SCOTTSDALE, ARIZ. – In-between waiting in line for an autographed baseball from Hall-of-Famer Harmon Killebrew and learning the secrets of Navajo flute-making out here in the desert, members of the Investment Management Consultants Association expressed guarded optimism about the markets, their clients and how to improve their businesses.
About 850 financial advisors, executives and other interested parties showed up to the annual Professional Development Conference held this year at the Fairmont Scottsdale Princess golf resort to learn more about investment theory and strategies, and to discuss ethics. But the members also hoped that the conference would help them keep the IMCA organization’s influence growing in the coming years.
The commitment by major firms, at least on a rep level, is certainly evident–about half of the attendees in Scottsdale come from one of the large broker/dealers, including the New York wirehouses and the regional firms. "We think the industry is going the way IMCA is going," said Evelyn Brust, executive director of IMCA, in an interview.
In a way, Monday’s announcement of the $1.4 billion research settlement in New York felt distant, as if it was happening to another industry. IMCA presentations, including the keynote speech by President Richard Joyner and videos focused on ethics, were promoted an upbeat note at the conference. Subsequent presentations, however, could not escape pointing out the still-uncertain mood of the markets, and particularly client behavior.
"Investors are still skeptical," said Robert Fry, director of investments for Merrill Lynch Trust Company, in his Monday remarks, speaking about trying to get in front of clients’ worst impulses–to sell low and buy high, or vice-versa. "Ultimately, clients are all absolute return investors…I think they want to know if it’s more ‘uppy’ than ‘downy.’"
In speaking with Registered Rep., members agreed generally that the organization is seeing greater influence in the industry, whether through its educational programs, a recently added wealth management certification course or a greater effort by its ethics committee to promote ethical behavior in the industry.
Among retail clients, the CIMA is still not a well-known designation. Distinguishing themselves from clients remains a goal for members. "We don’t do a good job of communicating to our clients how we are unique," said John Nersesian, managing director of wealth management at Nuveen Investments-Rittenhouse Financial Services, in remarks Monday afternoon. "We need to make sure clients understand what we do." Some members, however, said during the conference that within their own practices they’ve started to see more referrals from tax attorneys, estate professionals and accountants who familiar with the process of getting and maintaining the CIMA, which involves a week of study at the Wharton School of Business in Philadelphia.
Currently, there are 2,300 holders of the CIMA designation, and an additional 800 were added last year. Already, 16 classes of 50 people are signed up for the coming year–that’s an additional 800 people.
Talking about Ethics
Currently, IMCA’s ethics committee is putting together the agenda for an ethics summit, to be held in September, location to be determined. Members of the committee told Rep. late Monday that the goal is to try to find ways to promote and reward ethical behavior in the industry–the summit is seen as one of the steps in getting the attention of senior management at the various brokerage firms. Committee members said, however, that their mission extends back prior to the revelation of the various research scandals that have tainted Wall Street and hamstrung the images of brokers–but they did admit that interest in the ethics panel has grown in the last couple of years.