CFA Society Minnesota Members Spotlight #2

· · Leave a comment

Craig Popp, CFA, CRPS
Financial Advisor
Raymond James Financial Services

Craig Popp, CFA, CRPS

Craig Popp, CFA, CRPS, has a gift for cultivating relationships, and that skill is critical in his work serving clients’ financial and investment needs. As a financial advisor specializing in asset allocation and portfolio construction, Craig works with clients to design investment portfolios that meet their needs.

When a 20-year-old Craig answered an advertisement in the local newspaper (back when want ads were still a thing), he was simply looking for a better job. He had no idea he would be meeting his future business partner.

Craig at that time was working part-time at a warehouse in Willmar, Minnesota, where he made the financial decision to attend Willmar Community College for his first two years of post-secondary schooling. He carefully read the advertisement calling for an office assistant at a financial services firm and soon met Eric Weiberg, CFP, and his wife, Alice. Craig said working alongside Eric and Alice helped solidify his desire to work in the financial services industry.

“I saw how they had such strong relationships with their clients,” he said.

Craig continued on his educational journey and graduated from Saint Cloud State University’s G.R. Herberger Business School, where he was active in the Investment Club and helped manage the Husky Growth Fund, a university-owned portfolio managed by students.

An early yearning

Craig, a Rice, Minnesota native, knew he wanted to pursue a career in finance from his first high-school business classes and a special two-week stock market segment. After graduating in 2000, Craig began his career at a time when “things were interesting.”

“It was easy to buy a stock and make money,” he says.

After completing his undergraduate degree, Craig began a 15-year career at RBC Wealth Management in Minneapolis, starting in operations and rising to the position of Senior Global Manager Research Analyst.

Path to becoming a CFA® charterholder

At the time, “the CFA wasn’t then what it is now in terms of popularity,” but Craig knew the credential was important for where he was headed in his career. He took Level 1 while working in operations. He continued his quest while advancing at RBC, joining the firm’s manager research team between Level 1 and Level 2 and earning his charter in 2007. Craig also served as a voting member of RBC Wealth Management’s Discretionary Investment Committee, which manages the firm’s discretionary mutual fund portfolios.

Craig continued his professional advancement and was fortunate to work for an organization that supported his pursuit of an MBA, which he earned at the University of Minnesota Carlson School of Management.

“I found with in-person classes, the connections you make, many of us are still connected,” he says. “Many of us had aspirations of having our own businesses.”

The opportunity

Just as he stayed in touch with many in his MBA cohort, Craig continued to stay in contact with his first supervisor in the financial services industry, Eric Weiberg. The two men had a connection in the industry and would regularly visit a few times a year.

“We were actually golfing and he casually said, ‘Would you ever think about getting in my side of the industry? I’m going to retire someday, and I think you are someone who is going to be good at this.’”

That invitation was issued nearly ten years ago, and Craig was thoughtful and deeply intentional about the possibility. 

At first, moving out of the metro was a concern, but after some conversations with Eric, Craig began to realize that, “most of what is there that you think you need, you don’t always utilize.”

Craig saw that Eric and Alice “knew I had experience in the industry, and felt I would be a good fit for the client base,” he says. “They knew in me they had someone they could trust, someone who understands doing things the right way.”

Craig joined the business with the intent to purchase it and he loves his new community of Willmar.

“Day-to-day life is very easy,” Craig says. “We live five minutes from the office. I go home for lunch once or twice a week.”

The adjustments to the COVID-19 pandemic have been surprisingly minimal.

“We are such a small office that from a work perspective we haven’t changed much,” Craig says. “We have a few more virtual meetings with clients.”

The biggest COVID-19 effect was its delay in making a new hire. Craig had posted a position and reviewed résumés in mid-March, and just now concluded the search. “In fact, we just got an acceptance today,” he says of a new associate financial advisor who will develop into a planner in the future.

When Craig and Eric formally welcome their new hire for that person’s first day of work, they will have come full circle. After all, this is a team that maximizes relationships for today — and tomorrow.

In Craig’s own words

If you weren’t a CFA® charterholder, what would you be and/or do?

I’d be a professional poker player. I enjoy the intellectual side of poker. It’s kind of like investing. You are working with incomplete information and you have to make clear decisions based on a probability. I don’t like slots; I like playing cards because you have to think.

What is one thing people who know you would be surprised to learn about you?

I grew up on a dairy farm. I’ve definitely adapted to being a city person, so this surprises people.

How do you spend your free time?

My wife and I enjoy dining in a nice restaurant, or a weekend getaway to Minneapolis/Saint Paul, where we will try out a new restaurant. We have two dogs (Cooper, a Shih Tzu Poodle, age 2, and Laylah, a 4.5 pound Shih Tzu Maltese Yorkie mix, age 9).

Craig Popp earned his MBA in entrepreneurship from the University of Minnesota Carlson School of Management and he holds a bachelor’s degree in finance from St. Cloud State University. Craig currently holds FINRA licenses: Series 7, Series 63 and Series 9/10. Learn more about Craig and his insights on his blog, The Cognitive Bias, at https://cognitivebiasblog.com/

CFA Society Minnesota Member Spotlight

· · Leave a comment

Nathan Erickson, CFA, CAIA
Senior Vice President/ Client Portfolio Manager
Bell Institutional Investment Management

Nathan Erickson, CFA, CAIA

For a client-facing portfolio manager who enjoys serving his Bell Institutional Investment Management clients through both relationships and analysis, Nathan Erickson, CFA, CAIA, has a remarkably good setup to socially distance during a pandemic. After a quick, ten-minute commute to his office at Bell Bank in downtown Fargo, North Dakota, Nathan can take a back stairwell up to his office and only encounter two to three other people. On other days, he can work from home depending on what’s on his schedule.

As Senior Vice President/Client Portfolio Manager, Nathan meets with the boards and investment committees of endowments, foundations and retirement plans to properly understand their goals, effectively manage their investment portfolios and consult on their Investment Policy Statements. Nathan also chairs Bell’s Fund Committee, which selects investments and monitors capabilities for institutional clients and directs investment recommendations for wealth management clients. Additionally, he oversees the research for alternative investments and ESG portfolios.

Impact of COVID-19

COVID-19 has forced a number of adaptations in all aspects of life and work for people across the globe. Yet it hasn’t slowed the speed of business, especially in the investment industry.

Nathan remembers the third week in March when “everything became real” and Bell Bank sent home everyone who had the ability to work remotely.

“I went home immediately and worked only from home for three months solid,” he said.

In June, Bell Bank began a return-to-work approach based on personal choice.

“Lately, client meetings have been a mix of videoconference and in-person, depending on the preference of the organization I am meeting with,” he says. “In-person meetings are still different, however, with bigger rooms for social distancing and masks in some cases.”

A big move

A native of Fergus Falls, Minnesota, Nathan made very big decisions after high school. He pursued his education, becoming the first member of his immediate family to receive a bachelor’s degree or higher. He fell in love and married his wife, Jeanette, just ahead of their senior year in college. Together, they chose to move “somewhere warm” and selected Arizona after his wife was offered a teaching position in downtown Phoenix.

Nathan and Jeanette had no friends or family in Phoenix, but they fearlessly packed everything up and made a big move that lasted eight years.

Shortly after arriving in Arizona, Nathan started as a financial advisor at a comprehensive financial planning firm focusing on medical professionals. Later he had the opportunity to move over to Vanguard as a relationship manager in the firm’s High Net Worth department. 

Path to becoming a CFA charterholder

Nathan originally planned to pursue the CFP credential because he hadn’t been as exposed to the CFA. Once he learned about the CFA, he knew “it was the track I wanted to go down.” He enrolled in the CFA program and transitioned within Vanguard to become an investment strategist for retirement plans.

After signing up for his first test, Nathan found out his wife was pregnant with their first child. He embraced his new role of helping to take care of a baby while soldiering forward with his studies, partnering with other professionals in a Vanguard CFA study group and networking with others studying at CFA Society Phoenix events.

As Nathan’s first child continued to grow and the Ericksons were blessed with two more children, they decided to “raise their kids in four seasons” and gift them with proximity to cousins, grandparents, aunts and uncles in the Upper Midwest.

CFA Society Minnesota to the rescue

Nathan credits Tom Crandall, CFA, CAIA, now a member of CFA Society Minnesota Board of Directors, as an essential colleague in helping him network and plug in to the region.

“Tom was tremendous in getting me connected,” Nathan says. “I was amazed at how many members who didn’t know me at all were willing to spend an hour with me.”

Nathan is always thankful for connections, but he soon realized that CFA Society Minnesota offers so much more through its amazing members.

“It’s nice being part of a community and meeting with people who have the same dedication to advancing their knowledge in the investment industry, share ideas and have similar career aspirations,” he says. “We are all numbers people and we tend to get along.”

Nathan explains his joy of work: “Some people who really love data are analysts. Others are relational and enjoy talking with people and getting to know them. And then there are people who are in the middle — that’s me.”

In Nathan’s own words

How did you get engaged in the industry?

I would say I didn’t truly “engage” in the industry until I found the CFA Society Minnesota. My first few years in the industry I was focused on surviving. It wasn’t until I had a few years of experience that I started to look outward. When I found out more about the CFA Institute and local societies, it was exciting to know that I could be a part of a community of professionals. 

How do you engage with your community?

I am an executive mentor at the Minnesota State University Moorhead Business School. Each semester, I mentor seniors and help them understand the financial industry, types of jobs available, career tracks and designations. I also review résumés and help the students advance their writing and interviewing skills. 

How do you spend your free time?

Free time, what’s that? We have three kids 6 years old and under, and for some reason, we recently added a puppy to the mix. Free time is hard to come by, but I do enjoy golfing, hunting, and going to the lake on weekends.

Nathan Erickson holds a bachelor’s degree in Business Administration from Minnesota State University Moorhead and an MBA from the University of Mary.

Connect with Nathan on LinkedIn.

Intellisight 2020, from a Student’s Viewpoint

· · Leave a comment

By Jason Chen
Financial Math Graduate Student at University of Minnesota

Jason Chen

I went to the presentations of all three financial companies (Physicians Realty Trust, StoneCastle Finance, and Piper Sandler Companies). I chose these companies because I am a graduate student majoring in financial math, so I’m more familiar with this topic in general compared with consumer goods, industrials, etc. I wanted to learn more about these financial companies, what they do, and what information they would choose to make public. It was a great opportunity for me to know more about the industry and gain more experience. What I took away from these presentations was probably not as comprehensive as other audiences because I am not an investor, and the content of the presentation itself was not as useful to me at present. What was important to me was the experience: I learned how companies would introduce and present themselves, their concepts in the business, and how to handle questions and other unexpected things that can happen during a meeting. So, overall, that was a very interesting and helpful event for me.

A virtual conference is very different than an in-person one, and my overall experience of Intellisight 2020 was very positive. I’ll list some pros and cons on both sides from my perspective. Virtual conferences are very convenient and easier to organize. Audiences don’t have to physically go to the conference; they could simply log on virtually sitting in their office/home. Likewise, the organizer doesn’t have to set up the conference room/building, and there is not a lot of equipment needed. Theoretically, conference organizers would save a lot of time/energy preparing for the conference. But, speakers will deliver much better content in the in-person conferences. Speakers will have communications and interactions with the audiences and the audiences are able to participate more directly. It was very hard to stay focused on a screen to follow everything the speakers said all the way from the beginning until the last session in the afternoon. I believe audiences get tired easier and can be easily distracted in a virtual conference.

I think the organizers did a very great job preparing for the conference and made me feel like they had done it virtually many times. There were no mistakes or technical issues I experienced. But there were things I feel like could be improved. Each session was very short and limited from the company side that 35 minutes were not enough for them to finish everything. So, typically they went fast, and as a listener, it was very hard for me to catch and follow everything, especially when there was one session after another. We couldn’t see the speakers, so staring at the slides for the whole time was easy to lose focus and we couldn’t just raise our hands to ask questions, but instead needed to type in our questions. But the speakers would pause to wait for questions, and it would take a few minutes to just answer a question. So, after a few times, the audiences just didn’t ask questions.

