Executive Summary
The FPA NorCal regional conference ran as it usually does, on the Tuesday/Wednesday following Memorial Day weekend at the Palace Hotel in San Francisco. Pulling over 600 attendees from across the country, the event is on par with any national conference in the financial planning space. Here are the highlights from Day 1, as broadcast from the incredibly active Twitter stream on the #FPANorCal hashtag!
(Editor's Note: See separate highlights of the opening keynote speaker Neel Kashkari, managing director at PIMCO and former chief of TARP.)
CarolynMcC: In "life planning and cash flow management" session by Amy Mullen of Money Quotient. #FPANorCal
BillWinterberg: Caltrain -> Muni -> Palace Hotel this morning for #FPANorCal. Now attending Dave Yeske's session on Tech Developments over the last 10 years
MichaelKitces: Next up - Horsesmouth's Elaine Floyd on Savvy Social Security Planning for Couples. #FPANorCal
jbrentburns: Cash flow mgmt and life planning are the key to success in shifting advice paradigm. Amy Mullen #FPANorCal
BillWinterberg: Today's tech trends: Cloud computing, mobile devices, business analytics, work from anywhere, social media. -Yeske #FPANorCal
MichaelKitces: Floyd session focuses on maximing Soc Security benefits for married couples, survivor benefits, and lifetime divorcee benefits. #FPANorCal
CarolynMcC: Effective communication leads to trust and commitment. Mullen #FPANorCal
MichaelKitces: Eligible divorcees can apply for Social Security former spouse benefit w/o contacting ex-. He doesn't even have to know! -Floyd #FPANorCal
MortgageNudge: 60% of the wealth in US is controlled by women, and most are Advisor Friendly. - Susan Hirshman #FPANorCal
BillWinterberg: About 1/3 of the room responded they have at least one staff member that works remotely. -Yeske #FPANorCal
BillWinterberg: You don't want to make technology decisions one at a time. You need an overarching technology plan. -Yeske #FPANorCal
BillWinterberg: "If I could have just one piece of software, it would be CRM. I'd throw out everything else." -Yeske #FPANorCal
MichaelKitces: Social Security trustees project Social Security long-term COLA at 2.8%. -Floyd #FPANorCal // What do you use for Soc Sec COLA assumption?
BillWinterberg: Yeske's policy: "If you talk to a client, you're not allowed to do anything else before you record the contact in CRM." #FPANorCal
MichaelKitces: When there's spouse age discrepancy, Soc Sec is favorable if older spouse was higher earner. Reverse very unfavorable. -Floyd #FPANorCal
CarolynMcC: People with purpose goals are happier than people with profit goals. Mullen. #FPANorCal
MichaelKitces: File and suspend only works once you reach Normal Retirement Age. NOT at 62. -Floyd #FPANorCal
MortgageNudge: Men and women communicate differently. Leads to breakdowns in interpretation. Hirshman #FPANorCal
MortgageNudge: "What do you think?" for men is call to action; for women is call to discuss. Hirshman #FPANorCal
BillWinterberg: There's no technology out there where someone doesn't find something to hate. -Yeske #FPANorCal
MortgageNudge: Goal of investing for men: To win. For women: To prevent poverty. Pay attention to way you frame risk tolerance. - Hirshman #FPANorCal
MortgageNudge: Women tend to undervalue their own value, leads often to being underinsured. Review insurance policies - Hirshman #FPANorCal
BillWinterberg: Xantrion gets several audience recommendations as a competent IT outsource provider for independent financial advisers. #FPANorCal
BillWinterberg: Yeske: The Internet & our technology allows us to create a 2,400-mile-long hallway between our two offices. #FPANorCal
mkcorbin: SEC sues CCOs. If you appoint one, their career is on the line. -Rupright #FPANorCal
MichaelKitces: Contrary to popular belief? RT @BillWinterberg Clients like virtual mtgs, more convenient 4 them; their time very precious -Yeske #FPANorCal
jbrentburns: Life conversations and financial conversations intersect at cash flows. Mullen #FPANorCal
MichaelKitces: Unfortunately not all Social Security Administration employees are well trained. Sometimes u have to push back on answers. -Floyd #FPANorCal
MichaelKitces: & they're cheap relative to salary! RT @BillWinterberg Yeske: Never seen my staff as excited as when we gave funds to buy iPad2! #FPANorCal
BillWinterberg: Yeske/Buie employees use FaceTime on their iPad2 as inter-office video intercoms. #FPANorCal
MortgageNudge: For women: stay away from "budget," use "spending plan" instead - relieves guilt, provides more appropriate context. Hirshman #FPANorCal
MichaelKitces: Next up at #FPANorCal - Don Knauss, CEO of Clorox about a CEOs perspective on what really matters.
