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Thoughts on Attending My First fi360 Conference

May 01
00:15 2012

I popped out of the Lake Shore Limited about half-past nine in the morning. I enjoy taking trains about as much as I despise flying and once took a cross-country train to present an award-winning academic paper at a symposium in San Diego. Like that earlier trip, the opportunity to again travel along the route once traveled by the famous 20th Century Limited – the most famous train in the world whose regular patrons once included Theodore Roosevelt and Enrico Caruso – made the trip to Chicago all the more alluring. While the westbound schedule of the Lake Shore Limited remains close to its predecessor, the eastbound timetable departs the Windy City nearly eight hours later than did the New York Central’s marque passenger train. This had two important implications. First, the opposing trains, instead of meeting just west of Buffalo’s Central Terminal shortly after midnight, now meet shortly after 4:30 in the morning somewhere south of Beulah Beach, Ohio. Second, and more important, the modern schedule meant my wife could pick me up at 10:00am as opposed to 2:00am. Of course, had this really had been the 20th Century Limited, I would have also had to jump off since this elite train, once it left New York’s Grand Central Terminal, didn’t stop until it reached Chicago’s LaSalle Station.

Fortunately, we live in the 21st Century, not the 20th Century. And I had just arrived to speak at the 2012 fi360 Conference. Coincidentally enough, my topic was “The 21st Century Investment Policy Statement.” As I write this, I hear the gentle clickity-clack of the train rolling somewhere through Indiana heading towards my home in wonderful Western New York. What better time to share my thoughts on the preceding three days.

As I mentioned, I arrived in Chicago Wednesday morning and found my room ready. I was a day early for the conference, but there was a cocktail party that evening. In the meantime, I visited the much heralded model railroad exhibit at the Chicago Museum of Science and Industry. The anticipation far exceeded the actual event. On the other hand, I liked the U-505 exhibit so much I bought the book for my son. Next on my itinerary: The Adler Planetarium, the first built in the western hemisphere and the oldest gallery of astronomy still in existence. Unlike the Rose Center for Earth and Space (née “Hayden Planetarium”), the Adler is a relic true to its origins, a bittersweet testament to the promise that once was. They were kind enough to let me in for free, seeing it was so close to closing time. I walked through and smiled a little, cried a little and, at times, even sighed a little. It was a though I pass through a time portal, back to an era where The Greatest Generation was busy building what they hoped would be the foundation to a Greater Generation. I couldn’t stand it anymore and decided I’d be happier waiting in the Chicago drizzle for a cab that would never come.

With such priming, I returned to the hotel and registered at the conference. I went to portion for people whose last name begins with “C,” but Allie, who immediately recognized me, directed me to a special place where speakers were to register. I officially signed in and went upstairs to unload the trinkets I had purchased at the museum before headed for the cocktail party.

You should know this about me. When I go to parties, I’m the guy who stands alone against the wall (or near the vegetable tray) all night. Sure, I’ll say hello if someone initiates a greeting, but my natural inclination is not to butt in since everybody seems to be having such a great time talking to their friends. Call me shy, but I’ve done this all my life, which might rightfully make one question how I was able to win two elections for public office, but that’s another story. At the opening cocktail party for fi360’s conference, I took my usual position, standing sentinel in some obscure corner, making sure not to intrude by accidentally making eye contact with anyone and solemnly sipping my ginger ale.

And then a strange thing started happening. People I never met would pass, their face would brighten and they’d say, “Hi, Chris!” I double-checked my name tag and, sure enough, it had my name “Chris” in bold letters. But as more people said hello, I got brave enough to talk back. They weren’t noticing me because of my name tag. They noticed me because of my picture on LinkedIn or Twitter. Apparently my Google Analytics had not been lying to me. This would be the norm for the next three days, as people who I had never met in person would recognize me and, if I had interviewed them or otherwise communicated with them, I would recognize them. It was like a reunion of a virtual community. It was fun. Everyone was friendly. It was unlike any conference I had ever been to.

Still, I was an invited guest and I comported myself accordingly. The next morning I listened with interest as Blaine Aikin described the State of the Fiduciary Union.  He revealed the results of the annual fi360-AdvisorOne survey that I will report on once the embargo expires. Next, Justin Fox spun a thrilling tale only a MBA with a concentration in finance (like me) could fully appreciate. That some of the professors whose classes I sat through were mentioned only further prodded my interest. He might not have known this, but more than ten years ago I embarked on a similar research path. Readers of would look forward to comments from Fox in a future article.

