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Regulation and Compliance > Federal Regulation > SEC

The IA 25 for 2014

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This is the 12th year that we have published the IA 25, our annual list of the most influential people in and around the advisor industry. All the editors of the Investment Advisor Group—of Investment Advisor and Research magazines and—weighed in over several months to choose individuals who in our judgment have been influential, are influential and likely in the future will influence the markets; how advisors invest and plan retirement for clients; and who will affect the regulatory and legislative environment in which advisors operate.

These are women and men whose decisions, intellectual capital, guidance and example—for good or ill—will affect how advisors run their businesses and invest their clients’ money.

As you might expect, some of the people on this year’s list are repeat honorees—Mark Tibergien has been on the list every year we’ve published it, while Dale Brown and Deena Katz have been honored eight times. However, there are 11 people (well, 12, counting Dave Drucker and Joel Bruckenstein, whose close partnership allows us to count them as one) who are on the list for the first time.

This is the fourth time that Bill Gross has been a member of the IA 25, and while money has been flowing out of PIMCO’s flagship Total Return Fund for some time, we know that advisors continue to be keenly interested not simply in the drama surrounding Mohamed El-Erian’s departure, but in Gross’ thoughts about the future behavior of the Fed and the direction of interest rates. How do we know that? The analytics that our editors access on an intraday basis confirm our readers’ keen interest in Gross. They also display the primary concern of advisors: regulation.

That has been the top worry of advisors and their partners for a number of years, as reflected in our annual Broker-Dealer Presidents’ Poll (look for those findings in the June issue), and in TD Ameritrade’s annual sentiment survey of its affiliated RIAs for five straight years, as honoree Skip Schweiss told me. That’s why we’ve included on this year’s list the SEC’s enforcement chief, Andrew Ceresney, Labor Secretary Thomas Perez, the Institute for the Fiduciary Standard’s Knut Rostad, consumer advocate Barbara Roper, securities attorney Tom Giachetti and the aforementioned Mr. Schweiss. Then there’s SEC Chairman Mary Jo White, who shared her insights into what the commission will be focused on in an exclusive interview with our Washington Bureau Chief Melanie Waddell. As in the markets, advisors and their partners hate uncertainty in the regulatory arena as well. Here’s hoping for more certainty.

Regulation is not the only issue that keeps advisors up at night, and where smart, passionate people in the industry have real influence on events and products and policies. Advisors are particularly interested in what their peers think and do, so several standout advisors are on the list this year.

In nearly every instance, an editorial staffer interviewed the honorees on our big list, which for convenience sake, we’ve split up into different categories. While we highlight certain honorees, we list them in alphabetical order by category. Brief vignettes of those interviews occur on the pages that follow, but throughout the month of May, we’ll be posting enhanced versions on

And now, we present for your consideration the 2014 IA 25. —James J. Green

Mary Jo White, Chairwoman, SECMary Jo White

After declaring that 2014 will be the year that the SEC decides whether to move ahead with a rule to put brokers under a fiduciary mandate, Mary Jo White directed SEC staff to compile a list of “all of the potential options” available to the agency that could be used in drafting a fiduciary rule.

Why? “If the decision were made to impose a uniform fiduciary duty, there are a number of ways to do that,” White told IA in an exclusive interview in mid-April.

White announced in a late March speech that “in order to more fully inform the commission’s decision on this matter,” she had directed SEC staff to compile a list of all those options, including, she said, “a uniform fiduciary standard for broker-dealers and investment advisors when dealing with retail customers, and other measures that may be more targeted and achievable in the shorter term.”

As it stands now, White told IA that she has gotten “some initial recommendations and analysis from the staff,” to which she has “raised some questions and given some reactions. I’m actively in discussions with the staff on those recommendations and analysis.”

The priority, she continued, “is to get those [staff] recommendations before the commission on what I consider to be a very high priority issue for investors.”

White decides what those recommendations should be, and then the five-member commission considers them.

In her mid-April talk with IA, White said that she’s “driving this [fiduciary] issue because of how important I think it certainly is.” However, she stressed, it’s a “complex” issue. “It’s hard.”

