Inside Look: The Financial Planning Association’s Annual Conference
Recently, on a quintessential New England fall weekend, Boston welcomed over two thousand personal financial planners from all over the United States and nineteen countries. The Financial Planning Association’s annual conference, held at the Boston Convention and Exhibition Center, was — once again – the largest annual gathering of Certified Financial Planners.
I was excited to attend the event, knowing that I’d get a chance to connect, learn from, and share ideas with fellow CFP®s from all over the world. I was also looking forward to hearing from the keynote speakers – 1980 U.S. men’s hockey team gold medalist Jim Craig and preeminent futurist Dr. Michio Kaku. The conference had a number of great sponsors, and I was especially interested in chatting with alternative investments managers and technology solutions providers.
The weekend began with the presentation of our colors and Jim Craig sharing “Gold Medal Strategies” and lessons from the Miracle on Ice team. Jim reminded the financial planning community to always be mindful of its role, “helping clients reach their financial goals and dreams.” He recommended us to always be learning and improving, and to never get “comfortable”. His final piece of advice centered on building a firm with a great culture and family atmosphere, capable of working with multiple generations of the client’s family.
Over the next 2.5 days, I attended a number of compelling and thought-provoking educational sessions. A few highlights follow:
- Principal of a Social Security Claiming Strategies software company and college professor, Dr. William Reichenstein, CFA, discussed “Tax-Efficient Withdrawal Strategies in Retirement.” He described ways to optimize withdrawals from taxable investment accounts, tax-deferred accounts (Traditional IRAs), and tax-exempt accounts (Roth IRAs) – in an effort to extend the spending longevity of a family’s retirement savings. He showed how a planner can help their client enjoy an additional 5 to 6 years of spending strictly through proper withdrawal strategies.
- Marketing expert David Meermat Scott encouraged planners to earn attention online by creating great information – videos, blogs, charts/graphs, tweets, infographics, etc. – that current and prospective clients will find interesting and valuable.
- Attorney Jeremiah W. Doyle IV, J.D., LLM, discussed the “Tax and Estate Planning Aspects of Divorce,” sharing ideas that will make planners better advisors for clients affected by divorce.
- An excellent panel sorted through the “Options of Qualified, Personal, and Non-Qualified Retirement Plans”. They went through case studies of plans that allow clients to maximize their tax-deferred retirement savings, and stressed the growing need for fiduciary-quality advice from sponsors of corporate retirement plans.
- An “Investment Planning Roundtable” allowed advisors to share ideas and approaches to investing in today’s volatile and globally interconnected market environment.
- Money magazine moderated a panel discussion titled, “Do Women Need to Manage Money Differently than Men?” Panelists emphasized that, “while financial management tasks have no gender… women often have different priorities and concerns that may impact how they make financial decisions.” An example of a gender-specific priority is longevity – and the associated risk of outliving one’s money. Many of the concerns stem from the financial “confidence gap.” While studies have shown that men and women earning a similar salary have a similar level of financial knowledge, men have tended to be overly confident in their knowledge, while women expressed a lack of confidence. Studies have further shown that, partially due to the longevity concerns and partially due to the confidence gap, women tend to invest more conservatively – which has led to portfolios managed by women outperforming portfolios managed by men by around 2% per year! As we at Twelve Points are advocates of a conservative approach to investment management, I was not surprised to hear that this conservative approach has led to better results.
- The joint AARP & Financial Planning Association Social Security Study results were released on the final day of the conference, followed by a panel discussion with representatives from the Social Security Administration, AARP and FPA. The panelists highlighted some of the Social Security knowledge gaps and encouraged financial planners to play a role in closing these gaps.
The conference concluded with a view into the future, as Dr. Kaku described the coming technological and science advancements – and the ways they will impact our lives. He elaborated on the fact that science has contributed to the previous three “revolutions” which have led to tremendous global wealth creation (industrial – steam engine, the invention of electricity, and computers), and predicted that the next revolution will be spurred on by advancements in nanotechnology and biotechnology. If Dr. Kaku is right, there are two main implications – when investing, overweight science and technology and prepare to live to well over 100. Most financial planners working with clients on budgeting for retirement living expenses don’t plan for such prolonged lifecycles – but maybe they should. The timing of those decisions are obviously subject to sector valuations and each individual’s life expectancy. Dr. Kaku also touched on the trend of digitalization of financial planning and investing, saying that “Robo-Advisors will not eliminate financial planners”, but instead be a tool that is used by planners to deliver better and more efficient services to their clients.
The conference was a success – and I’m very thankful to fellow Financial Planning Association Massachusetts Chapter members for planning and organizing this great event!