Category Archives: Local Charterholders

Changing Perceptions Interview with Mariann Montagne, CFA – Portfolio Manager

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Tell me a little about yourself

I earned my bachelor’s degree in finance from the University of Detroit then immediately began studies to become a CFA Charterholder. I am a portfolio manager at Gradient Investments, an investment firm with $2bn AUM and about 15 portfolios.

What sparked your interest in the investment industry and CFA Program?

I set out to do a book report on John D. Rockefeller in 8th grade. For research, I called Merrill Lynch and talked to a broker. I was fascinated with the amount of information this broker had at his fingertips. Throughout high school and college, I read the newspaper cover to cover and talked with my dad about investments. He also has a degree in finance from the University of Detroit, though he was not an active investor.

How/where did you land your first role?

After my second year in college, I went door to door to brokerage firms, banks, savings and loans and insurance brokerages for about a week. At the end of the week, I had two offers and went with a regional brokerage firm.

Did you have a mentor or champion who was instrumental in your career?

The interesting thing about mentors is that I am still looking for mentors —men and women, old and young people— people with good insights, experience and inputs. But no, I did not have just one.

What professional opportunities and challenges have you experienced?

A few challenges would be keeping up with day-to-day changes in the investment arena, and taking time off to be with my kids for several years. Because I am very eager to learn every day, I find that opportunities may show themselves from new inputs. A big opportunity I had was to come back to work for the same bosses twice in my career.

What is the biggest risk you’ve taken in your career?

The biggest risk I’ve taken was choosing to stay in the Midwest. I have friends who are in New York and can just go down the street for new opportunities. But I really value the honesty and integrity of the Midwest.

What got you here; how have you been successful in investment management?

Along with eagerness to learn, I was naturally an extrovert in an introvert role. I asked questions others are afraid to ask, I take good notes, I ask good questions and compile good data, noting the cadence of performance vs. expectations has been helpful in my career.

18% of CFA Institute’s members are female, and 14% of CFA Society Minnesota members are female. Do you have any thoughts on why more women aren’t pursuing a career in investment management?

I have wondered about this for a long time. I was the fifth woman president at the CFA Society Detroit in 2004. The first woman president was in 1983. I keep looking at the progress. It took 20 years to have the fifth woman president; why 20 years? I don’t understand. I think that maybe we need to address the girls when they’re still in middle school and not wait for the discussion in college. We need to get them interested in the idea of compounding and being patient, long-term investors. I think we just need to start earlier. There’s some unconscious bias by everyone to think that this is a man’s type of profession but look at Muriel Siebert – the first woman to own a seat in the New York Stock Exchange and opened her first firm in 1967. Money is agnostic, it doesn’t care what you look like. Why not just gather the skill set and use some determination? There are a lot of attractive aspects about this business.

Research has proven that the returns of diverse investment management teams outperform those of non-diverse teams. Have you seen this in your experiences?

I think so because most women are more patient and less trigger happy. I know sometimes its client driven and they want to see a change in sells and buys, but women are more cautious about changing from an old horse to fresher horse. Having that level of patience pays off in the long run.

Do you have any advice for young professionals interested in a career similar to yours?

My advice is to be more extroverted than others and resilient, keep that childlike eagerness to learn and always maintain your integrity. Find the place where you respect the people around you – but if you don’t, move on.

As a longtime CFA Charterholder, how have you seen the CFA Program and industry evolve?

When I first started, it was a rarity to hear people say they are studying for the CFA exam. Now, it’s more common. The pass rate is still low, but more people are attempting it. I am blown away by the numbers that are added to the rolls each year.

 

Student Interviewer

Yeng Lee is a first-generation student at Gustavus Adolphus College in Saint Peter. She was born and raised in Saint Paul and was first introduced to economics in her senior year of high school, which really intrigued her. Yeng is studying Financial Economics and English with a writing emphasis. After she graduates, she plans to take the CFA Exam and build on her experience to become a financial analyst. Yeng’s lifetime goal is to be a philanthropist.

Changing Perceptions Interview with Joan Kampmeyer, CFA – Private Investor

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Tell me a little about yourself 

I have a Bachelor’s degree in French from the University of Minnesota.  I went on to get my MBA from the Carlson School of Management at the University of Minnesota and earned my CFA Charter in 1986.

What sparked your interest in the investment industry and CFA Program?

I have always had an interest in business since graduate school. I started out in corporate treasury at a company called Jostens, which was a public company at that time. During my five years with the company, I became Assistant Treasurer with responsibilities that included oversight of external managers running the company’s pension fund. So, through that exposure, I met managers who had the CFA designation, and it intrigued me, though I didn’t really need it in my work at that time.  I thought the CFA was worth investigating, one thing led to another and three years later got my CFA Charter.  At that time, I worked for an investment banking unit that was part of what is now Wells Fargo. It really paid off when I moved to Ameriprise as a fixed income analyst where professionals were strongly encouraged to obtain a CFA.

Did you have a mentor who was instrumental in your career?

I never really had a mentor.  At that time there weren’t a lot of women in asset management; in fact, I can think of only one who was a senior portfolio manager. I think the critical element is not just having a mentor but also making sure you cultivate your network on a regular basis.  That way, when you are looking to make a change, you can tap your network.

The CFA Charter also helped me find a position in asset management.  I went to a CFA Society Minnesota monthly luncheon and sat next to a woman who worked at Ameriprise.  It was she who told me about a fixed income analyst opening.

