospective retirees as we now have the, “inverse of the 1990s Wealth Effect, where all three (investable assets, principal residences, & small business values) went up”.

Financial Services Industry Strategies

Regarding financial services industry strategies, Mr. Roame made predictions for the growth of leading markets & distribution channels, including the RIA market (“fastest growing channel”), the IBD market, where he strongly refuted the “break away broker trend” by pointing out that 90% of those leaving wirehouses have been “fired”, suggesting to the group, “you want to call the guy a breakaway broker, go ahead…he was broken away!”. He also discussed the continued evolution of self-serve channels (i.e. discount brokers) saying there are, “fifty firms but only five that matter”, and highlighting the new Schwab IBO strategy as, “exactly the spirit of the original Schwab model”, and touched on several other, “pretty nifty products in this space”.

Mr. Roame made similar predictions for product trends, including those for mutual funds, which are, “bigger than everything else added together”, ETFs, which are, “almost synonymous with indexing”, a part of the fastest growing product trend he sees, “continuing”, but that it will be a “slow takeover” (in relation to active management, still at 80% of assets). Roame also highlighted the other rapidly growing trend, alternative investments, and the, “polarization” (indexing & alternatives) paradigm which he highlighted ten years ago, saying “we were right, and I would gamble that this will still be right ten years from now”. He commented on the emergence of active ETFs (“not a big deal yet”), variable annuities (“the product that is always about to win and never does”), and within alternatives he discuss hedge funds, noting that while many have emerged, most of the assets are still in the larger funds, saying that, “big hedge funds are getting super big”.

Lastly in this section, Mr. Roame addressed recent strategic activity like the purchase of Securities America by Ladenburg Thalmann, and venture capital and private equity trends in financial services, including recent transactions like Lovell Minnick acquiring First Allied, and the Parthenon’s investment in HD Vest.

The Wild Card: The Regulatory Agenda & the 2012 Elections

Mr. Roame offered a top down recap of the complicated regulatory and political environment, revealing attendee survey data pointing to FINRA being named as the RIA Regulator, and that the US would have a Republican president in 2012. His own bold outlook is that Obama will be re-elected after, “replacing Biden with Hillary (Clinton)” in 2012, but that they will continue to be working with a Republican Congress, suggesting no meaningful change to either the legislative or executive branches of government.

Take-Aways: Top Ten Fundamental Trends

In an effort to offer an outsider’s view of the key points, Mr. Roame offered that there are ten (really twelve) fundamental trends effecting the financial services industry. These trends include: 1) fee-based pricing; 2) indexing & ETFs; 3) alternative investments; 4) retirement income & longevity insurance; 5) simplicity; 6) tactical asset allocation; 7) independence; 8) dominance of high-end advisors; 9) self-serve channels; 10) fundamental shifts in defined contribution business; 11) outsourcing; & 12) financial advisor aggregation.

To learn more about attending Tiburon CEO Summits, please contact Sarah Sage at SSage@TiburonAdvisors.Com or 415-789-2540.