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Attendance at Pershing’s Insite 2006 meeting in Hollywood, Fla., rose 40 percent over the 2005 event, says Ron Fiske, managing director of the clearing firm. This means some 700 financial advisors (mainly RIAs) attended, out of a total of 1,000 guests.

Many came to get acquainted with the conference speakers — including the former Prime Minister of Spain Jose Maria Aznar and former U.S. Senator Robert Dole. Others wanted continuing education credits as well as time to speak with Pershing staff and to learn about the clearing firm’s latest products and services.

“Some say the 2005 event was a peak,” Pershing Director Mitchell Bell told a large crowd on June 7, “but we do not agree. We need to continue to raise the bar, as we have with speaker Jose Maria Aznar.”

Global Vision

Aznar focused his talk on global economics and terrorism. He addressed the audience just hours before the U.S. announced that Islamic terrorist Abu Musab al-Zarqawi had been killed.

The former leader of Spain (1996-2004), Aznar led the country through a period of economic and job growth, lowering income and business taxes and getting rid of savings disincentives. “He accomplished what many thought was impossible,” Bell noted.

Aznar described the world’s current economic equilibrium as “doing well,” though he says more structural change is needed. “No one has a crystal ball, and we all know that economic cycles still exist. But the current prosperity should continue,” Aznar said.

To ensure this prosperity and boost job growth in Europe, he has proposed an “Atlantic area of prosperity” to “dismantle the regulations that hold back the full integration of the United States and Europe.”

“It’s not a traditional free trade area,” Aznar explained, “but ‘world trade plus.’ “

Aznar interacted very candidly with the crowd when questions were asked about security and Latin American politics. When asked if the election of Alan Garcia in Peru was a good thing, he explained that Garcia — who defeated populist Ollanta Humala — was not a solution to the populist leadership now dominant in Venezuela, Bolivia and some other parts of Latin America. “The first presidency of Garcia was a catastrophe,” Aznar said.

His answer: “The United States must act,” he stressed, to diminish the economic gaps between the northern and southern parts of the Americas.

In terms of terrorism worldwide, Aznar said that “Europe is incapable of defining the real threat as Islamic terrorism, not international terrorism.” “Imagine if the U.S. had not reacted to September 11,” he continued, explaining that instability in Afghanistan, Iraq and other parts of the Middle East would be even worse.

As for the situation in Iraq, Aznar stands behind the U.S. “Iraq is the center-front now for terrorists. It is vital that the U.S. keep its presence there,” he said.

“What is the alternative?” Aznar asked. “To not promote freedom? To believe that we are better with dictators and with oppression?”

As for the role of the United States, the former Spanish leader noted that, “The United States is still the world’s government.” And he urged members of the audience to ask the ’08 U.S. presidential candidates what they would do about the situations in Iraq, Iran and Venezuela — and about immigration.

Market Analysis

Wharton finance professor Jeremy Siegel spoke to the Pershing crowd on June 8. He described historic real stock returns as being 6.8 percent vs. 3.5 percent for bonds. And going forward, bond returns should just be 2 percent or slightly higher, he says, while stocks should have returns of 6 percent to 7 percent.

In his research on the S&P 500′s original components, Siegel and his students concluded that the top performer was Philip Morris. An investment of $1,000 in the S&P in 1957, with reinvested dividends, would have been worth $145,000 in 2005 — while a $1,000 of Philip Morris shares would have been valued at $7 million. Another important point: “Taxes don’t matter [over time]; dividend yield does,” he shared.

As for the current market turmoil, Siegel expects it to last a few more weeks. The adjustments are “needed” in his view.

In general, international investments should account for about 40 percent of a portfolio, suggests the author of The Future for Investors: Why the Tried and the True Triumph over the Bold and New. And he says it’s not the best time to buy emerging-market investments. “Wait a bit more and buy when the bubble is done,” Siegel explained, “and in the long term, they should be good.”

Siegel also gave an in-depth look at where the world’s economy and stock markets are heading: “Our way of classifying global stocks by where they are headquartered is obsolete. We should look at where companies produce and sell,” he said.

The greatest global change Siegel expects over the next 45 years will be in global output and asset ownership. As boomers sell shares, we have to be prepared to let investors worldwide purchase them, he argues. “The developing countries will produce more goods and buy more assets and eventually will own most of the world’s capital.”

“If we don’t let others own the shares, our own share prices will collapse,” Siegel said.

Marketing Muscle

Harry Beckwith, author of “Selling the Invisible” and other best-sellers, gave a group of conference guests a course in branding and business communications.

His first piece of advice was that financial professionals appreciate the “Chivas Regal effect” — the idea that consumers associate high-priced products with high quality. This is equally true of advisors and the fees and services they offer, Beckwith explains.

As for branding, avoid names and concepts with “more than four syllables.” And, more important, “Get the word out,” he said, with advertising, publishing, presentations and other techniques.

The style in which you “package” yourself and your services is very powerful, Beckwith shares. “People buy not just expertise, but also ‘apparent expertise,’ ” which is in the eye of the client. And this can be easily influenced by how you dress; if the clients expect a business suit (or a white lab coat for a doctor, for instance), be sure to wear one.

To boost the impact of your packaging, be consistent in the look and feel of your business cards, website and even your shoes, the marketing expert says.

It’s also vital to look people in the eye, so they feel important and comfortable with you. “It’s all in the relationship,” he shared. “Make things eye to eye, face to face, heart to heart.”

And don’t be afraid to “be a brilliant communicator,” Beckwith stressed. Use simple, short explanations and clarity — keeping in mind that as many as “74 percent of Americans don’t really know what a bond is.”

“Many investors and clients do not know what you are talking about, but they don’t want to admit it,” he continued. This lack of clarity, though, needs to be turned around by the advisor. “Look at the information you’re presenting, and cut it down by a half… simplify and get to the essence.” Also, tell stories to truly show the client that you care and that you are worth their trust.

Pershing’s Push

As Pershing COO Brian Shea puts it: “You continue to grow, and we do, too.” This mutual dependency, in other words, is good for advisors, their broker-dealers and the clearing firms that help them.

To drive further growth in its own business and for its clients, Pershing is working to share more unbiased research, portfolio-management tools, quarterly performance reports, real-time margin snapshots, unified management account products, mortgage services, directed-trust vehicles, commercial-lending services, ETF information, presentation software and more.

In terms of technology, Pershing — a unit of the Bank of New York — is now providing some broker-dealer customers with access to the Morningstar Advisor Workstation Enterprise Edition — which handles investment planning, client presentation, portfolio analysis and investment research tools — and works with Pershing’s NetExchange Pro online brokerage platform. This platform is used by more than 80,000 investment professionals and 1,100 financial organizations serving some 6 million investors. Pershing also recently launched Managed Account Direct, an open-architecture platform to support separately managed accounts.


On the Up and Up:

Pershing’s clients have experienced the following growth in assets under management:

04/06$808 bn

12/05$749 bn

12/04$706 bn

12/03$615 bn

Source: Pershing


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