White declined to give a formal deadline on when the agency would decide whether to move forward on a fiduciary rulemaking, stating only that deciding whether to reform the advice regulations governing brokers and advisors “is a priority for 2014.”

When asked by IA if she believes that investors do not understand the difference between a broker and an advisor, White replied: “I think the data certainly shows that; that there is that investor confusion.”

Another “very important aspect” of deciding whether to use its authority under Section 913 of Dodd-Frank is for the commission to determine whether to harmonize the rules for brokers and advisors, which White said would be a separate rule to any fiduciary rulemaking.

Increasing the number of advisor exams is also a “No. 1” issue for White. “You really can’t overstate how pressing the need is to increase the exam coverage of investment advisors,” White said during the interview. “The metrics are pretty stark; we were able to examine 9% of advisors last year, that’s 25% of assets under management.”

Despite the SEC exam force being “a lot smarter” by using risk-based exam methods to single out which advisors to examine, White said “that’s just not sufficient coverage.” While declining to comment on whether a self-regulatory organization could help provide that coverage, White argued that the commission “should be funded” by Congress so that it can boost those exam numbers and said, “I’m pushing very hard for that.” —Melanie Waddell (Photo: Getty Images)

Click here to read the extended profile.

Andrew Ceresney, SECAndrew Ceresney

When asked what challenges come with being the sole director of the SEC’s most high-profile division, Andrew Ceresney cited keeping pace with the “increased complexity of the misconduct” the enforcement division sees as it relates to products, the markets and “schemes.”

“Over time, as matters have become more complex, we’ve been bringing on more industry experts and we’ve gotten smarter about using technology,” Ceresney told IA. The division is dealing with “very complicated schemes where people are engaging in conduct that’s hard to unravel, but we do it through hard work, smarts and the use of technology.”

Ceresney said the division is also “litigating more cases.” He added that the funding boost for the SEC under President Obama’s 2015 budget would help the division handle more complex cases. Financial reporting cases, for instance, “take a lot of time to investigate, and you often have significant amounts of data to review.”

The division’s five specialized units, which Ceresney said are “all functioning well,” include the Asset Management Unit, which focuses on advisor enforcement. “The vast majority of advisors mean to do the right thing and try to comply with the law,” he said.

Ceresney said the division has “hesitated” to create additional units because doing so “creates challenges in terms of managing the division because you’re creating a new set of supervisors.” Instead, the division has created task forces to focus on specific areas, like the financial reporting and auditing as well as the micro-cap and broker-dealer task forces. —Melanie Waddell

Click here to read the extended profile.

Thomas Perez, Secretary, Department of LaborThomas Perez

Secretary of Labor Thomas Perez is being credited with re-energizing the Department of Labor’s bid to ensure that a rule to amend the definition of fiduciary under the Employee Retirement Income Security Act gets reproposed soon.

After being sworn in last July, Perez “immediately started focusing” on DOL’s fiduciary rulemaking, said Knut Rostad, president of the Institute for the Fiduciary Standard. “He spoke to pro-fiduciary groups and started his rounds on the Hill to hear the concerns of lawmakers directly.”

Perez told a Senate Appropriations subcommittee in mid-April that the redrafting of the proposal that was withdrawn in 2010 “has been slowed down at my direction significantly because we wanted to take a step back [to] listen and learn from everyone.”

Said Perez: “The reason we’ve slowed the [redrafting] process down is that I want to hear from everybody; we’ve been engaged in a significant amount of outreach, and I’ve met with a number of senators and congressmen on both sides of the aisle and we’re going to continue to do that.”

In mid-March, Perez, a graduate of Harvard Law School who has served as the Assistant Attorney General for the Civil Rights Division of the United States Department of Justice, noted the “importance” of the DOL fiduciary plan, stating that a redraft would be arriving “in the coming months” and that DOL would continue its “due diligence” on the rulemaking.

Dennis Kelleher, president and CEO of Washington-based Better Markets, agreed that Perez going to Capitol Hill “was a smart thing to do,” as “a lot of the industry generated misinformation about what the DOL is doing.” —Melanie Waddell

Click here to read the extended profile.