After Fox, the conference split into breakout sessions, with four running concurrently. Naturally, I was only able to attend one for each time slot, which made choosing difficult since there were so many good presentations to pick. The first session I attended was titled: “The Evolution of fi360’s Prudent Practices.” A panel headed by Blaine Aikin not only shared some insightful information on the topic, but they also opined on various possible scenarios coming out of Washington.

After lunch I sat in on Dr. Ron Rhoades presentation on understanding the distinction between suitability and fiduciary and between the compliance and fiduciary cultures. Readers of these pages should be familiar with Dr. Rhoades, and his presentation, unlike the model railroad exhibit at the Chicago Museum of Science and Industry, exceeded expectations. Here are a couple of key takeaways from the session:

  • The Suitability Standard is a rules-based standard of conduct.
  • The Fiduciary Standard is a principles-based standard of conduct.
  • If disclosures worked, there would be no need for the fiduciary standard.
  • Dual registrants were two hats, but, if they are doing things correctly, they’ll find their fiduciary hat is glued on pretty tight.

After Dr. Rhoades presentation, I went to Knut Rostad’s “The Current State of a Broker Fiduciary Standard under Dodd-Frank.” At least that was the title in the program. On the PowerPoint slide that greeted me when I first walked into the room said the name of the session was “‘Before our Very Eyes’ – How Key Wall Street Lobbyists are Working to Make the Fiduciary Standard a Broker-Sales Standard.” True to this second title, Knut undressed SIFMA’s arguments revealing the underlying naked truth to their agenda. Knut skewered the broker lobby groups efforts to “fundamentally reject key precepts underlying the Advisers Act of 1940 as articulated by the [1963] Supreme Court in SEC v Capital Gains Research Bureau.” Knut is an excellent speaker with a vast knowledge of the inner workings of the politics behind the battle for the fiduciary standard.

I will tell you this. There were two great sessions on Multiple Employer Plans, each featuring a panel of experts. I spoke to members of each panel – Terry Powers, Mike Montgomery, Ary Rosenbaum, Ed Lynch and Lynne McAuley and they’ve agreed to be interviewed for a series I’m working on dealing with the MEP (soon-to-be) phenomenon. Stay tuned as I hope to have this wrapped up by July 1st, just in time for the effective date of the new Fee Disclosure Rule (hmm, is there some connection there?).

Which leads us to Fred Reish, who presented two sessions. He shared his thoughts on the newly adopted Fee Disclosure Rule and the possibilities of the DOL adopting a new definition of fiduciary. He agreed to answer some questions for an article we’re working on regarding the former and, well, we might just come back to him when it’s all said and done regarding the latter.

I can honestly say, that when the conference ended, I was sad. It was like saying goodbye to old friends. I wanted to stay and keep talking. Oh well, there’s always next year…

For more information on Blaine’s opening remarks and the keynote speakers, check out fi360’s “fi360 Blog: Fiduciary Links: Dispatches from the fi360 Conference.”

Oh, wait, are you wondering about my presentation, “How to Construct a 21st Century Investment Policy Statement”? I haven’t decided what to do about writing that one up, since I’ve already reported on much of what I talked about. Of course, there’s no way I can duplicate in writing what the attendees of the session received: free candy. What I can do is leave you with what I left them: A link to this article: “Have 401k Plan Sponsors Framed Employees?” Read it until the very end and you’ll find it has a special treat.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


  1. Knut Rostad
    Knut Rostad May 02, 11:58

    Thank you for attending my presentation, Chris, and congratulations on your new book. The main point of my presentation was that SIFMA is trying to replace fiduciary principles of loyalty and due care that put investors’ interests first with rules that put the firm’s interests first. For anyone interested, you can see the slides from the presentation here:

  2. Tom Engelhard
    Tom Engelhard May 02, 13:37

    It was, in fact, one of the best conferences I ever attended! It was amazing how well prepared and organized all the speaker were on their respective subjects.

    I hope that you were able to see the architectural phenomenon, “the Bean” in MilleniumPark while you were here.

    I really enjoy your writings and fiduciary perspective. Being an ardent MEP champion, I am also keenly interested in your upcoming articles.

    See you next year— one of the all time best railroad museums is in Union, IL- check it out online!


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