The past couple of days I’ve been at Newport’s Celtic Manor Resort attending the IFP’s annual conference for 2008, titled “Excellence As Standard”.
With one or two exceptions, the programme and venue has been excellent, and it’s been a great opportunity to catch up with some old friends, make some new ones, and even meet up with some Fincision readers!
On a personal level, the conference got off to a bad start. I got caught in traffic getting into Newport (how are they going to cope with the Ryder Cup in 2010?), and then found that my plan to live blog the event had failed at the first hurdle: no wi-fi in the conference areas! Is it just me, or should you expect to have wi-fi access throughout a conference venue these days?
Having checked in and dropped my bags in the room, I slipped into the main conference hall to catch the end of Jane Wheeler’s official welcome speech. Jane’s pride and commitment to the role of President was obvious, and her speech was warmly received.
An eagerly-anticipated first keynote speech from Michael Gerber followed, but what a huge disappointment; it was as much as I could do to stay awake, and at least one audience member failed on that score…
Michael Gerber: Awakening the entrepeneur within
My lasting impression of Mr Gerber is of a man who has had one good idea in the last 40 years and has obviously made a good living out of promoting it and himself, but what an incredible bore! It took him most of the hour to actually get around to telling us what this one great idea actually was, and then, when it finally emerged, you just felt it hadn’t been worth the considerable effort of listening. Along the way, he managed to repeat, repeat, REPEAT, almost everything he said at least twice, and contradict himself consistently: McDonalds, Dell and Starbucks were “stoopid companies”, then they were “brilliant businesses”. Whatever IFP paid this guy just wasn’t worth it to learn that you need a script, process is everything, and “you can’t get to the impossible from the possible; start with a blank sheet”. Toward the end of his slot, Gerber asked the attendees “how many of you want to create the finest financial planning company in the world?” Approximately 15 hands went up; hilarious! I don’t think this was due to any lack of ambition on the part of IFP members, it’s just that most of them had switched off by that point! Michael Gerber: 1/10 (sympathy vote due to his temporary paralysis)
Professor Doctor Thorsten Hens: Behavioural finance & strategic asset allocation
Thankfully, Professor Hens proved to be far more humorous and stimulating than expected; his session looked as if it could be heavy going from the programme description, but it turned out to be the best (IMHO) of the 3 breakout sessions I attended. Dr Hens provided an academic insight into behavioural biases, inefficient markets, the 3 most significant statistical biases and how they relate to strategic asset allocation, plus he ran a classroom experiment which demonstrated how statistically important 2/3 of the average is! His explanation of how people chose their personal number (any number between 1 and 100; player closest to 2/3 of the average wins) for this experiment was both clever and funny (some put 100 which is statistically impossible to win with: “shit happens”). The winning number was 23, if you’re wondering, and is always within the range 17-25. I particularly like his assertion that forecasting and control within finanial planning is just “an illusion”, and his statistically proven assertion that the least patient people in the world are the Americans! Prof Dr Thorsten Hans: 8/10
Shawn Brayman: Challenges with financial planning
My next session featured whirlwind presenter Shawn Brayman, CEO of Canadian planning software firm PlanPlus. Shawn ’s presentation was fast & furious, packed with stats from all over the place, and reminded me of Ned Cazalet in his style of delivery. Shawn opened up by asking the audience how many charged fees, and got an overwhelming response (of the 200 people in the room, I’d estimate 80% put their hands up). He then illustated how fees are negatively correlated with market performance, which I suspect was a bit of an eye-opener for some! Anoher question: how many use mean variance/ optimisation tools? This time the response was the complete opposite; I think 3 hands went up! Shawn demonstrated that efficient frontiers are much less accurate than thy ought to be if there is a short series of data, low volatility or large numbers of asset classes. Indeed, he showed that, with volatitlity at 20%, to properly support an efficient frontier based on just 4 asset classes, you would need 50 years data. The biggest reaction fom the room came when Shawn put up a chart based on a Fundamental Index method which showed very clearly how a financial bubble had grown over the last 10 years almost without anyone noticing. Given the events of the last couple of weeks, it was a timely and sobering slide! I’ve made a note to look up Shawn’s award-winning research paper debunking stochastic modelling. Shawn Brayman: 7/10
