Virginia Cheung works at Wells Fargo Private Bank as the Regional Wealth Planning Manager for the DC, Baltimore, and Richmond region. Previously, Virginia was general counsel and managing director at an investment advisory firm; and a partner in a law firm where where she spent 24 years as an estate planning attorney. She currently serves of the boards of Asian American LEAD, the Community Foundation for the National Capital Region, Jade Philanthropy Society, and the Washington, DC Estate Planning Council.
A community of elite advisors and allied institutions gathered this fall for the 27th Excell Meeting. Hosted by Peak Advisor Alliance, one of the countrys leading practice management programs, and Ron Carson, a perennial favorite on both the Barrons and LPL top advisors lists, the semi-annual advisor love fest drew a throng of nearly 400 participants to what might now be deemed the new city of brotherly love.
Something About Ron
It is hard to overestimate the impact Ron Carson makes wherever he shows up. His stage presence and public persona are undeniable. Theres just something in the way he speaks and engages in conversation that makes you want to be a better person. It is not only in the words he says, but in the conviction with which he speaks.
If you hang around with Ron for any period of time, youll hear him talk about developing a strong why for your business and re-igniting your burning desire. This is not just parlor talk for Ron Carson. He walks his talk by adhering to a professional and personal discipline that just might parallel that of a former military officer. His focus on what matters, clarity of thinking, daily regimen, and ability to look through people is uncanny.
@acketyack: The best ideas at the firm dont come from me. Ive been fortunate to surround myself with great people @rchusker says #PeakExcell
@marieswift: I was the worst micromanager in the world. I used to open the mail every day, says @rchusker #PeakExcell
Carsons Why for Excell
You have all spent time and money to be here, said Carson in his opening stage comments. At a minimum, you need to glean one actionable idea and commit to implementing it by the spring 2015 Excell Meeting. The maximum goal for this and every Excell Meeting is for us to influence you and inspire greatness.
There is a crisis in our profession, said Carson as he paused for emphasis. People are more afraid of running out of money than they are of dying. YOU stand between investors and the possibility of that catastrophe becoming a reality.
Notice that I said lsquo;profession not lsquo;industry, not lsquo;business or anything else, Carson continued. All of us must work to make this a profession and to exemplify the same level of excellence the nations best doctors, lawyers, and accountants display.
We are going on 14 years now, meeting together as a community, to get better at what we do and to share our best ideas. This is a very special group. I am proud to be associated with you, Carson said before yielding the stage to the first of two keynote speakers.
@PeakAdvisor: #OmahaStreetPercussion starting the day off here at #PeakExcell with the sound of their captivating drums!
No Chair Throwing Here
Patrick Miller, co-founder and president of SC Distributors, one of the three big meeting sponsors, along with Orion and LPL Financial, introduced the first keynote speaker, the legendary and colorful Bob Knight. Knight is best known as the head coach of the Indiana Hoosiers from 19712000. He also coached Texas Tech 20012008, the US Army 19651971, and many other college teams. Knight was one of college basketballs most successful and innovative coaches, having perfected and popularized the motion offense, Miller said. He has also been praised for running clean programs because none of his teams were ever sanctioned by the NCAA for recruiting violations, and for graduating most of his players.
But it was perhaps Ron Carsons top three take-aways, delivered as a recap after the conclusion of each keynote that provided the most value for the advisors who planned on taking Ron up on his original challenge: find one actionable item and implement it before the spring Excell Meeting. Carsons recap of Knights speech: (1) A minute of preparation is worth an hour of doing. (2) Remove all the things that can cause you to lose and winning will take care of itself. (3) Draw your people in and trust them to carry out the mission, but remember that some things cant be put to a vote.
@HarkinsWealth: Coach Knight: The desire to prepare to win is more important than the desire to win #PeakExcell
@DeeNickers: We all need to learn to say No, thank you if what people ask of us doesnt align with our goals. #PeakExcell
Leadership Insights from a Marine
For me, the most poignant and important content was delivered by a former Marine: Marines are mission oriented and so are you as financial advisors, said Colonel Arthur J. Athens, USMC (Ret.). Every day you make a difference in peoples lives, touching their assets, helping them build true wealth and strengthening relationships.
