If I had a nickel for every time I’ve heard a veteran financial adviser wax nostalgic over brokerage conferences from days gone by, I’d have, well, a lot of nickels. Many veteran advisors will tell you candidly that in the old days, the annual B-D conference was a cherished and eagerly anticipated gala event. It was an opportunity to travel to exotic locales and party like a rock star – all at the B-D’s expense. The accommodations were strictly 5-star, the food was limitless and to die for, and the wine flowed like water. As far as I can gather, there was very little actual conferencing per se at these events and the primary purpose was to reward advisers for their sales efforts over the previous year. The word “conference” appears to have been more of a tongue-in-cheek euphemism for “boondoggle”. My sources tell me that E.F. Hutton was the undisputed heavy-weight champion of the boondoggle, escorting its advisors in limousines, flying them first class to their destinations, and sponsoring certain entertainment venues that would likely be deemed inappropriate by today’s more Puritanical brokerage standards.
Obviously, the brokerage industry has changed considerably over the past thirty years. For starters, the industry is far less misogynistic, investors are more sophisticated and price conscious, and advisors are more planning oriented and less sales-oriented. In addition, regulatory reforms have forced B-Ds to be more ethical and client-friendly in their business practices. As much as I am sympathetic to the wistful laments of the afore-mentioned industry vets, if we are honest with ourselves, it is difficult to argue that the evolutionary changes in our industry have not been generally positive or that the investing public is not better served today.
Today’s annual B-D conferences are a reflection of these changes as well. Gone, for the most part, are the exotic locales. To reduce travel expenses, today’s conferences tend to be held in close proximity to the B-D’s home office. Gone too are the 5-star Sheratons with the endless shrimp bars and the bottomless bottles of Dom and Veuve Clicquot. More commonly, today’s advisors are herded into the grand ballroom of a Hyatt or Marriott to dine on rosemary chicken or grilled flank steak. A glass or two of house red may still be complimentary, but if you require a toddy, you probably have to wander over to the cash bar. Want to bring your spouse or a guest? At many firms, this expense falls entirely to the FA or, at best, he or she is 1099ed for it.
As for substance, most annual B-D conferences include a mandatory compliance component with a pleasure factor rating that lies somewhere between tooth extraction and waterboarding. To help defray the cost of the event, B-Ds often enlist a host of product sponsors and force advisors to sit through a gauntlet of less-than-thrilling PowerPoint presentations on the archane tax benefits of oil and gas partnerships and the fascinating world of non-traded REITs. Variable annuity carriers are also a staple on the conference circuit, with provider after provider competing for the title of sexiest living benefit rider.
As the CEO of a mid-size independent B-D, I have witnessed and experienced these issues first hand too. Far from being an eagerly anticipated event, the B-D conference of the modern era is generally viewed by FAs with, at best, tepid enthusiasm and, at worst, a sense of dread. But I am convinced it doesn’t have to be this way. One change we have implemented is to incorporate a more diverse range of sponsors. For instance, in addition to the usual players, we mix in various technology vendors, estate planning attorneys, and practice management specialists, and we are constantly on the lookout for new, unique topics of interest.
Equally importantly, we are encouraging our sponsors to bring dynamic speakers and try to make their presentations as entertaining as they are informative. This year, for instance, one of our sponsors brought along an economist to present his views on the outlook for the markets and the economy. The presentation was replete with charts and graphs that, under normal circumstances, would have been enough to make one’s eyeballs bleed, but the gentleman was so dynamic and funny (think Louis Rukeyeser blended with Crocodile Dundee) that the advisors did not even realize they were sitting through a 300-level college econ seminar. Fill your conference presentation lineup with characters like him, and the event is sure to be a home run.
From the B-D’s perspective, the organization, planning and expense of the annual B-D conference is considerable (sponsors typically only cover a portion of the overall bill), and we still encounter the occasional FA who expects rock star treatment. FAs really do need to understand and accept that we live in a different world now and that the days of the boondoggle are, for better or worse, gone forever. The annual B-D conference today exists not as an entitlement benefit or a sales reward, but rather to meet a compliance requirement and to strengthen the bonds between the home office and the advisors in the field. The bottom line is that, with creative planning efforts from the B-D and with the right attitude from the FAs, it is still possible for the annual B-D conference to be a welcome, enjoyable, positive experience for everyone involved.
The boondoggle is dead, buried and gone – get used to it, and get accustomed to expecting more from your B-D’s conference, such as real, meaningful value-adds for your business.
Jodi Johnston is the CEO of Financial Advisers of America, a FINRA member B-D and RIA based in Carlsbad, CA with offices in California, Hawaii and Arizona, and partners across the United States.
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