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    APIC APIC Presentation Transcript

    • A Year of Change, a Return to APIC’s Roots! Annual Membership Meeting Association of Professional Investment Consultants June 9, 2005
    • Association of Professional Investment Consultants (APIC) Organizational Chart 2005-2006 APIC Membership > $5 Million Steve Thacker Scott Wilson < $5 Million Susan Yelen Private Wealth Management APIC Board of Directors Secretary/Treas Douglas Berger Advisory Group Jim Pupillo Chris Aitken Association Staff Committees and Chairperson (s) Research & Evaluation Kent Cox Conference Oversight Elaina Spilove Technology Jon Webster Legal and Regulatory John Collier Membership Jim Gill Corporate Services Brian Penzel Committee Board Liaisons George Dunn Elaina Spilove Brian Hein Skip Sussman Susan Yelen Brian Kelly Bob Scherer Lori Van Dusen Scott Thayer Doug Berger Endowment/ Foundation President/ Spokesperson Chris Aitken Executive Committee Pres. Elect/VP Tim Kneen Steering Committee Jim Pupillo Exec Director Eric Scharf Mark Curtis Governance Paul Compton Agenda Planning 2006 Gregg Paulson Jeff Wigbells Logistics Planning 2006 Elaina Spilove Nominating Tim Kneen Professional Development Janet Bolton Oracle Bill Teeple Barbara Griffin Updated June 9,2005 Past President Jim Pupillo Endowment/ Foundation < $25 Million Doug Berger Endowment/ Foundation >$25 Million Lori Van Dusen Scott Thayer Website/ Street Smarts Tom Davis Al Eaton Finance Comm. Douglas Berger Best Practices Tim Kneen Phil Shaffer President George Bush once said “Great Leaders are defined by those people around them..” Janet Bolton Mike Engel
    • Welcome Newly Elected Board Members Three-year terms Janet Bolton, Chicago, IL Steve Thacker, Baltimore, MD Mike Engel, Washington, D.C. Phil Shaffer, Columbus, OH Special Thanks to Outgoing Board Members Sandee Smith, Kansas City, MO Mike Melko, Chicago, IL Appointed one-year term Skip Sussman , San Rafael, CA
    • Honoring our Charter Members
      • Chris Aitken
      • Bill Ankeny
      • Dan Biederman
      • Ed Clissold
      • Rusty Cooer
      • Mark Curtis
      • George Dunn
      • Larry Eckstrom
      • Barry Giller
      • Rich Gleason
      • Austin Heberger
      • Kathleen Hegenbart
      • Mary Lynne Hickey
      • Laree Hulsoff
      • Steve Jackson
      • Brian Kelly, Sr.
      • Ted Lucien
      • Chris Poch
      • Dan Rolan
      • Mike Sasser
      • Robert Scherer
      • John Scott
      • Sandee Smith
      • Gene Trudeen
      • Jeff Wigbels
      • Howard Zumsteg
    • A Year in Review
      • Rewrote APIC’s Mission Statement and five-year Strategic Plan including new membership criteria
      • Made structural changes to the conference
      • Dramatically reduced APIC’s expenses
      • Created new committees
      • Partnered with the Firm on new initiatives
      • Developed Professional Standards Guide
    • Accomplishments in 2004 - 2005
      • Governance Committee
      • Facilitated the 5 year strategic planning effort including new membership standards.
      • Developed Board Orientation Program
      • Continued improvements to the Board Operating Manual
      • Finance Committee
      • Established a Finance/Audit Committee:  Doug Berger, Bob Scherer, Paul Compton & George Dunn
      • Developing a records retention and emergency back up/recovery procedure.
      • Produced a new APIC budget for the recently adopted policy that avoids potential conflicts of interest
      • Conference Oversight Committee
      • Planned the 2005 Annual Educational Conference in Naples, FL on June 9 – 10, 2005 with an attendance of more than 230 members present. .
      • Reoriented the conference away from an event supported by and involving the providers of money management services to a self-supporting program paid for directly by the membership
      • Initiated planning for the 2006 conference,
      • Legal/Regulatory Committee
      • FC Team Agreement
      • Franchise Protection Plan (FPP)
      • Staff Compensation
      • Outside software programs
      • Personal Computers: NNPC (Non-Networked Personal Computers)
      • PWM < $5 Million Committee
      • Integrated Wealth Management. 33% Done, 3 out of 9 items completed
      • Inconsistencies in Tax Reporting Done, 9 out of 12 items completed
      • Friction List from 2004. 28% Done, 21out of 75 items completed
      Accomplishments in 2004 - 2005
      • Steering Committee
      • Worked with the Governance Committee to complete the development of the Strategic Plan
      • Continued development of the Industry Professional Standards project which has included:
      • a. Fine tuning and dissemination of the Code of Ethics
      • b. Finalization of the Professional Standards Guide which will be ready for release at the Annual Conference.
      • Oversaw the development of the Industry Advisory Council (IAC)
      • Research/Evaluation Committee
      • 50 additional managers covered in CES year to date along with several level commitments.
      • An improved salary and bonus structure was put in place which has improved morale and reduced turnover in the research department.
      • Consideration is being given to a second tier of investment managers who will work for a fee level between FS and their current fee with lower minimums. This would improve our access to high quality managers.
      Accomplishments in 2004 - 2005
      • Foundation/Endowment < $25 Million Committee
      • Developed Initial Committee Responses,
      • Developed Priorities for this committee to pursue
        • a.  Support CG in developing marketing materials  for this market
        • b.  Support development of better RFP Response Capabilities  ( Will assist CG in populating it's new software &quot;The RFP Machine&quot;)
        • c.  Support development of Finals Presentation Resources  
        • d.  Focus on Marketing Opportunities - Philanthropic Services - Rockefeller Philanthropic Advisors     
      • Industry Advisory Council
      • Building a Culture that embraces Ethics and Professional Standards
      • Portfolio Construction
      • Behavioral Finance Research
      • Member Internet Services Committee
      • Worked with StreetSmarts technology provider, Involve Technology, to enhance its member communication tool with improved features and usability. These include:
      • Reworked the categories in the Website Members Exchange to conform with StreetSmarts and then placed all of the current items into the categories with descriptive information.
      • Reworked the committee report module to make it easier to post reports .
      Accomplishments in 2004 - 2005
    • Accomplishments in 2004 - 2005
      • Membership Committee
      • Performed and reported major study of membership composition
      • Researched and recommended new Qualifications for Membership
      • Created presentation/assisted with Board Membership campaign
      • Since July 2004, responded to 123 applications of which 91 were recommended for approval by the Board. APIC began the year with 372 Voting members and 168 Non-Voting members; as of May 30, 2005 there were 223 Voting members and 108 Non-Voting members.
      • Worked with the Internet Members Services Committee to implement further upgrades to Online Application Process and continued the process of improving and simplifying the Online Application Process
    • New Mission and Five-Year Plan “ A Community of Colleagues Fostering Professionalism Through a Culture of Consulting”
    • APIC Membership Requirements Effective January 1, 2005
      • In order to qualify for voting membership, a member must have one of the following credentials:
        • Senior Institutional Consultant (SIC)
        • Chartered Financial Analyst (CFA) – 06/2005
        • Certified Investment Management Analyst (CIMA)
        • Private Wealth Management Advisor (PWMA)
        • Corporate Client Group Director (CCG Dir.)
        • Senior Investment Management Consultant (SIMC)
      • Individuals who were voting members prior to January 1, 2005, and do not possess any of these credentials will have two years from 1/1/05 to obtain one of the listed credentials OR, members will be grandfathered if they have been members in good standing for at least five years as of 1/1/05.
    • Structural Changes to the Conference
      • Avoid all perception of conflicts of interest
      • APIC no longer accepts investment advisor sponsorships for any functions
      • Return APIC to its roots, when the conference was educationally focused featuring FC’s exchanging ideas and networking
      • APIC members will be the beneficiaries of “Returning to Our Roots” and to spending more time sharing ideas with our friends and fellow practitioners
    • Budgetary Changes
      • Conference last year netted a surplus for APIC. With that reserve we were able to make needed changes
      • We cut over $150k from the budget including over $75k from conference planning, over $10k from meetings, $21k from printing, $15,000 by having the firm absorb the cost of FundFire and $8k from credit card fees
      • Today we are a leaner organization, completely focused on providing value to our colleagues: You the APIC member
    • New Committees = New Problem Solving
      • Best Practices Committee is generating great ideas that are shared with the entire membership
        • George Dunn’s ideas on allocating to commodities
        • Scott Thayer’s finals presentations, etc.
      • Professional Development Committee
        • Committed to raising the knowledge level and differentiating our practices
        • The Mitch Anthony Program that was conducted today
      • New management structure at APIC – Exec team will stay for another year to provide continuity during this current transition period
        • Chris Aitken, President
        • Tim Kneen, President-Elect, June 2006
        • Jim Pupillo, Past President 2004
        • Doug Berger, Secretary and Treasurer
        • Elaina Spilove, Conference Oversight
    • Partnering with The Firm
      • FundFire cost savings
      • Board meetings held at CG and other firm events to create cost sharing
      • Top priorities list
      • Conference planning
    • 2005 - 2006 Top Priorities of APIC
      • Create and/or buy Performance Reporting that is accurate and “the standard of the industry”.
