I learned at least two valuable lessons while attending the National Association of Personal Financial Advisors conference in Toronto. To wit:
1) Canadians have a good sense of humor. This was proven to me at a Toronto Blue Jays game when I saw a promotion advertised on SkyDome’s Jumbotron. As the “Psycho” theme played in the background, management announced that the first 15,000 fans at a coming Mother’s Day game would receive free Blue Jays shower curtains.
2) Many people don’t like Eliot Spitzer; some NAPFA-ites do like Eliot Spitzer. At the opening session of the conference, Spitzer appeared via prerecorded video to accept a special award for his efforts in protecting the investor. On face value, this seemed appropriate. After all, if NAPFA stands for anything, it’s for protecting the consumer from the nasties in the financial services world by charging fees, and only fees, to clients. Spitzer has racked up an impressive record of uncovering abuses among Wall Street wirehouses and in the mutual fund industry.
Yet the most common comment I heard from conference attendees was consternation over the Spitzer award, ranging from anger among those who thought the group had kowtowed to someone who cares more about his own political future than investors’ futures, to angst among those who thought Spitzer’s muckraking will result in even more draconian regulatory measures that will stifle innovation and place a profit-stealing albatross around the necks of honest advisors. The upshot, some warned, is that the mom-and-pop advisory business will go the way of the dinosaur. Such firms’ size and small margin of profitability error will lead to a rash of closures and mergers and acquisitions by larger firms. In the end, we’ll be back where the profession started: Large, multiline financial services colossi will roam the Earth, plundering as they go, with the poor(er) consumer having nowhere to turn.