Monthly Archives: August 2017

A Letter from Our President

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Joshua M. Howard, CFA

Society members –

This is my final letter to you as President of CFA Society Minnesota – my two-year term as President comes to an end this month. At our annual meeting last week, the membership voted in the new slate of board members and executive officers, including your new President, Mark Peiler, CFA. I will be assuming the role of Immediate Past President for the next two years, then my service on the board will end (though not my participation in the Society).

Before I depart, I would like to thank a few people. First, I want to thank all of the past Presidents of CFA Society Minnesota that I served with during my time on the board: Tony Carrideo, CFA, Leyla Kassem, CFA, Robert Buss, CFA and Kim Brustuen, CFA. Your vision and commitment laid the groundwork for the transformation of the Society that has occurred over the past eight years. When I joined the board in 2009, the Society’s activities were restricted to a monthly lunch, a golf outing and an annual economic dinner. Thanks to the leadership and energy of Tony, Leyla, Robert and Kim we now offer a wide range of activities that meet the needs of almost any member. These range from half-day Insight series programs, a major investor conference, periodic distinguished speaker events, a well-attended annual new charterholder dinner, and plenty of free happy hours and networking events.

Second, I want to thank all the board members and committee volunteers I have served with during my time on the board. Their hard work and ideas led to many new initiatives, including the very successful compensation survey, which has grown from a local survey to one that now includes the entire Midwest and a few states outside our region. The Membership Committee runs a mentoring program that over the past few years has connected dozens of younger financial professionals with experienced industry veterans. Seven years ago, our Education Committee launched our own intensive review courses for all three levels of the CFA exam, which have served hundreds of candidates since their launch.

Besides these new programs, our Strategic Planning Committee spent a good portion of the last five years rewriting our mission and vision, as well creating a new, 3-5 year strategic plan. We also updated our bylaws, aligning these with best practices in governance and our relationship with the CFA Institute. Anyone who has ever tried to write a mission statement or attempted to craft a strategic plan knows how much work goes into these endeavors, and I want to thank everyone on the Board who helped with these documents.

I also want to sincerely thank our staff – Mark Salter, Amanda Sullivan and Diane Senjem, along with former staff members Kris Kautzman and Maren Amdal – for all their hard work over the years. None of the programs and activities mentioned above could have happened without their efforts. They took every idea we threw at them and somehow turned them into reality, no matter how far-fetched or challenging they seemed.

Finally, I want to thank you, our members. Thank you for volunteering with the Society, for attending events, for paying your dues, for suggesting how we can improve and for occasionally reading these letters. Thank you for adhering to the highest standard of ethics, for your commitment to the industry and for mentoring the next generation of investment professionals. We have accomplished a lot in the past eight years with your input and help, and I look forward to attending events alongside you as a regular Society member in the future.

Josh Howard, CFA
President, CFA Society Minnesota

For the Financial Professional

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Fred Martin, CFA

The financial services profession is generally highly lucrative, ensuring that financial professionals do not need to worry about their own financial well-being.

But there is a catch to this prosperity.

From the very first day they join our industry to their last day of employment, a financial services professional will face a critical question: Will my actions today align with my client’s best interests?

There’s no middle ground. 

You see, our industry is lucrative so that we never have to put our own interests ahead our clients. So how does a financial services professional know whether their actions are aligned with their client’s best interests?

The answer is simple. 

If you are a professional and your actions do not CLEARLY line up with your client’s best interests, then you are not acting in their best interests. Notice that I have taken out the ambiguity here. You are either CLEARLY in the right zone or you are not.

If you are a financial services professional, you face two major roadblocks to protecting client’s interests.

The First Roadblock: You.

Are you acting properly? Can you take the simple test above and answer that you are clearly working in your clients’ best interests? If not, you should consider some serious soul-searching and a change in your business practices.

The Second Roadblock: Your Company.

What if your company has policies and procedures that you know are not in your clients’ best interests? In this case your choice is to fight or to leave. Neither choice is easy.

At the end of your career, you will be remembered as either one who tirelessly protected and nurtured your clients or one who protected yourself and your employer?

Our industry needs more professionals who will clearly look out for their clients…at any cost.

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Fred Martin is the Chief Investment Officer at Disciplined Growth Investors and is a 32-year veteran of the money management business. He is the founder of Objective Measure, a conference based in Minneapolis that is bringing clarity and trust to the financial services industry and providing tools for effective financial leadership.

To find out more about Fred Martin or The Objective Measure Conference, click here.

It’s Time to Talk

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Fred Martin, CFA

Two things have defined my adulthood – marriage and managing investments. My first marriage of 33 years ended in divorce and I count it as the greatest failure of my life. Today, I believe my industry – financial services – teeters on the same edge of failure.

Everywhere I look I see signs that my industry’s relationship with our clients is headed for a breakup every bit as profound as a divorce. The vast majority of investment management relationships are not productive. Both advisors and clients can sense the dysfunction but just do not know how to make things better. Just as a failing marriage is a shared responsibility of spouses, the alarming state of the financial services industry is the responsibility of both advisors and clients.

I believe it’s time to talk.

It’s time to have a candid conversation about active financial leadership and what standards we should have in place…as advisors…as clients…as leaders of businesses and leaders of homes. It’s time to identify and talk about the core truths of investing and financial relationships. It’s time to make the financial services industry a source of trust and stability and a place where client problems are solved. It’s time to identify the fundamental truths and unlearn the bad habits that harm investing and lead to unproductive, frustrating relationships.

It’s time to learn what active financial leadership really means.

On October 5, 2017, we are joining together outside of Minneapolis, at the Ames Center, for the first ever Objective Measure Conference. This conference is the start of this movement that we so desperately need to have. It can mark the beginning of healing between advisor and client. It can signify the beginning of a new season for the industry, unlearning those bad habits and setting new and better expectations. It can be the beginning of a bright and hopeful future.

If you’re skeptical that one conference will be able to achieve these goals, you’re not alone. I don’t believe it either. What I do believe, though, is that one conference can be the seed that triggers a catalytic reaction far beyond the Ames Center on a day in October. And we will follow this conference with at least 10 more annual conferences.

It’s the start of a conversation. It’s the start of a movement.

The future is unknown. Yet there is much we can do today to prepare for the questions of tomorrow. So let’s start now with rebuilding trust in the financial services industry.

Please join me on October 5th. All CFA members are invited to attend at a reduced rate, simply enter “cfa17” into the username and password.

To find out more about Fred Martin or The Objective Measure Conference, click here.

Read the Minneapolis Star Tribune’s Conversation with Fred Martin

 

Fred Martin, Founder, Lead Portfolio Manager, Disciplined Growth Investors