Barbara Roper, Director of Investor Protection, Consumer Federation of AmericaBarbara Roper

One would think, said Barbara Roper, director of investor protection for the Consumer Federation of America, that “the near destruction of the global economy” would have ended the regulation/no regulation debate. However, when it comes to our country’s financial system, nothing has changed, and despite a series of successive disasters—the bursting of the tech-stock bubble, the accounting and analyst scandals, the mutual fund scandals and finally, the devastating financial crisis—it’s pretty much business as usual on Wall Street.

Many investors, though, are still wary about getting back into the market. Cultivating their trust is of the greatest importance since “the markets depend on investors to provide capital at a reasonable cost,” Roper said.

Although financial advisors are doing a stellar job of regaining and cultivating clients’ trust for the long term, their efforts are more or less futile in the absence of system-wide financial sector reform and regulation, Roper said, particularly regulation that defines the advisor-client relationship as “a relationship based on trust.”

“The broad consensus is to apply a single fiduciary standard to all brokers and advisors alike, but [the regulators] still hesitate to act and bring this one to the table. Now, even a sophisticated investor does not know whether their financial planning professional is an advisor or a broker, and they won’t know until the regulation is changed,” she said.

Roper serves on the SEC’s Investor Advisory Committee. She is the 1991 recipient of NAPFA’s Distinguished Service Award and a 2004 recipient of Consumer Action’s Consumer Excellence Award. —Savita Iyer-Ahrestani

Click here to read the extended profile.

Knut Rostad, President/Founder, The Fiduciary InstituteKnut Rostad

If you want to know about the fiduciary standard, Knut Rostad’s your guy. Off the top of his head he’ll rattle off details on the Advisers Act, on past SEC rulings, on the Committee for the Fiduciary Standard or the Institute for the Fiduciary Standard, both of which are advocates for the fiduciary standard and both of which he founded. He’ll give you informed insight into what the prospects are inside the Beltway for new fiduciary rules from the Department of Labor or the SEC.

Rostad is also realistic. Over the last six months he said there has appeared “greater clarity” in how the SEC might rule on a fiduciary standard, and “it’s not an optimistic picture.” A rule from the SEC as it stands now would “look like the commercial sales/suitability standard with some extra disclosure requirements. Every broker would proudly proclaim their fiduciary” bona fides, he said, while “brokers wouldn’t have to do much different than they do now. Investors would be far worse off.”

The DOL, he said, “is a different situation.” Rostad said that research from the GAO draws a picture showing that not only are “many, many investors […] not being treated with a fiduciary standard, it’s worse: there’s not even a suitability standard being met” in providing advice on retirement plans.

“I wonder,” he said, “if we’re a little too tolerant. Tolerance is good, but apply it to the situation on how advisors are handling clients […] deviating from the fiduciary standard. Leaders among advisors need to say, ‘It’s wrong.’” —James J. Green

Click here to read the extended profile.

kip Schweiss, President, TD Ameritrade Trust Company; Managing Director, Advisor Advocacy. & Industry Affairs, TD Ameritrade InstitutionalSkip Schweiss

Skip Schweiss knows advisors. Skip Schweiss knows retirement. Skip Schweiss knows Washington. Skip Schweiss knows fiduciary.

So we asked him whether this could be a pivotal year for rulemaking on the fiduciary standard/redefinition at the SEC and the DOL. “I could spend an hour answering that question,” he said before giving us the abridged answer. “I say it’s like the duck going across the pond: On the surface, nothing seems to be going on, but underneath there’s a lot of action, though right now there’s no movement.” Since “it’s a mid-term election year, politicians won’t be doing anything.” And since “Congress by law has to approve an SRO for an industry, you won’t see that this year” either (sorry, FINRA).

What about more SEC funding? “Every year, Obama asks for a 25% budget increase” for the commission, but “they don’t get it” because the dollars come out of the House Financial Services Committee, and “the Republicans won’t give the SEC a 25% budget increase.”