I would participate in a virtual conference in the future. I believe the main reason that not too many people asked questions during the conference was each session was too short. Most presenters didn’t have enough time for Q&As. They only had time to answer 2 or 3 questions. So, if presentations were longer in the future, I would definitely participate. 

Milton Friedman Was Wrong About Everything

· · Leave a comment

By Susanna Gibbons, CFA
Managing Director, Carlson Funds Enterprise
Carlson School of Management, University of Minnesota

Susanna Gibbons, CFA

In 2013, Paul Krugman wrote an opinion piece titled Milton Friedman, Unperson, in which he suggested that the Nobel Prize-winning economist had essentially vanished from the scene of economic policy-making. He highlighted two key points: First, not only is monetary policy not sufficient for management of an economic crisis, the Fed cannot even control the money supply itself using monetary policy. Second, the link between unemployment and inflation is tenuous at best, rendering it less-than-useful as a policy tool. We are seeing this play out today, as the Federal Government (at least initially) unleashed unprecedented fiscal stimulus in an effort to minimize the downside economic impact of the coronavirus-induced recession.

There is, though, another area where Milton Friedman’s influence continues to be felt. In 1970, he wrote an essay titled A Friedman Doctrine: The Social Responsibility of Business is to Increase its Profits. This piece rested on the same free-market ideology upon which he built his economic theories, and essentially laid the groundwork for the greed-is-good generation. On this point, in spite of the steady march of the country towards incorporating ESG factors into their decision-making framework, policymakers from the Department of Labor continue to rely on the Friedman Doctrine. They have proposed new rules, which would impose burdensome requirements on anyone who dares to mention an ESG-based argument.

These rules display a real fear that this mysterious “ESG” is really a socialist plot intended to saddle pensioners with weak performance while simultaneously forcing corporations to provide chakra-reading reports instead of profits.  The rules require investment managers to prove that there are no non-economic considerations at play, imposing a new burden on those who have developed robust ESG integration policies to prove they don’t benefit personally, while strangely assuming that managers who do not integrate ESG are somehow engaged in a better fiduciary process because they ignore, say, the long-run economic risk of climate change.

The backstory for the proposed DOL rule is the Friedman Doctrine. The theory of shareholder supremacy really came into its own as a result of the initial LBO wave of the late 1980s, when entrenched managers were forced out of power by corporate raiders. I was fortunate to be sitting in Delaware Supreme court to hear the management of Macmillan explain why they could ignore Robert Maxwell’s higher bid for the sale of the company, and found their self-described actions to be such an egregious violation of their duty of loyalty. The Delaware Supreme Court agreed with me 😉 noting in its decision that evolving law required “the most scrupulous adherence to ordinary standards of fairness in the interest of promoting the highest values reasonably attainable for the stockholders’ benefit.” [1] So there it was, shareholder supremacy enshrined in law, and I agreed whole-heartedly with that decision.

That law, so seemingly straightforward, has become increasingly complicated to apply. In its decision, the Court did not say anything about ignoring the long-run consequences of legitimate business choices. It said that the Board and Management could not make decisions for their own benefit instead of the general shareholder. It is specific with respect to timeframe – this was part of an auction process, so there was no trade-off between the time preferences of different owners. This is actually a pretty narrow situation that has become broadly applied.

For a going concern, the concept of maximizing profit is beguilingly simple, but in real life, managers are constantly presented with complex trade-offs between short-term considerations (earnings this quarter) and the long-term health of the corporation (investing in supply chain redundancy to protect against loss of key products in a pandemic). And that’s really what ESG is all about: forcing all of us to think about the complexities of those trade-offs.

The only way to make sense of the Friedman Doctrine is to extend it well beyond the plain text of the original essay. The long-run health of the corporation, and therefore its ability to maximize profits, depends entirely upon the health of the system in which it does business. If it ignores the welfare of its employees, the health and safety of its customers, and the viability of land upon which it rests, its value will deteriorate. The corporation is a creation of the state – it owes its very existence to a political act. To have the little Adam of our labors[2] turn on is, claiming it owes us nothing, is preposterous on its face. If the corporate form does not serve society, then we can get rid of it.