      • Research
        • Change structure and expand research capabilities
        • Focus on adding managers that add Alpha
        • Collaborate with 18 manager analysts in Private Bank
        • Expand asset classes to include more alternatives
      • Umbrella Pricing
        • Expand Advisor to include all products and asset classes
      • Friction Items
        • Tax Recordkeeping and Reporting
        • Questionnaires
          • Qualitative and Quantitative Client Discovery Process
          • Improved Risk Questionnaires integrating behavioral finance
        • Comprehensive Fee Calculator with transparency including all discretionary and non discretionary fee based solutions
      • Industry Custodial Reporting
        • Deliver a workable strategy
    • Looking Forward – Our Challenges
      • APIC is only as good as how involved its members are.
      • We need to find ways to engage each of you !
      • Your Board of Directors has Committed to:
      • Run a financially tight ship with the elimination of investment advisor sponsorships
      • Better communicate to the membership more of what each committee is doing and what APIC is accomplishing
      • Encourage a free flow of idea sharing using cutting edge technology that addresses the usability issues with the old Chalkboard list serve and current StreetSmarts system.
      • Continue to attract the best practitioners to APIC
    • Looking Forward – Our Challenges
      • Continue to push the firm to provide us with the latest in technology at the branch and for the mobile consultant
      • Continue to push the firm on our highest priorities and items that enhance best practices like team training
      • Continue to push the firm to be leaders in the investment management consulting industry and not be satisfied with past success
      • Insist that the Firm execute on what they promise us they will do
    • Paul Compton Chair, APIC Governance Committee Board Liaison, Membership Committee Led the APIC Board of Directors through the Strategic Planning Process and implementation of its key elements that will bring APIC “ Back to the Future”
    • Association of Professional Investment Consultants A community of colleagues fostering professionalism through a culture of consulting
    • Structure
      • Professional Association
        • Bylaws, Policy and Governance, Procedures
      • Professional Expectations of members
        • Qualifications – Skill-set
      • Committees of members – principal activity
        • Standing Committees
        • Functional Committees
      • Annual Educational Conference
    • Vision
      • In a dynamic world, our clients, our firm and our industry need professional financial consultants who respond to their needs with customized comprehensive solutions.
      • Our association supports an atmosphere of intellectual accomplishment and encourages reciprocal exchange of ideas.
      • Our passion for perfection enhances the financial consultant’s effectiveness and the quality of the client’s experience.
      • APIC is the communication link between unified financial consultants and Smith Barney’s senior management.
    • Mission
      • APIC
        • advocates for our standards and for our members’ needs;
        • innovates to provide creative solutions to client problems;
        • educates to raise the skill of its members and
        • communicates to support free interchange of our best practices, ideas and information, and to build the collective wisdom of our members and our association.
    • Core Values
      • Client-Centered business practices
      • Highest ethical standards
      • Collaborative, professional colleagues
        • academically inquisitive thinkers who share our intellectual capital
      • State-of-the-art solutions
        • for our clients and our consulting practices
      • Advocate
        • dedicated to being a positive influence within our firm
        • a unified voice representing the business needs of the membership
    • Education & Professional Development
      • Best Content Systems for Development
        • Best Practices Committee
          • Innovative Educational Content
      • Educational Conferences
        • Members Practices
        • Outside Industry Leaders
      • Align Educational Content with CG Track
        • FC’s prepared to qualify
      • Professional Development Committee
      • Electronic Communication
    • Advocacy
      • Stakeholders
      • Inform the Firm
        • Profitable use of Firm capital
      • A willing, qualified membership
      • Support Program-oriented Committees
      • Industry Advisory Council
        • Behavioral Finance
        • Portfolio Construction
        • Professional Standards Guide
    • Communication
      • Unified communication strategy
        • Oracle upgrade / APIC Journal
        • Website upgrade path
        • Media relations
      • APIC archives – publish history
        • Annually itemize accomplishments
    • Innovation
      • Drive change by teaching innovations
        • Ongoing member prospecting
        • Conference content
        • Industry Advisory Council
    • Member Expectations
      • Share the Vision
      • Professional Standards
      • Ethical Practices
      • Leadership
      • Committee Service
        • Challenge
        • Natural talent + willing to learn
    • Association of Professional Investment Consultants A community of colleagues fostering professionalism through a culture of consulting
    • Jim Pupillo Immediate Past President Chair, Steering Committee Chair, Industry Advisory Council Guided APIC’s Initiatives in Two Key Programs Professional Standards Maximizing APIC’s Industry Relationships
    • Focus on Standards and Innovation
      • Creating resources for building a culture that values high professional standards
      • Tapping into the best of the investment management consultant industry to create innovation and new directions for the practitioner
    • Professional Standards Project
      • Initiated by former President Jim Stoker with the guidance of the Steering Committee
      • Assisted by the resources of Don Trone and the Foundation for Fiduciary Studies
    • Partnership with the Foundation for Fiduciary Studies
      • Distribution partners with the Foundation of their publication –“Prudent Investment Practices Handbook”
      • APIC members receive a special discounted price.
    • APIC Code of Ethics
      • In 2004 the Board of Directors approved an APIC member Code of Ethics
      • Designed as a membership guideline, it provides you with a resource to demonstrate to clients how you operate your practice in a highly ethical fashion
    • APIC Code of Ethics I recognize that this Code of Ethics, its principles, and obligations are in addition to those set forth by any other code which governs my professional and ethical conduct.
      • To my consulting clients, I will
      • Act with honesty and integrity, and seek to avoid conflicts of interest, real or perceived.
      • Ensure the timely and understandable disclosure of relevant information that is accurate, complete, and objective; including any actual or potential conflicts of interest.
      • Be responsible when determining the value of my services and my form of compensation, taking into consideration the time, skill, experience, and special circumstances involved in the performance of my services.
      • Know the limits of my expertise, and refer to colleagues and/or other professionals on issues beyond my knowledge and skill.
      • Respect the confidentiality of information acquired in the course of my work. I will not disclose such information, except when authorized or otherwise legally obligated to do so. I will not use confidential information acquired in the course of my work for my personal advantage.
    • APIC Code of Ethics
      • To APIC, I will
      • Proactively promote and be an example of ethical behavior as a responsible partner among peers, in the work environment, and the community.
      • Ensure that my fee structures and the overall promotion of my practice are implemented in the best interests of the profession.
      • Seek, accept, and offer honest criticism of technical work; acknowledge and correct errors; and properly credit the contributions of others.
      • Use corporate assets and resources employed or entrusted to me in a responsible manner.
      • Continue to improve my knowledge and skills, share ideas and information with my colleagues, and assist them in their professional development.
      • Approved by the APIC Board of Directors as a membership guideline on March 1, 2004.
    • Promoting Professional Standards The Professional Standards Guide for Investment Management Consultants is a new tool to use in growing your practice. The standards were developed in conjunction with Prudent Investment Practices and provide a common set of operating standards that should be used by all professional investment management consultants. Working with Smith Barney’s legal compliance team, APIC has created a guide that you can use internally and as a valuable marketing tool to demonstrate how you operate your practice.
    • Eight Standards for Professional Practice
    • Sample Standard
    • How to Use the Professional Standards Guide in Your Practice
      • Benchmark how you operate your practice.
      • Training of new staff and colleagues to practice the “APIC” way.
      • Demonstrate to clients that you work at a high level of professional standards
    • How to Obtain the Guide
      • APIC is placing a .pdf copy of the Guide on the members only section of the website – your’s free to download as a member benefit.
      • Attractive color copies will also be available to purchase.
        • First 25 copies: $7.00 each
        • Next 25 copies: $6.00 each
        • Next 50 copies: $5.00 each
        • Over 100 or more copies: $4.00 each
        • We are offering a 25% pre-publication discount for 1,000 copies ordered.
    • Creating innovation and new directions for the practitioner
      • Mission of the Industry Advisory Council is two-fold:
        • Industry Communication Bridge – Function as a communication link with key industry leaders to stay abreast of cutting edge technological innovations and other developments.
        • Industry Think Tank – Function as an exploratory investment consulting research and developmental think-tank.
    • Industry Leadership
      • The IAC consists of such key leaders as:
        • Frank Sortino
        • Bob Seaberg
        • Donald Trone
        • Bob Padgette
        • Ron Surz
      • APIC leadership is actively involved in leading this effort.
    • Projects that the IAC is Focused On
      • Building a Culture that embraces Ethics and Standards
        • Implementing a Code of Ethics for APIC Members
        • Developed the APIC Standards of Practice
        • Collaborating with the Foundation for Fiduciary Studies to foster a culture that values ethical behavior within a standard set of practices
      • Portfolio Construction
        • Blending Active/Passive Investment Strategies
        • Alpha Through Enhanced Asset Allocation
        • Research of Minimum Acceptable Returns (MAR)
      • Behavioral Finance Research
        • Obtain Better Understanding of Behavioral Finance
        • Provide Informational Resources for Financial Consultants
    • In Closing – Two Thank You’s
      • First – To the conference committee
        • No committee has ever faced bigger challenges! Please give them constructive ideas and more importantly, Thank them – Elaina Spilove, Steve Thacker and Mike Engel
      • Second – The APIC Board and Committee Chairs
        • If you would all stand - Thank YOU
        • You do the day-to-day work of APIC!