And the SEC? “Mary Jo White hears [about fiduciary] everywhere she goes, but she’s got a lot on her plate” that has a higher priority. The Department of Labor, however, “has a less complex mission—to protect retirement plan participants and workers”—than does the SEC with its three-part mission, “which can conflict with one another.” While the DOL said its fiduciary redefinition will “come out in August, I’ll bet you it doesn’t happen then, and not before the election, but maybe shortly after the election.” —James J. Green

Click here to read the extended profile.

Janet Yellen, Chair, Federal ReserveJanet Yellen

Regardless of who holds the position, the Federal Reserve chairman always plays an influential role in the financial services industry, for both investors and savers. But Janet Yellen, the first woman to serve as the chair of the Fed Board of Governors, arrived in office just as the Fed was beginning to tighten the quantitative easing spigot. As the Fed tapers, many observers worry about the effect on the stock market, while others are worried about the risk of inflation or deflation and everybody is worried about the effect of higher interest rates on economic growth and for the bond market.

Some have wondered, however, if Yellen’s tenure will simply be a continuation of her predecessor’s.

She said as much in her semiannual monetary policy report before the House Committee on Financial Services in early February, pledging to continue former Chairman Ben Bernanke’s work and emphasizing that she expects “a great deal of continuity in the FOMC’s approach to monetary policy.”

She added that she served on the committee as it formulated the current strategy. “I strongly support that strategy, which is designed to fulfill the Federal Reserve’s statutory mandate of maximum employment and price stability,” she said in February.

In an interview last year, another IA 25 nominee, Schwab’s Liz Ann Sonders, said that while Yellen is a consensus builder like Bernanke, she may not let the consensus-building process go on as long as he was wont to do. “She may make a decision faster,” Sonders said. —Danielle Andrus (Photo: Martin Klimek/ZUMA Press/Corbis)

Click here to read the extended profile.

Mark Tibergien, Chief Executive Officer, Pershing Advisor SolutionsMark Tibergien

Mark Tibergien is the only person to have won a spot on the IA 25 for the 12 years of its existence. Is there anything new to say about his influence on the overall industry? Does he have anything new to say about the advisor business and its future? There’s plenty.

Let’s start with his focus on the importance of human capital. It emanates from three places: his experience as an employee; as a business leader at Moss Adams and Pershing; and a “combination of academic and professional studies that validated” what he already suspected.

Tibergien then segues into one of his trademark approaches: applying intellectual and process rigor to people management. “People tend to be somewhat superficial” about their management style, he said. “If you think the key to effective management is to say hello to employees in the elevator, you’ve missed the message.” Properly motivated (or not demotivated) members of your team can accomplish great things. “People are smarter than we give them credit for,” while “one of the worst things we can do is to underestimate people.” Doing so as a manager, “we create ‘dissatisfiers’ that take them from being a self-driven person to someone who just wants to get the hell out.”

For those advisor owners who are reluctant to let valuable younger employees participate in firm ownership, Tibergien pointed out that older advisors “were at one point younger advisors—they weren’t born with gray hair and hemorrhoids,” yet somehow “they were able to build businesses.”

Moreover, he noted that “every other profession uses a master/intern concept, but for some reason financial services prefers to eat its young.” He believes it’s necessary for leaders in the industry “to change the conversation about how they’re going to develop people,” focusing on becoming “an employer of choice.”

As for the future, Tibergien said he encourages everyone who has college-age kids “to take a look at” the profession, which is a “terrific business.” He does worry, however, that “we’re drowning in regulation, some of which contradicts and little that elucidates.” His coda? “It’s a tremendous opportunity—there’s still a lot of money that has to be managed.” —James J. Green (Photo: David Johnson)

Click here to read the extended profile.

Dale Brown, President/CEO, Financial Services InstituteDale Brown

This is the eighth year that Dale Brown has been on the IA 25 list. It also marks the 10th year that FSI, the advocacy group for independent broker-dealers, has existed. By day, the BD members of FSI are fierce business competitors, so how does Dale Brown keep these rivals cooperating with each other?

“Over 10 years, we’ve had a laser-like focus on advocacy,” responded Brown, “and within that overall mission we make sure we’re working on issues that matter to our members and doing so in a constructive way.” Who are the regulators that FSI is trying to influence? Yes, the SEC and FINRA and the DOL, Brown said, but “the states are important for our members” as well.