Col. Athens, the father of 10 children, talked about leading while experiencing a personal crisis. He also told us how to build outstanding teams and shape the future by using the Three Cs of Leadership: Competence, Courage and Compassion. He underscored the need to be a humble servant, no matter how much success we achieve in life. The more successful you become, the more important it is to cultivate healthy humility. Unhealthy arrogance can blind us, and lead us to the brink of where we make bad decisions, thinking the rules dont apply to us anymore. People fall because they are on the wrong side of the spectrum, he said.
Col. Athens offered a very helpful way to evaluate on which side of the spectrum one falls, saying: Level 5 Leaders have strong professional will. But they also make sure the mission is taken care of and so are their people. They know its not about them; its about service, its about the team.
@StevenHammond93: Colonel Athens was the best speaker Ive ever had the privilege of listening to. So glad he was at #PeakExcell today.
@ConnorsWealth: Colonel Athens speaks at #PeakExcell: healthy humility is strong and confident, pride and unhealthy arrogance blinds us
Content, Content, Content
The Peak leadership team seems to have mastered the art of conference content. When I spoke with VP and General Manager Laura Pierson, she said they work well in advance of each Excell Meeting so they can get just the right mix of inspiration/motivation and education/information. Advisors I spoke with said they appreciated both types of content. Ironically, none of them mentioned the fact that they would get to hear Ron Carson speak during the meeting. Instead, they pointed toward sessions where they would have the opportunity to interact with other advisors in attendance and to learn from the panel discussions and main stage presentations (arguably, Carson could have been placed in that bucket, as he did have several panel slots and/or main stage appearances).
Specific portions of the Excell Meeting are geared to the various audiences Peak serves. This keeps the content focused and highly relevant for each group of participants. Many advisors mentioned the value of the Million Dollar Advisor Roundtable workshop where top-producing advisors share best ideas and challenges both in a small roundtable format and as a larger group. Support staff talked about the Team Summit, a session geared specifically to the needs of employees or stakeholders, as Ron Carson calls them, within a practice. Key topics addressed in this session included how to delight clients, how technology can aid the client experience, and how to attract ideal clients through referrals and passion prospecting events. Everyone raved about the general sessions.
In addition to sessions already mentioned in this piece, featured presentations included:
- Sterling Shea of Barrons magazine and Ron Carson spoke about the Barrons List and top advisor success principles in one general session. Michael Maslansky of Maslansky amp; Partners quizzed a group of CPAs and Attorneys on what they look for in a successful COI / referral relationship.
- Joe Steuter, a marketing expert at Peak, led a two-hour marketing workshop.
- Ron Carson and two Peak coaches did a number of role plays focused on overcoming client objections.
- A panel of advisors spoke about client segmentation and account minimums.
- Dan Bernstein of MarketCounsel spoke about regulatory compliance.
- Rons aRIA study group shared their recipes for success and how they are planning for the future.
Ron Carson and Peaks Managing Director, Paul West, continued to emcee the event and synthesize the continual stream of good information. Breaks and meals were protected time for networking so advisors and their teams could continue the idea sharing.
Not Just Another Exhibit Hall
The array of sponsoring companies in the exhibit hall is also worth mentioning. From a tailor and custom suit maker hellip; to Rons favorite cookie baker hellip; to Rons favorite charity and family cause hellip; hellip; to a more heady array of investment solutions hellip; to a bank that specializes in giving loans to advisors in merger/acquisition mode hellip; there was a unique and unusual mix that sparked new and interesting conversation.
People at Excell Meetings are simply more engaged than other conferences, said Dick Pfister, Executive Vice President of Altegris, a provider of alternative investment products during his sponsor spotlight on the main stage. Unlike some of the larger, more sterile conferences Ive attended, the energy in the exhibit space was palpable as advisors swarmed the solutions providers booths on opening night. The goal for each advisor was to get their Connect 7 card punched and full enough to qualify for the stellar prizes that would be given away at the end of the meeting.
@Equanimity_WM: Thx @CarsonWealth for all the great actionable info from #PeakExcell well use 2 improve amp; grow our #wealth management practice. #inspired
Brotherly Love Abounds
Peaks focus has always been on content, coaching and community. I discovered at this particular Excell Meeting that community might be the biggest differentiator of all.
While interviewing some of Peaks long-time members to find out why they keep coming back year-after-year, I ran into Bill Spalding. An Atlanta-based RIA with over 30 years of industry experience, Spalding has been coming to the Excell Meetings for more years than he could accurately count. Excell conferences are unlike any other industry meetings. Peak members are able to connect in a highly inspiring environment with some of the industrys top thought leaders. We share ideas and learn new best practices. One of the key differentiating factors is the willingness to openly share what we are doing and how we are achieving success.
I later found Spalding sharing ideas with David Glover, another Atlanta-based advisor and long-time member of the Peak Advisor Alliance community. Were not really competitors, were colleagues and friends, he explained. This gathering is not like the large B/D gatherings I attend. Its big enough to be interesting but small enough to feel connected, Glover said.
Houston-based Randy Price, a top advisor with RBC Wealth Management, says it is the like-minded people that keep him coming back. Real people are fun to be around people that are committed to excellence, people that have a mission thats greater than just the business, because at the end of the day its not just about how much money is in the bank. This conference touches all the buttons for me, and Ive never seen so many people openly sharing. Egos are typically lsquo;checked at the door. We understand that no one here is really a lsquo;competitor even if they have a wealth management firm right down the street.
Advisors come here to gain new friendships, resources and tools to help them grow both personally and professionally, said Prices coach, Greg Opitz. Randy has been a part of our community for about 4 frac12; years, and in that time hes only missed one meeting hellip; so 8 out of 9 is not bad. And actually, hes being really humble hes in the top 1% at RBC, which as you know is one of the nations most prestigious financial institutions.
One additional conversation I had was with Minnesota-based advisor Bryan Sweet. Sweet is a long-time Peak member and one of Raymond James most successful advisors. Go toBest Practices in the Financial Services Industry to access the full conversation.
Our passionate community is one of the reasons why Peak members are so successful, said West. Advisors need to know they are not in this alone, and that others are out there who share similar goals, challenges, and triumphs. So we created an atmosphere to make this possible.
@BradleyWealth: #PeakExcell Excellent insights from aRIA top advisor panel to wrap up an inspiring few days at Peak Advisor Alliance meeting in Omaha
With the growing number of people retiring each year, many are faced with one of the largest single financial decisions of their life. The choice of whether to receive regular pension payments from their employer or to transfer their pension money into a locked-in investment account (LIF or LRIF) is something most people are not equipped to make on their own. This can be a difficult decision, with pros and cons for each option, each of which should be considered carefully.
As there are several factors to take into account, it is often beneficial to discuss your situation with a qualified professional Financial Planner or Wealth Advisor (look for those with a CFP or RFP. designation). These experts can assist you in thoroughly analyzing your options and can even explain advanced planning strategies you may not have been aware of.
Everyones circumstances are different, so the choices others make may not be right for you. For example, transferring your pension money into a locked-in account provides you with more control over how the money is invested. In fact, you can even pick your favourite Portfolio Manager(s). This can be beneficial if your investment returns are high or if you are concerned about the future financial stability of your employer. However, it can also put your income at risk if returns are low.
The increased flexibility of a locked-in account compared with a regular pension payment can also be attractive as you have the ability to decide on the amounts of your withdrawals (within the minimum and maximum limits for locked-in accounts). Obviously there is no guarantee that your investment returns will be sufficient to provide your desired income. On the other hand, an employer can supply additional funding to its pension plan to ensure members payments remain the same when investment returns are lower than anticipated. Of course, if the company is struggling financially, they may not be able to offer this type of support. As a result, your pension could be significantly decreased as we have seen occur with many company pension plans in Canada over the years. Generally speaking, pension plans are not guaranteed, which comes as a huge shock to most people. Your family situation, health and life expectancy can also affect the determination of which option is in your best interests.
There are a number of other important issues to take into consideration when making decisions about your pension. Advanced Wealth Management planning can help you to understand your options more fully. Its important to find an objective professional to assist you in making an informed decision that youre comfortable with and that will benefit you and your family for many years to come.
This article is provided by David Wickenberg of KWB LLP with assistance from Bruce Deck of Wealth Stewards Portfolio Management Inc. The information is general in nature and not intended as advice. Individuals should speak to a licensed professional before making any legal, tax, wealth planning or investment decisions.
(James Saft is a Reuters columnist. The opinions expressed are his own)
By James Saft
Dec 10 (Reuters) - Financial advisors do not appear to be carrying their weight.
A new study based on Canadian data shows that while advisors are able to put clients into better performing assets, they simply do not outperform their costs.
Even more striking, the data shows a tendency by advisors to shoe-horn clients into portfolios with little attention to the clients own risk appetite or life situation.
This one-size-fits-all advice does not come cheap. The average client pays more than 2.7 percent each year in fees and thus gives up all of the equity premium gained through increased risk-taking, write Stephen Foerster and Alessandro Previtero of Western University, Juhani Linnainmaa of the University of Chicago and Brian Melzer of Northwestern University (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2532293)
Looking at data covering 10,000 advisors and 800,000 Canadian clients, the authors found a mix of some good effects from professional financial advice but little evidence that it is worth its costs.
One of the traditional ways in which advisors are said to help clients is by getting them comfortable with taking on a higher, more appropriate level of risk, usually through equity market exposure. Because of a change in regulation in Canada in 2001, which did not apply to Quebec, the authors were able to get an accurate view of this, even taking into account selection bias, ie the idea that people who seek out financial advice are more sophisticated and willing to take on risk. The study found that a financial advisor increases the marginal households risky asset holdings by a chunky 30 percentage points.
Thats great, and will produce extra returns, but what did not seem to be happening was the kind of tailoring that you would expect from a financial advisor. A good advisor will be sensitive to your own appetite for risk, which may be influenced not just by your own goals but by your particular life situation. A good advisor will also adjust a clients asset mix depending on where they are within the life cycle, typically taking on more risk early in a working life and trimming it as retirement approaches.
Looking granularly at the data they found that how much risk appetite you had and how old you were explained about 13 percent in the variation of your holdings of risky assets.
IT ISNT WHO YOU ARE, ITS WHO YOUR ADVISOR IS
In contrast, who your advisor was played a much more important role, accounting for 32 percent of the variation in risk exposure.
This led the authors to conclude that advisors are basically coming up with a generic model portfolio and then using it or a slight variation of it on their clients.
If advisors do not base their advice on investor characteristics, then what explains variation in recommendations across advisors? We find that advisors may project their own preferences and beliefs onto their clients, according to the study.
That might possibly be good if an advisor had some special talent in markets, but the data did not back that up, either in regards to stock picking or market timing.
Here is where we come to costs, and the data is not encouraging.
The average dollar under the care of an advisor in the sample was paying out 2.67 percent annually in fees, including mutual fund expenses, front-end load fees and commissions paid by mutual funds to advisors. That is far more than the advisors demonstrated in alpha-generating ability through market timing or stock selection, an amount small enough to be not statistically distinguishable from zero.
Using one model and adding in fees the authors calculate that advice was costing 3.34 percent annually. If you use a life-cycle fund charging 1 percent annually as a benchmark for asset allocation costs, advisors are still costing clients more than 2 percent a year.
In other words, advisors may be doing clients a favor by getting them to hold more equities, but it is a move which could be done so much more efficiently without the cost of the active mutual funds into which advisors in the sample were putting clients.
This is not to say that advisors definitively dont earn their keep. Advisors can create tax-efficient asset allocations, a source of outperformance not measured here. They can also, and this is crucial, help with planning. An advisor who through honest, frank advice encourages a client to save more or to delay retirement can be the difference between comfortable retirement and late-life financial peril.
That all falls under the category of counseling, and generally that is not what financial advisors get paid for, though perhaps they should.