MichaelKitces: "Change is certain; progress is not. The key to progress is leadership." -Knauss #FPANorCal
MichaelKitces: The key to leadership it about rallying people to a better future. -Knauss #FPANorCal
MichaelKitces: Leadership requires both thought leadership (envision the future) and people leadership (energize others to achieve it). -Knauss #FPANorCal
MichaelKitces: Health & wellness @Clorox multibillion company - "we help you kill bad stuff & stop spread of infection" Beautiful. -Knauss #FPANorCal
MichaelKitces: The purpose statement of @Clorox - "we make everyday life better, every day" - love it. -Knauss #FPANorCal
MortgageNudge: 5 traits of effective people: integrity, optimism, curiosity, compassion and humility. -Knauss #FPANorCal how do u relate to these 5 traits?
MichaelKitces: A leader's job is to allocate the resources to make everyone else successful. -Knauss #FPANorCal
MichaelKitces: Things happen faster when you have less formality in leadership structure. It's about organizational agility. -Knauss #FPANorCal
MichaelKitces: This @Clorox leadership philosophy is so brilliant I actually wish I could work there. Are your employees that engaged? -Knauss #FPANorCal
mkcorbin: If you engage people with the creation of the vision, you'll keep them engaged in realization of the vision -Knauss #FPANorCal
MichaelKitces: Laugh line - Last year @Clorox paid 35.5% effective tax rate. "We're making up for GE." -Knauss #FPANorCal
MichaelKitces: Greatest challenge to growth is corporate tax rate. @Clorox has $100m less to invest in R&D compared to non-US companies. -Knauss #FPANorCal
MichaelKitces: Next up at #FPANorCal - Me! "Revisiting Modern Portfolio Theory" in breakout. Sorry, I won't be tweeting from the podium on this one!
jbrentburns: @MichaelKitces won't be able to tweet his own presentation at #FPANorCal, but don't worry...I'll send a play by play.
BillWinterberg: Now "Breaking Through the Clutter" with @spensersegal of Actifi. #FPANorCal
jbrentburns: Revisiting Modern Portfolio Theory. Is it broken? Obsolete? No, but we have been using it wrong. Kitces #FPANorCal
BillWinterberg: "If you're going to keep a collection, make it baseball cards, not software tools." @spenseractifi #FPANorCal
snowtech: #FPANorCal Spenser Segal - if you've got a process problem, technology is NOT going to magically fix it.
CarolynMcC: Charitable clients are often our best so we need to learn how to take care of their needs. McCoy #FPANorCal
BillWinterberg: The next big wave in productivity gains will NOT come from technology, but from process changes. @spenseractifi #FPANorCal
CarolynMcC: Probably won't find out about estate law changes until end of 2012. McCoy. I think two year planning timeframes will be the norm #FPANorCal
BillWinterberg: "He who has the most checkboxes or bells & whistles in technology will not win." @spenseractifi #FPANorCal
jbrentburns: Markowitz's model was not meant to be a long term model and was designed to allocate among stocks. Kitces #FPANorCal
mkcorbin: Neg ?: What's bothering u? Neutral: How's it going? Pos: What's going well? -Jacobson #FPANorCal
CarolynMcC: Too frequent solicitation and being asked for the wrong amount are the major reasons people quit giving to a charity. McCoy #FPANorCal
snowtech: #FPANorCal Spenser Segal - make small changes that succeed rather than big changes that cause instant overload.
jbrentburns: Volatility drags performance. You cannot assume arithmetic average returns. Kitces #FPANorCal
jbrentburns: MPT and time. The optimal portfolio over multi years is different than over one year periods. Optimizers need taming. Kitces #FPANorCal
BillWinterberg: "When viewing a vendor demo, challenge them with example use cases to see how their software really works." @spenseractifi #FPANorCal
mkcorbin: Rebalancing eliminates volatility drag, creates pos return. -Kitces #FPANorCal
snowtech: #FPANorCal Spenser Segal - it doesn't matter what 'eye candy' features software has if it can't solve your core requirements.