But what the heck do I know? Milton Friedman was a Nobel prize-winning economist, and I’m just a middle-aged Mom sitting in the basement doing laundry.

[1] https://law.justia.com/cases/delaware/supreme-court/1989/559-a-2d-1261-5.html

[2] This is a reference to Mary Shelley’s Frankenstein, in case you never actually slogged your way through it.

A Letter from Our President

· · Leave a comment
Chris May, CFA

Thank you, is all I can say. As we close out the 2020 fiscal year (Sept 1 – Aug 31), I do not need to rehash all of what has transpired over the past 12 months (and continues to plague us daily). However, I do need to say thank you to so many people. While most of you do not think about CFA Society Minnesota (CFAMN) on a daily basis, or even a weekly basis, the staff and volunteers at CFAMN do and continue to make this organization thrive. Like most organizations, we had to unexpectedly shift the way we operate in March 2020. While we are still working on the best way to deliver content and meaningful connections, we have made some serious progress in these endeavors.

Recently, Intellisight was switched to an entirely virtual conference, on top of transitioning to a new platform vendor. At the beginning of the shutdown, the annual Putting Investors First event was both moved to a virtual format and the discussion was changed to reflect what was happening in the world.  We also had near-record attendance at the socially distanced golf outing. The staff worked hard to deliver these events, and many others, while battling the Zoom fatigue that we all have come to know so well.

I’d like to thank several individuals and groups, beginning with the staff:

Mark Salter – joined as our Executive Director in 2012 and has led the CFAMN team successfully since. We are lucky to have him guiding the organization while remaining calm and positive despite the challenges faced.

Diane Senjem – As she entered her ninth month of pregnancy, she was still hard at work preparing events and leading volunteer committees. Her ability to work ahead, gave everyone some breathing room when she went on maternity leave in April. She is now back, and we are grateful for that!

Megan Millett – The newest member of the team and likely the least well known as a result. Megan joined in a part-time capacity in 2019 and then stepped up in a big way (Intellisight 2020) as she moved to full-time earlier this year. She has delivered under pressure with grace and humor despite being the new kid on the block.

Additionally, I’d like to thank all of our volunteers. Whether you have helped at an event, contributed to the blog, served on a committee, or on the board, your contributions are critical to our success. While I won’t name all those that have contributed meaningfully, I did want to thank two individuals.

Sam Somuri, CFA, CFP, CAIA and Mark Traster, CFA both completed their terms as board members after serving eight and seven years, respectively. Thinking back to where our organization was at the time when they joined, we have made incredible strides and they were significant contributors to that success. Thank you both – although neither of you are off the hook yet entirely J

Another component of our success is the support that we receive from our sponsors. While this may not have been the year that any of us were expecting, we appreciate that you have stuck it out with us while we are doing our best to continue to deliver a positive experience for our members. Without you, we would have to cut back on many of the things that our members enjoy most. Thank you for your partnership.

To conclude, I want to thank our members. This has been a wild year and we appreciate the incredible patience that we have received from you all. We know that in many ways we weren’t able to deliver some of what you expected from us this year. We continue to try out ways to provide engaging content and offer opportunities to develop meaningful peer relationships. The latter has been particularly tricky thus far. However, on a positive note there has been a significant acceleration of our plans to offer more digital content (a special thanks to CFA Institute for providing us access to Zoom). This was the swift kick that we needed to get over a few hurdles. Thank you for bearing with us while we continue to refine this. Check out our archived webinars here.

In a year when everyday things were so hard, it feels good to think back on the positive aspects and to fully appreciate them. Be sure to check out our 2019 Annual Report to catch up on other activities. In a world of polarization and division, inclusiveness and gratitude are in short supply. Please join me in spreading the latter by thanking someone mentioned above.

Again, thank you all. We are looking forward to an even better year ahead.

Sincerely,

Chris May, CFA
Society President

PS – If you have not yet completed our short membership survey, please do. I get it, no one loves filling out surveys, but it helps inform our plans and we would greatly appreciate your feedback. Thanks!