      • Finally, in closing, I would like to read you an email exchange between my Vice President and one of our members. It speaks to who we have always been!
      • First, thanks for your comments. We can only serve better by listening. Second, I couldn't agree with you more about getting Value. If APIC is not providing value to you and your practice then you should leave and find it elsewhere. However, let me share a few thoughts about how APIC is providing value in my life and practice and see what you think in the end:
      • 1) When I first joined APIC I was a pretty good producer (1st quintile type) and I did OK bringing in new clients and I did pretty good managing my clients assets. I attended my first conference and was struck with the awesome reality that what I thought was pretty good was in fact pretty average. The best practitioners were using cutting edge ideas that I had not even thought of. The best practitioners were thinking about asset allocation problems that were coming, not here yet, but just around the corner. The best were not simply satisfied with being pretty good at manager selection they demanded and had a plan to b better. Let me give you some examples:
        • The best practitioners were thinking about alternative asset classes 10 years ago, sourcing out hedge funds and other opportunities so that when the difficult markets came their clients were prepared. They were there teaching me what these asset classes could do to risk and return so I would have my clients prepared.
        • The best practitioners were thinking 10 years ago about the brick wall that most FC's hit where there are just not enough hours in the day to do any more bizz and taught me how to leverage my time through the building of a high performance team.
        • The best practitioners were there years ago when they saw that our reporting systems were not adequate to serve our market and lead the way in helping design Orion and other reporting tools..yes that was an APIC project.
        • The best practitioners were there years ago when research was causing us lots of problems in firing managers that we had just hired. They led the way in creating the new warning system that is in place....yes that was an APIC project too
      • I could keep going on but the point is who was going to be my advocate with the firm, who was going to teach me all of these things if the best practitioners who are the members of APIC and constantly share with us were not there. I can honestly say I would not have gotten to where I am with out this organization!
      • 2) So what has APIC done for me lately? Look on the APIC website and you will see a list of great closing presentations recently posted by Scott Thayer, you will see a great study on commodities and how they can affect asset allocation posted by several FC's including Bill Hendrix and George Dunn, you will see a new Morningstar report that Mary Deathridge has found to give a snap shot look at MPT stats on a series of SMA portfolio's, you will see an idea by George Cook to use SMA's inside of 401k's there by reducing participant cost, you will see competition updates, etc. I use all of these and you will see a lot more.
      • What you wont see is what you will get most any other place...people who are not willing to share because they view you as their competition. I don't know of anywhere else where you will go and the best practitioners in the world will openly share their very best ideas for you to use. Why will they do that? Because, like me, they have gotten so much from this place we call APIC it is a honor to give back.
      • 3) APIC is my place to be part of the solution rather than part of the problem! We have real problems at this firm like all other firms. Like all firms this one has limited resources to address those problems. APIC provides a forum with Sr Mng to understand what our top concerns are, prioritize them and fund them. Someday we should list out in one document the hundreds of things that have been accomplished at this firm that started on an APIC priority list. You would be amazed at how much it has affected your daily working life. I want this to continue, in fact I need this to continue if my practice is going to continue to grow.
      • APIC is my place to be part of the solution rather than part of the problem! We have real problems at this firm like all other firms. Like all firms this one has limited resources to address those problems. APIC provides a forum with Sr Mng to understand what our top concerns are, prioritize them and fund them. Someday we should list out in one document the hundreds of things that have been accomplished at this firm that started on an APIC priority list. You would be amazed at how much it has affected your daily working life. I want this to continue, in fact I need this to continue if my practice is going to continue to grow.
      • Finally, I will leave you with this thought. Some of my closest friends in the world have come from my time at APIC. In these relationships I find the things that make me a better practitioner and a better person. My hope is that you will get more involved in APIC. If you wait for all of these things to come to you, you are probably correct in leaving. However, if you embrace wanting to be cutting edge then allow us to help you find one of our committee's that most closely aligns with your business I think you will get from APIC everything that I have. It was the best decision I ever made and one I hope you will make as well.
      • Thanks for listening and allowing me to share my experiences with you.
      • Timothy B. Kneen, APIC Vice President
      • The good news to this letter is that the member has now
      • renewed their 2005 membership !
    • A Community of Colleagues Fostering Professionalism Through a Culture of Consulting