jbrentburns: Rebalancing too often systematically drags performance if correlation is higher than we think. Timing has to be perfect. Kitces #FPANorCal
jbrentburns: Diversification does not provide returns. It manages volatility for a given return target. Kitces #FPANorCal
mkcorbin: Universally low correlation between CEOs' understanding of procedures & how workers understand them. Segal #FPANorCal
jbrentburns: There is inherent subjectivity to return assumptions. Unfortunately no right answer to which period. 1926?, 1950?, 1900? Kitces #FPANorCal
mkcorbin: Allocate by region, not by emerging markets/ developed mkts -Carpenter #FPANorCal
mkcorbin: Pfau article in JFP "true professional literature"Veres #FPANorCal
snowtech: "I generally favor cloud based solutions" for CRM #FPANorCal Spenser Segal
mkcorbin: I think Mary Schapiro isn't representing us well because of her previous connections with FINRA -Veres #FPANorCal
mkcorbin: Should advisors plan to die with their boots on? It's a failure of fiduciary duty not to plan for transition. Veres #FPANorCal
CarolynMcC: Attending financial planning update for registered domestic partners. Deb Kinney #FPANorCal
MortgageNudge: Intro to Cloud computing, with Joel Bruckenstein is starting now. #FPANorCal
BillWinterberg: Next up is Kathleen Pritchard on Positioning Your Practice in a Competitive Landscape. #FPANorCal
MortgageNudge: "Each person is pinata of possitives.". Ed Jacobson #FPANorCal
MichaelKitces: All you have to do is hit them with a stick? RT @MortgageNudge "Each person is pinata of possitives.". Ed Jacobson #FPANorCal
BillWinterberg: 3 lessons of powerful brands: Decide who you are, compete on value, not price, and deliver a great customer experience Pritchard #FPANorCal
MortgageNudge: Scalability is key, but under appreciated benefit of Cloud computing - Bruckenstein #FPANorCal. Can scale back down as well.
MichaelKitces: Cloud computing - think like electric grid. Need power, don't buy generator, just plug in & power allocated as needed -@fintechie #FPANorCal
mkcorbin: Cloud Computing cheaper: standardized hardware, lower overhead, better access to top-tier talent.-Bruckenstein #FPANorCal
MichaelKitces: Cloud computing security - do you really think your computer servers are more secure Microsoft's and Google's are? -@fintechie #FPANorCal
BillWinterberg: To improve a mission statement, focus on target market, issues your clients face, solutions you provide & benefits to clients. #FPANorCal
CarolynMcC: Same sex couples can't efile. Kinney. #FPANorCal
MichaelKitces: Many companies think they've never been hacked b/c their technology is so weak they wouldn't even know it happened! -@fintechie #FPANorCal
BillWinterberg: More multi-generational support needed. 80% of female widows leave their advisor within one year of husband's death. -Pritchard #FPANorCal
mkcorbin: Think about a trial period (9 mos) for possible successors -Armstrong #FPANorCal
MichaelKitces: Coud computing inflection point for most firms is when server dies, & firm evaluates whether to replace or change. -@fintechie #FPANorCal
mkcorbin: Best way to find possible successors: stay active in FPA chapter and look there. Armstrong #FPANorCal
CarolynMcC: So important that LGBT couples have their estate planning documents done correctly. #FPANorCal
MichaelKitces: Whether you like it or not, we're moving to the cloud. Most industry providers aren't making desktop-based platforms -@fintechie #FPANorCal
mkcorbin: 80% of lifetime healthcare cost is incurred in last 24 months of life. -Maurer #FPANorCal
mkcorbin: Catch 22 If you keep duration short bc u expect rates to rise, but rates are flat, u lack required duration.-Huxley/Burns #FPANorCal
MichaelKitces: Wrapping up sessions for the day. Time for the (California) wine & cheese! #FPANorCal
If you enjoy this kind of content and want more, be sure to follow some of the active Twitter users who are broadcasting conferences, including Tech guru @BillWinterberg and yours truly, @MichaelKitces. Stay tuned for more conference live-Tweeting experiences throughout the year, and a follow-up post to this one for day 2 highlights of the FPA NorCal conference! And let us know what you think!
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