Dr Graeme Coddrington: Mind the gap
To close my first day of presentations at the conference, I returned to the main hall to be entertained by Dr Graeme Coddrington, whose multimedia presentation on “understanding why you don’t understand other people” was extremely entertaining, and easily the best session of the day. He risked the wrath of the geordies by mentioning that he’d “never met anyone normal from Newcastle”, but everyone else in the room knew what he meant! I was fascinated by his disclosure that our value systems are developed in the first 10 years of life, and are shaped by global events in that period. He followed with some great observations about the Silent Generation, Boomers, Gen X and the Millenial Generation (the young people of today for whom “Nelson Mandela has always been free, and Michael Jackson has always been white”), plus The Cuspers, people who are hybrids of two generations (I think I’m a Boomer/Gen X Cusper!). Graeme’s style is almost that of an observational humourist, but it’s also very polished & effective. He left with two powerful warnings for this particular audience: “retirement will die with the boomers” and “if you don’t have products & services aimed at the boomers, you’re nuts!” Dr Graeme Coddrington: 9/10
After that, it was off to the bar with Ben Crockford of Winterthur, and then time for a shower and a change into the penguin suit for the Champagne Reception and Gala Dinner.
The following morning, I managed to fall out of bed in time for the first breakout session of the day…
Geoff Davey: Lessons from 10 years of risk profiling
Geoff is probably the foremost expert on risk profiling in the world today, so I was pleased to get a seat at this well-attended session. As well as covering the various definitions of risk associated with profiling, Geoff highlighted 5 common mistakes planners make and the consequences of getting it wrong. His warning that documented evidence “mustn’t look stupid in court” caused a stir! Moving on to his latest research findings, Geoff asserted that risk tolerance doesn’t increase with financial education; doesn’t change with financial climate, and slightly varies by country. Geoff Davey: 7/10
Michelle Mone: How to be the best you can
it was disappointing to see a few people leave before this final session, and boy, won’t they regret it when they find out what they missed: Michelle Mone was superb! Prince’s Trust Board Member, panelist on The Apprentice and founder of Ultimo Bras, the diminutive 36 year old Scot is a natural presenter with a unique and endearing style. She immediately won over her audience by announcing that she would donate her appearance fee to the Breast Cancer charity, and then proceeded to take us on a hilarious recap of her life to date. From managing a gang of teenage delivery boys & girls at the age of 11 until she was “headhunted by the local sweetie shop”, through a brief spell as a catwalk model to blowing £420k over 3 years in a quest to design the perfect bra, Michelle’s story was engrossing. There were candid moments, including stories of her being sick on Mikhael Gorbahev’s shoe, stumbling over a couple having sex in a disabled loo, being invited onto Richard Branson’s yacht (“he like’s feeling people’s arses”), watching Mariah Carey strip in a New York hotel room (“she’s got butterfly tattoos on her nipples”), being 15 minutes away from losing her business (until she got on the phone and pleaded with HSBCs Global CEO for a £15m overdraft and got it), and my personal favourite, getting hammered at a high fliers dinner and drunkenly telling Bill Clinton that “I’m so jealous of Monica!” Priceless. Her advice on how to be the best you can? ” Work hard, play hard, give something back” and ”its never too late to start a business”. I’m not too sure about giving my kids KPIs though! Michelle deserved her standing ovation, and I just hope that someone does actually get around to making the film of her life; it’d be a dead-cert box office smash! Michelle Mone: 11/10
Finally, Nick Cann closed the conference by declaring it to have been “an outstanding event” which will return to the Celtic Manor resort next year. He’s right, it was an excellent event, and I’m looking forward to the 2009 version already…
Related posts:
