Investments and Wealth Institute

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Investments and Wealth Institute

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Investments and Wealth Institute®Annual Conference Summary Notes*Las Vegas, NV, May 5-8 2019 prepared by:Truesquid® LLC – The Wealth and Wellness Training Company *These are notes and NOT official conference literature. Not intended for publication or profit. We did not attend all sessions and can’t guarantee that these are complete or completely accurate but they do represent our best efforts and intent.

Quotables “Estate planners are the caboose not the engine.” – David York “The Federal Reserve and the banking system are terrible dance partners.” - Dan Suzuki “If you were your competitor, how would you kill your company?” – Adam Grant “It is not good enough to be good, we have to be exceptional.” - Julie Littlechild “I’ll meet you for lunch after I pet some puppies in the Expo hall.” - Joselyn Hall "Zero minus zero is even easier math.“ – Michael Kitces "I've been to like 20 of these and yesterday was the best conference day I've ever had. Better than 20 years added together!“ – overheard “There’s no better way to spend quality time with our clients. IWI ACE provides a perfect forum for that.” - Lynn James

The Economy 2019: Politics Collides with RealityMarci Rossell, Journalist & Economist Key Insights There are two types of disruption – Good – organic and permanent – (Airbnb, Uber / Lyft…) Bad – policy-driven and temporary – fosters “Wait and See” approach Wait and See approach – reluctance to make decisions or investments due to higher than usual uncertainties. Also contributes to higher than historical average savings rate. A recent example is Y2K. Three major global disruptors are contributing to the Wait and See approach: Brexit – voters believed they could have all the benefits of leaving the EU without the costs.China / US trade – what does winning mean? Interesting facts – the Per capita GDP in China is less than Mexico and the US makes the best financial assets in the world (US treasury bonds and real estate).US Monetary Policy – FED not sure how quantitative tightening will work. How to get back to neutral monetary policy?The president does not run the US, the voters do. Voters are not against capitalism, they are against corporatism (control by corporations). Sense that socialism is good when it benefits me, and bad when it benefits others.Insights we will share in depth with someone else Expansions never die, they are murdered by policy decisions. Action: Share these insights with at least 3 advisors.Date started Progress (1 low – 5 high)

The Hacker’s BlacklistJohn Sileo, Sileo Group, Inc., Founder Key Insights Identity theft can happen to anyone and can have a huge impact! All tech has two sides – good / bad Top threats: Social engineering – the art and science of human engineering. Criminals hack the humans first. Businesses fund the human technology last. Phishing / spear fishing / whaling – criminals pretending to be someone they’re not to lure user into revealing private data. – Make sure to hover over website address link in “official looking” emails to make sure it is going to correct site. Don’t CLICK!Ransom ware – make sure to have 3-2-1 backup. Three copies, 2 media types and 1 off-line / off-site storage. Test before needed!Cloud computing – clients face same risks we do. A client appreciation event on cloud security could be a value-add.Cyber security roadmap – hire external expert to conduct test, solve vulnerabilities, encrypt, off-site backup, secure cloud, protect mobile, security training for all staffInsights we will share in depth with someone elseOur resiliency moves us forward. Action: Make sure my files are encrypted.Date startedProgress (1 low – 5 high)

Performance Excellence: The Principles of Communication Regarding Philanthropic Planning and CommunitySusan Kay, Vice President and Director of Business Development, MFS Fund Distributors, Inc. Key Insights 89% of clients say that given the same price, quality and value would switch to the brand able to paint themselves as responsible for others in the community and world. You have to know your clients’ causes and charities. What drives them from their heart? Ask them at the end of a quarterly review. Reflect back that you know what’s important to them – details of their lives. This is immeasurable to advisors.The difference between success and significance. Success is about the money you’ve made for the family - it’s transactional. Significance is what you have done for the family – that’s transformational which makes you referable and how you grow your practice. It’s why clients love you. Helping others raise their game is the key to life.Insights we will share in depth with someone elseShare the site Action:Check out the site to review “990 Finder”Date started Progress (1 low – 5 high)

Why Fundamentals Still Matter in the Age of Big Data, AI and TwitterDan Suzuki, Richard Bernstein Advisors LLC, Portfolio Strategist Key Insights Business fundamentals are important when an investor has a long time horizon (10 years +)Short time horizons benefit from the news cycle and are not as reliant on business fundamentals. Business fundamentals = Profits, Liquidity and Sentiment (but mostly, Profit, Profit, Profit!) Understand the profit growth cycle – imagine a clock face with profit starting at 6:00 and increasing until 12:00. Liquidity is influenced in two contradictory ways by Fed and banking system Insights we will share in depth with someone elseMain risk to global economy is a China slowdown. Action:Review the source data instead of relying on summary from media / other.Date started Progress (1 low – 5 high)

Shift Your Human Capital PerspectiveRay Sclafani, Founder, Clientwise Key Insights Human capital is viewed as a liability. Takes time and money. Invest in employees to create culture for engagement. ABR – Always Be Recruiting. Know what talent you are looking for and be clear. Culture eats strategy for breakfast. Lack of a shared vision is the #1 reason teams break up and fail. Best in the business think ahead and add to the team before they need it.Insights we will share in depth with someone elseMust have professional development in place for every employee. Action:Read, “From Good To Great” by, Jim CollinsDate started Progress (1 low – 5 high)

Advanced Roth Conversion StrategiesMichael Kitces, MSFS, MTAX, CFP®, CLU, ChFC , RHU, REBC, CASLPinnacle Advisory Group, Partner and Director of ResearchKey Insights Generally, decisions to invest in Roth IRA vs. Traditional IRA driven by when to take the tax. For investors projecting a lower tax bracket in the future Traditional IRAs were the favorite. For investors projecting higher tax rates in the future, Roth was preferred. When tax rates change everything changes. Consider Roth conversions in low income years. Understand the penalties and waiting periods before converting or withdrawing.Consider making a small Roth IRA account for every client and be aware of account minimum and fees.Insights we will share in depth with someone elseTax equivalency principle. Action: Get more info on Roth and Traditional IRA best practices – go to 19 Date startedProgress (1 low – 5 high)

Family and Philanthropy AdvisoryBill Sutton, JD, Senior Strategist Family and Philanthropy Advisory, UBS Key Insights Only 9% of families are able to grow assets from the first generation to the third generation. Of every 1,000 transitions, 700 fail. 85% attribute this to inadequately prepared heirs or trust and communication break down.3 traits of success stories: 1) have a plan and follow through 2) have a family story and share 3) actively give back and know the WHY behind giving. Intentional communication matters. What keeps a family up at night? How do you envision your family 10, 20, 30 years from now? What are your goals? Values? 60% of families want Philanthropy to be brought up in first 3 meetings. Insights we will share in depth with someone else Schedule a formal family meeting with an agenda at least 1x per year. Action: Create a family story.Date started Progress (1 low – 5 high)

Private Equity: Why and HowBob Rice, Tangent Capital and Rice Partners,Founder and Managing Partner Key Insights Diversification provides a way to average into private equity (diversify in vintages – first year of capital call)Goal is to shorten the “J” curve – the amount of time it takes to ramp up returns. Be careful of jargon confusion: RIC – Regulated Investment Company (tax) RIC – Registered Investment Company (SEC)Private equity funds: Primary – original capital call, long “J” curveSecondary – a resold primary. Shorter “J” curveInterval funds – similar to public equity instrument. No capital calls. Lower minimums. 5% quarterly returns. 1099 if tax RICAuction funds – eliminates cash drag problem. Hope to be available on Nasdaq in the future.Insights we will share in depth with someone elseConsider participating in private equity. Action: Go to for slides. Date startedProgress (1 low – 5 high)

Trends in Financial Services Key Insights Demographics – the new RMA capstone is available to help advisors understand and take advantage of changing demographics.Margin Compression – competition and commoditization impact financial services industry.Client Expectations – 89% of high net worth clients are loyal. 91% are satisfied. How do you stand out? Insights we will share in depth with someone else Investments and Wealth Institute’s Exceptional Advisor framework Action: Attend Julie Littlechild’s breakout where the details of IWI’s high net worth client surveys are shared.Date startedProgress (1 low – 5 high) 5/6/195

Creating High Performing TeamsCam Marston, Generational Insights, President Key Insights Gen X female is the apex consumer. Don’t be distracted by her spouse. She is the decision maker.People on the cusp between generations can be a translator to help reach both generations. Best to deploy in retention strategies. Gen X leaders have higher turnover when leading Millennials or Boomers. Demographics + Societal Factors + Reaction to events + Parenting style = generational characteristics. Affluent societies have:Delayed adulthood Extended lifetimesPopulation bulgesIndividual supersedes communityInsights we will share in depth with someone elsePre-renaissance art (Us, team, future, hope) vs. renaissance art (me, mine, now) Action: Subscribe to Cam Marston’s podcast – “what’s working”. Date startedProgress (1 low – 5 high)

Creating High Performing Teams – Q&A BreakoutCam Marston Key Insights Understand workplace preferences – Boomers meetings, Millennials text, Gen x email…Millennial female on pace to become more of an apex consumer than Gen X female.Clients in financial services do prefer to work with advisors 10 years older than themselves. Five categories of people have less generational bias (adopt less characteristics of their generation): Oldest children – generally behave like parents. Pleasers. Immigrants into the US from non-western societies. Military backgroundFarmer’s kidsRigorous shared rights of passage (draft, Mormon mission…)Sees trend in financial services to financial therapy and workplace wellness benefits including financial planning.Insights we will share in depth with someone elseKeys to success for managing / advising each generation. Boomers – “what’s worked in the past” Millennials – “in the future” emotion. Fun.Gen X – wife needs to be in the meeting to close the deal Action: Share these insights with my females in finance. Add section to CRMfor generation. Date startedProgress (1 low – 5 high)

Client Primacy: Inspiring Intentional OutcomesDavid Richman, JD Key InsightsKill the four letter word SELL. If you thought your dentist was selling to you – you’d find another dentist.3 Dimensions of trust:Visceral – Do I like you? Dimension – How do I know you know what you are doing? Experiential – What does it feel like to be your client? Deliver intentional advice and inspire. You like people that don’t sell to you.Advisors lack PROCESS integrity. Do you have a process? Do you have a pricing and discount process? Capture referral moments. Do not ask for referrals.Insights we will share in depth with someone elseListen to client’s storiesAction: Remember the power of the pause. Be silent.Date startedProgress (1 low – 5 high)

Building and Maintaining a Competitive Edge: Next-Level TrainingMark Spina, CIMA®, Russell Investments, Head of Advisor & Intermediary SolutionsJulie Zhang, Russell Investment , Director North America Sales Enablement Oscar Collingwood-Smith, MindTickle, Lead Market Manager for Financial ServicesJoel Brookman, Fortune 100 Financial Firm, Executive Director Key Insights LMS – learning management system. Learning can’t just be a one-time event. Need frequent bite-size learning. Keys to success as a wholesaler:Know your product Not a brain-dump / simple, story-tellingBreak it down to 5 minute chunksKnow what they really care aboutMain thing advisors need to work on:Value you bringWhat’s special about you?What is your brand?Simplify – why should advisor see you again?Understand the value of your advisor’s time – could be thousands of dollars an hourInsights we will share in depth with someone else – personal touch, do not have admin call to schedule. Action: Share insights with at least 3 advisors. Date startedProgress (1 low – 5 high)

Casting a Vision for Wealth and Its PurposeDavid York, CPA, Esq., Co-Founder and Managing Partner, York Howell & Guymon Key Insights – Learn who your clients are. How do they live and survive in the world?When salaries reach above 95k happiness goes down. The amount of work and stress to earn it contributes to lack of happiness. Inherited wealth is a hardship to happiness. Undirected and unintended wealth will be transferred to unprepared heirs. Only 20% of HNW families think heirs can handle inheritance. Only 15% HNW parent’s financial advisors give heirs financial education. 85% of heirs will change financial advisors. Help clients prepare their children for wealth. Most trusts are identical and static. Family cultures aren’t in line with estate planning. Structure and planning can’t overcome culture. Estate planners are the caboose not the engine. Insights we will share in depth with someone elsePeople who are generous are happier. Encourage volunteering. Giving stimulates the brain – it’s called the “helpers high” Action: Share Wealth & Wellness 2.0 Advisor as a Coach Advisors will learn how to ask high value questionsDate startedProgress (1 low – 5 high)

Big Ideas 2019Catherine D. Wood, ARK Investment Management , Founder and CEO Key Insights – 5 Platforms Ready for Prime Time:Block chain – now 2x PayPalGenome sequencingRobotics Energy storage Artificial intelligence Big ideas 2019:Deep learning – software 2.0 takes human programmer out of artificial intelligenceDigi tal wallets – Square and Venmo have significantly lower customer acquisition costs than traditional backs.Battery – expect electric vehicles to increaseAutonomous vehicles – expect increase in cost per mile to travel by personal vehicleGenome sequencing – expect exponential growthRobots – robots working with people (collaborative) are expanding3D printing – aerospace and medicalInsights we will share in depth with someone elseWright’s law – for every cumulative doubling units produced, costs decrease e Action: Buy Tesla stock? Date startedProgress (1 low – 5 high)

Money, Happiness, and the Future of Wealth ManagementBrian Portnoy, PhD, CFA, Head of Education, Magnetar Capital Key Insights What matters most – the 4C’s: Connection – the most important. Tribal. Need to belong. Wired genetically. Control – tell your own story ( Shawshenk Redemption)Competence – work. Who are you? What’s your identity?Context – passion, hobbies, sports How do we spend wisely? Spend on experiences, others and time.Rich – the accumulation of more / Wealthy – funded contentment.The brain is wired to feel loss more than happiness.Buying time to afford flexibility is an unbelievable value.Insights we will share in depth with someone elseHedging sadness can increase happiness. Action: Read Man’s Search for Meaning by Viktor Frankl Date started Progress (1 low – 5 high)

Fixed Income and ETF LandscapeRichard F. Powers, VanguardWilliam J. Hickey, Anchor Capital Advisors LLC David Miyazaki, CFA®, ConfluenceScott Welch, CIMA®, Dynasty Financial PartnersThree most important things: friction, friction and friction… Within fixed income as an asset class, ETFs can be a better option than individual bonds or mutual funds when considering: Price / cost odd lots / full lotsIf there is a need to move allocations during a market cycle, fixed income ETFs can provide more seamless / lower cost adjustments. Transparency – now what’s in your portfolioLiquidity / transferability – ability to get in and out of the ETF at potentially lower costDiversification – ETFs have a basket of bondsThere are different ways to utilize fixed income ETFs as a part of a balanced strategy.Liquidity and low friction costs = ability to rebalance and trade to reflect change in strategy.  Action: Consider fixed income ETFs as a part of a balanced strategyDate started Progress (1 low – 5 high)

Why Exceptional Advisors Don’t Worry About Client SatisfactionJulie Littlechild,, Founder Key Insights It is not good enough to be good, we need to be exceptional.Do your clients know you’re here at IWI? Do your clients know what your credentials mean? Be proactive in sharing your continued development and what it means to clients. Be exceptional - communicate, demonstrate, and measure. Insights we will share in depth with someone else The more knowledgeable the clients felt, the more likely they are to refer. What can I do to create community among clients? Action: Survey clients in advance to co-create the agenda . Date started Progress (1 low – 5 high)

Priceless – The Language of ValueGary DeMoss, Director, Invesco Key Insights Clients are asking, “are my service providers worth it?” Create your “worth it” story - it’s priceless.Words matter – it’s not what we say it’s what clients are hearing.We need to educate clients on financial language. Price matters less when you are worth it. Insights we will share in depth with someone else Create a 30 second “smart statement” acknowledging your respect for costs, stating your value, and straightforward description on costs. Action: Use the word “approach” instead of “mission” in our marketing materials Date started Progress (1 low – 5 high)

Attracting the C-Suite: Executive Compensation StrategiesJohn Nersesian, CIMA®, CPWA®, CIS, CFP®, PIMCO, Head of Advisor Education Key Insights Client discovery questions – how much of your company stock would you intentionally purchase without options or awards?Most clients cash in awards on 2 dates: As soon as they vest Just be fore they retire11% of options are allowed to expireHow and when to exercise options? Early in the yearSee tax guide cheat sheetHave a framework to help clients act without emotional biasStock swapping83(b) electionInsights we will share in depth with someone elseResources:Mystockoptions.comKnow Your Options – by Kay Thomas Action: Consider enrolling in the CPWA certification program. Date started Progress (1 low – 5 high)

Attracting the Next Generation of ClientsAlexandra Cole, Purpose Generation, Co-founder Key Insights Treat clients like you do your portfolio. Make sure to invest in emerging markets.Millennials are entering peak earning years, but only 30% of financial advisors are actively looking for clients under 40. 60% of HNW parents worry their children are unprepared for inheritance. Millennials are Values-driven, Networked, Integrated, Digital-first, On-demand. Millennials make up 23% of the world’s millionaires.62% of millennials save 5% or more of their income, almost double the rate of other older generations at that age. Insights we will share in depth with someone elseWhen will Google and Amazon offer financial advice?Yelp for financial advisorsRobinhood snacks Action: Share these insights with my females in finance. Add section to CRM for generation. Date started Progress (1 low – 5 high)

Originals: How Nonconformists Move the WorldAdam Grant, Ph.D., The Wharton School, Saul P. Steinberg Professor of Management Key Insights Put your worst foot forward – say three things wrong with your idea.Availability bias – the easier something is to think, the truer it feels. Deep experience is just as important as broad experience. How to foster originals: Make unfamiliar familiarCreate psychological safetyBe a giver not a taker Harness the strength of your weak tiesInsights we will share in depth with someone elseIf you were a competitor how would you kill your company?Action: Read book “Originals” by Adam Grant Date startedProgress (1 low – 5 high) 5/11/195

Is Active Trust-Building Ethical? Herman Brodie, Prospecta Ltd., Founding Director Key Insights Building blocks of trust Using social cues to build trust is ethical when they are honest, unethical when not. For example, ordering the same food as your client is ethical when it is the food you wanted, not when you are trying to manipulate your client. Insights we will share in depth with someone else Clients will look for information to evaluate intentions and skills. Action:2 action items to do right away: Be vulnerable and trust your clients to keep your confidenceBenevolent intentions. Date started Progress (1 low – 5 high) Vulnerability Social Cues Physical Cues CaringTrustworthiness Integrity (honesty and consistency) Shared values & perspectives New Mature Established

1.866.TRUESQD (866.878.3773) Lynn James National Board Certified Health and Wellness Coach (NBC-HWC) Truesquid Co-Founder Joselyn Hall International MBA AIF®Truesquid Co-Founder Our mission is to create and deliver a culture of wellbeing and client focus that serves as a differentiator for wealth professionals.Individual Coaching Continuing Education WorkshopsWealth and Wellness Workshop Facilitator Certification Program

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