2011 NY Summit Highlights

The 2011 Major Firms Summit was held on March 16th in New York, NY. About 30 industry executives participated in this event. Highlights from this event are below.

Click to go to a specific session:
Practice Management Case Study
Update on the Dodd-Frank Bill
Compliance Officer Panel
iPhone App Demo

Practice Management Case Study:

Attendees developed strategies by topic for a fictional financial services firm to address key obstacles and issues in delivering financial planning services in a large firm environment. Topic areas included: compensation, sales management buy-in, culture, marketing, training, and technology.

Highlights:

Compensation solutions
- Some incentive should be offered for attainment of specific designations or other higher education.
- Practices who run efficiently and have scalability should receive increased compensation for their strong operational structure.
- Compensation should also be tied to an increase in AUM, number of completed client plans, and client retention in addition to any product commissions offered.
- Staff subsidies can be considered to assist advisers with building their business.
- The branch manager's compensation should also be tied to these various metrics.
Sales Management Buy-In
- The senior sales management needs to set clear expectations and accountability.
- Success metrics need to be defined to demonstrate the business value of financial planning.
- Data should be captured and reported on to prove the firm benefits from offering the service.
- Financial planning services need to be tied into the compensation of the sales leaders.
Culture
- Culture needs to be driven both top-down and bottom-up with consistent communication.
- The organization should hold up/acknowledge those advisers who are successfully delivering financial planning services for others to emulate.
- Productivity, retention, and other key metrics should be gathered and reported on an ongoing basis.
- The organization should avoid a compensation structure that conflicts with the promotion of financial planning services.
Marketing
- Top-down communications to the adviser force to let them know about the organization's marketing efforts and how they can leverage client facing materials in support of the effort.
- Important to develop a theme or phrase around financial planning.
- Consumer education with a combination of national and regional marketing campaigns with a call-to-action around a plan/consultation check-in. The financial advisers need to be told that they expectation is that they would cover a comprehensive look at the individual's needs and goals at the initial consultation with matching collateral.
Training
- Online training led by the branch manager to the new recruits.
- A traveling trainer from home office focused on delivering adviser education across the county.
- Resource/call center at the home office dedicated to answering adviser questions.
- Advisers who are successful in their first year are then brought in for week long training.
Technology
- Advisers are overwhelmed with the technology, especially given the rapid pace of changes and updates. In addition the resources needed for effective implementation can be daunting.
- Clients also have expectations about their experience from a technological point of view.
- Training on software should be offered for both advisers and clients.
- Consider developing an educational path for advisers so they learn more about technology on an ongoing basis instead of having to learn everything at once.
General
- Ameriprise has found success with an adviser-train-adviser model.
- Advisers should go through a financial plan for themselves. The same is true with the corporate office. For example, Waddell & Reed employs a planner in the HR department as a benefit to staff.
- Having a broad product line and extensive technology can be a part of the challenge. Especially as the technology shows clients the real-time up and down encouraging a focus on the short-term instead of the long-term.
- Not all advisers need, or should, be planners. In those instances perhaps you could pair with a planner in an ensemble.

Update on the Dodd-Frank Bill

Tom Giachetti discussed some of the outcomes he expects to see from the Dodd-Frank bill. He doesn't believe it is possible to be a fiduciary and sell products because it is too confusing from a client standpoint.

Giachetti is not optimistic about the future of regulation. He thinks that the SEC is going to be the SRO overseeing all financial planning activities, but stated that the best thing for the industry would be a professional SRO. He also recommends that large firms join their voice to educate legislatures on this industry, how it works, and what types of regulation make sense.

Compliance Officer Panel

Panelists:
Kurt W. Lofgren, Senior Vice President/Chief Compliance Officer, Ameriprise Financial
Grace C Fuller, Director - Compliance, MetLife
Joseph V. Vitale, Chief Compliance Officer, TD Ameritrade, Inc.

Highlights:

Supervising Financial Planning Activities
- Ameriprise views financial planning as an ongoing process and has mechanisms in place at various stages.
  - Advisers are required to cover cash flow, risk, and estate planning. Additional areas are optional based on client need and interest. Within 90 days of the client meeting, the adviser must provide a review of these fundamentals and written recommendations.
  - The fee schedule is approved by one of the firm's registered principals.
  - The corporate office reviews the plan on a risk basis.
- MetLife also monitors at a variety of different points.
  - Advisers must complete a checklist of items with each client and submit the completed checklist.
  - Financial plans are reviewed at the home office until the adviser passes muster, then they go to a periodic review.
  - Annually they pull 20% of high-net-worth/complex plans at random and do a comprehensive review in teams of 2.
  - Also have additional monitoring of any adviser(s) who have had a prior compliance issue.
- TD Ameritrade keeps compliance on the side of the adviser. They view the transaction as an unsolicited trade and have a contractual agreement with advisers that holds them responsible.
How do you check fee suitability?
- Ameriprise has an approved range. They will look at client complexity and adviser experience to determine if the fee is appropriate. They also allow a joint fee for asset management plus plan based on AUM.
- MetLife has a case complexity worksheet that gets used to help identify an appropriate range. If the fee is over a certain amount, they ask for a copy of the case complexity sheet and review.
What is your firm's policy on the use of social media?
- TD Ameritrade has canned responses for questions. They allow specific, trained individuals to use social media for their conferences then print and file those communications. From an adviser side they have guidelines and train on those principles.
- MetLife also uses canned responses. Any adviser LinkedIn participation or comments has to go through approval and the field reps check on the activity.
- Ameriprise allows advisers to have a static LinkedIn page but none of the interactive functionality is enabled. If the adviser has a seminar that has already been approved for the web, they are allowed to use that on LinkedIn. Tweets from clients are monitored as they can constitute a complaint that needs to go into the complaint file.

iPhone App Demo

Oleg Tishkevich, CEO and founder of Finance Logix, showed how advisors can better engage, educate and communicate clients and prospects in financial planning discussions through innovative technology tools.

A new application available for the iPhone, Retire Logix, was demonstrated. This interactive tool showed how an adviser can engage in a robust 90 second conversation, just by using the touch screen capabilities of the iPhone to show how various retirement income sources, assumptions, tax and inflation rates affect a client's retirement plan. From this conversation, a more formal approach to retirement planning can be held - illustrating how new mobile technologies can help facilitate the planning discussion.