If you want sound bites, Schwab Impact 2011 in San Francisco had them. Chuck Schwab called Fed Chairman Ben Bernanke’s take on the economy “BS” and implied President Obama lacked the necessary strength to turn the ailing economy.
PIMCO head Bill Gross stuck to his usual no-nonsense style, saying that “for 20 years we’ve been making paper rather than things, and in the process we created a number of liabilities. We’ve been like bad squirrels, not putting enough away.”
Former U.K. Prime Minister Tony Blair lectured attendees on our geopolitical and economic situation, calling it unproductive to focus on who caused the financial crisis and how to prevent a recurrence.
“These are not dominant issues,” Blair said. “The key is how to get the economy moving and create jobs. All else should be subordinated to that.”
But aside from the headlines, advisor attendees of the conference, held Nov. 1 through Nov. 4, went deeper (pun intended), with educational offerings that included sessions on ETFs, alternative investments, retirement income, practice management and more.
Exhibiting firms also took advantage of the media attention surrounding the conference to make announcements of their own. Altegris Advisors, the alternative private fund and mutual fund shop, chose the show to announce the launch of the Altegris Futures Evolution Strategy Fund (EVOAX). The fund is a ‘40 Act mutual fund that combines the investing expertise of Jeffrey Gundlach’s DoubleLine Capital in fixed income with a managed futures strategy led by London-based Winton Capital Management.
Not forgetting to include advisors in the program, Schwab executives presented “Impact Awards” to three advisor firms and their leaders on the third day of the conference. The company also donated $45,000 to charity on behalf of the recognized advisors.
“This year’s Impact Award winners raise the bar for excellence in client service and exemplary business practices for the independent RIA industry,” said Bernie Clark, executive vice president and head of Schwab Advisor Services, at the event. “We commend them for their dedication to investors, the industry and their communities, and we thank them for providing a learning opportunity for other advisors by sharing their best practices and achievements.”
Richard Stone, CEO of San Rafael, Calif.-based Private Ocean received the Leadership Award for his role in helping the International Association of Financial Planners draft a code of ethics for the industry. Walt Bettinger, CEO and president of Schwab, joined Clark to hand out the award. Stone’s firm has $700 million in assets under management.
Schwab presented its Best in Business Award to Budros, Ruhlin & Roe of Columbus, Ohio, for its excellence in business management. The firm, founded by Jim Budros and Peggy Ruhlin and dedicated to the concept of fee-only financial advisory work, manages more than $1.5 billion in assets.
Lastly, Schwab presented its Pacesetter Award to Green Square Capital of Memphis, Tenn., which manages more than $1 billion. The team grew 30% last year and has instituted a policy of “client delight.”
In the conference’s opening session, both Bill Gross and LizAnn Sonders, Charles Schwab’s chief investment strategist, spoke bluntly about the global markets and the economy, with Sonders a bit more optimistic than Gross.
Gross, who in his latest monthly commentary lamented the shortfalls of policymakers in both Europe and the United States as failing to encourage growth and said that more debt was not the way to get us out of our current debt mess, handled the first question from moderator Tyler Mathisen of CNBC.
Mathisen wondered whether, as an investor, he should be worried that “my money seems hostage to a Greek prime minister?”
“You should be very worried,” Gross responded, in reference to Greek Prime Minister George Papandreou’s suggestion that the latest eurozone bailout plan should be put to a referendum by Greek voters. “At this point,” Gross continued, “it’s a question of when rather than if Greece will default.”
When Mathisen followed up by asking if Greece will remain in the eurozone, Gross argued that “they would do better to drop out and then come back.”
Ever the blunt speaker, Gross then said that “Iceland is the only country that did it right; they basically told the banks to stuff it.” He suggested that if Greece doesn’t accept its bailout medicine, “it will be in trouble for the next 10–15 years.”
Talk to Chuck