What professional challenges have you experienced?

My challenge was how to stay in finance yet move my career in new directions. I went from working for a consumer-based company, Jostens, to working for a large banking institution, to working for an asset management firm, and finally a family office. Therefore, the challenge is how to navigate all the different choices out there without thinking of it as too much of a stretch.

What is the biggest risk you’ve taken in your career?

The biggest risk was to leave the corporate world and leap into investment banking.  The nature of work was completely different from what I had been doing at Jostens. In addition, it was a newly formed group with no track record and I was the only female professional.  Lastly, I took a small cut in salary but added bonus potential.

Do you have any advice for young professionals interested in a career similar to yours?

Follow your instincts and don’t be afraid to try new positions and industries. Every job is different, and there are a lot of opportunities in the world of finance and investments. You may have to take more of a zigzag path, but that can actually make it a lot more fun.

 

Student Interviewer

Francine Umumarungu is from Kigali, Rwanda, and a senior at Gustavus Adolphus College majoring in Financial Economics. Her plans after graduation are to take the CFA Level One Exam in December and apply for a job in the finance or investment field to gain work experience before embarking on the rest of the CFA Program.

Spatchcocked

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Susanna Gibbons, CFA

Always on the lookout for a better way to prepare a Thanksgiving dinner, I recently came across what I believe to be the latest and greatest method: Spatchcocking. By removing the backbone of the Turkey, you are able to lay the Turkey flat on a cookie sheet, and roast it in a little over an hour. According to my research, the bird will cook thoroughly & evenly, and the shortened roasting time (not to mention height in the oven) makes preparation incredibly efficient.

Interestingly, it appears that spatchcocking is also the rage on Capitol Hill. After a year with few achievements to show for it, there are many members of Congress who appear to have very little left in the way of a backbone. As a result, the current tax plan is being rushed through the legislative process at an incredible pace. Whether this level of efficiency is as desirable in re-writing the tax code as in cooking turkeys seems highly questionable.

As investment professionals, how can we make sense of this process, and incorporate the proposed changes into our analysis? I don’t think we can. There seems to be overwhelming agreement that the tax code is too complex, and needs to be simplified, and that taxes (especially corporate taxes) are too high, and need to come down. The headline grabbing number of reducing the statutory tax rate from 35% to 20% suggests that a lot more money will be dropping down to the bottom line, and this belief has fueled the continued rally in equities.

However, if you look at what corporations actually pay in cash taxes, the Companies in the S&P 500 are, in the aggregate, paying an effective tax rate of – you guessed it, 20%. If the deductions and tax breaks that currently riddle our system are eliminated at the same time, there shouldn’t be any drop in taxes paid. Instead, you will see a shift in the winners and losers. Some companies that currently pay next-to-nothing will have to start writing checks, and others will likely get some relief.

It is virtually impossible to anticipate all of the implications of such a significant structural shift in the tax system. The Commonwealth of Puerto Rico provides a cautionary tale as to the dangers of such dramatic shifts. In the 1970s, Congress passed Section 936 of the tax code to encourage manufacturing companies to locate on the island, which spurred growth. When the tax break was eliminated in the 1990s, it kicked of a long cycle of deterioration from which Puerto Rico has yet to extricate itself.

Now, I am not arguing that we ought to use the tax code to achieve such narrow policy objectives. In fact, I think it is a terrible idea. I mean – Section 936? That’s a lot of sections of code.  I do think that simplification is good idea. But unwinding this mess will be hard. Our entire economy has evolved alongside this current tax system over years, and companies have structured themselves, made investment decisions, and planned for a future based on that system. A complete and sudden shift will be economically jarring. There is enormous complexity to simplification, and the risk of unintended consequences will be high.  Before running off spatchcocked to push through this turkey of a bill, I really hope Congress slows down a little. Instead of ending up with a tasty roast, the long-term impact of hasty tax reform could be pretty foul.

Event Recap: “Inclusion in Investment Management: Beyond Checking the Diversity Box”

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By Amanda Carter, CFA and Charles Hannema

The CFA Society of Minnesota hosted a panel discussion on the topic, Inclusion in Investment Management: Beyond Checking the Diversity Box on October 4, 2017. The panel was facilitated by Kim Brustuen, CFA, SVP and National Sales Manager – Corporate Treasury, US Bank with Colin Lundgren, CFA, Global Head of Fixed Income at Columbia Threadneedle, and Paul Smith, CFA, President and CEO of the CFA Institute, as panelists.

In response to questions prompted by Bruestuen and the audience, Lundgren and Smith articulated how Columbia Threadneedle and the CFA Society defined diversity within their respective organizations, how definitions vary across different global constituents, and how having a diverse talent pool has benefited the investment management community.

Kim Brustuen referenced a McKinsey & Company white paper, Diversity Matters , in her comments and questions. The McKinsey paper cited analysis showing a statistically significant relationship between a more diverse leadership team and better financial performance. Much of the discussion centered on gender diversity and why, although strides have been made at entry level for women, there are still significant concerns about gender diversity in senior management. Paul Smith noted that female candidates outside the United States comprise a much larger percentage of candidates in the CFA Program.

The discussion, in our opinion, prompted more questions than it answered, particularly with respect to diversity that is not gender related. The evening reinforced the value of deliberate inclusion of diverse thought and background while prompting the need to expand the discussion.

    

Additional event photos are located on our society Facebook page https://www.facebook.com/cfaminnesota/ 

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