FSI is halfway through executing a five-year strategic plan that includes a core strategy of “resource growth and member engagement.” FSI member firms “have supported us with their dollars to pay higher dues over time,” Brown reported, and to subsidize membership for their reps (35,000 are now members). Over the next year, “we’ll be working with the board on the next phase” of the plan, including “deepening members’ engagement in advocacy” and “getting members to meet with members of Congress in their own districts.” Another is FSI’s “thorough upgrade of our technology,” including a revised website and a member mobile app.

As for the aging advisor force, Brown noted the “numerous sessions” at its OneVoice conference on succession planning and the next generation of clients. “My expectation,” Brown said, “is that we’ll focus on this issue in our strategic plan for the next five years.” —James J. Green

Click here to read the extended profile.

Bernie Clark, Executive Vice President, Schwab Advisor ServicesBernie Clark

The head of Schwab Advisor Services warms quickly to a favorite subject: the next generation of advisors. “The generation that’s coming behind: they look familiar, talk about having balance in their lives, want relationships, are very social.” Because of their social media bent, the next generation of advisors may be able to accommodate more clients per advisor, he suggested.

That investment in the next generation of advisors is evidenced by Schwab’s program under which students intern at Schwab offices. Schwab, he said, “may hire one or two of them, but our objective is to be in their local community,” and for those students “to be talking about Schwab on their campuses.”

At the same time, Clark “worries mostly about diversity” in the advisor and client ranks. “Women are underrepresented as clients,” and “young people who walk into an advisor’s office will want someone to walk along with them,” he said. “Ethnicity and diversity will be more important in practices.”

Schwab Advisor Services accounts for “half the company’s assets and a quarter of its revenue,” he said, and internally at Schwab, “we needed to not compete with each other.” He admitted that there may be “some open competition” between Schwab retail and Schwab’s RIAs, “but if a client happens to straddle the line, we may make a referral to an advisor or continue for a while at retail.” Chuck Schwab himself “sees the merit” of the RIA business and will be “doing some print and digital advertising,” acknowledging its importance. —James J. Green (Photo: Tom McKenzie)

Click here to read the extended profile.

Tom Nally, President, TD Ameritrade InstitutionalTom Nally

When Tom Nally was first honored on the IA 25 in 2012, his profile was as much about his predecessor at TD Ameritrade Institutional, Tom Bradley, as it was about Nally. Two years later, it’s all Nally, who has stamped his own personality on the RIA custodian.

While Nally is a cheerleader for the RIA model, he’s no Pollyanna when it comes to the challenges that RIAs and TDAI face. In an April interview with IA, he declared, “We try to be an industry leader in all the areas of the market where we engage,” but “we can’t be all things to all people.” He then listed the areas where he believes the firm shines: providing great service, “we publish our CSI scores in our advisor magazine—we’re transparent about that”; technology, critical to helping its RIAs “build scalable businesses”; trading, increasingly a “differentiator for advisors”; practice management, “we don’t want to be publishing white papers” but rather “take a more tactical solutions approach” reflecting “our fundamental belief in the RIA model”; and human capital, including in its hiring practices where TDAI management values job candidates for “what their capabilities are more than what their experience is.”

He admitted that as an industry “we still have a lot of work to do” in rebuilding trust among the public, and “we need to do a better job of adapting our business model to better serve” sectors of American society. That includes younger people, women, the less affluent and the less white. “It’s about embracing diversity; your team should reflect the market you’re selling into. We must attract more women and minorities.” —James J. Green

Click here to read the extended profile.

Nicholas Schorsch, Executive Chairman, Realty Capital SolutionsNicholas Schorsch

In June 2013, RCAP Holdings said it planned to buy First Allied Securities and the Legend Group from Lovell Minnick Partners, a private-equity group. RCAP Holdings owns Realty Capital Securities, a wholesale broker-dealer and affiliate of American Realty Capital Properties.

Now, the Realty Capital organization has four more IBDs under its umbrella (though the deals are pending): Cetera Financial Group, Investors Capital, J. P. Turner and Summit Financial Services. This means it has close to 9,000 independent advisors serving about 2.5 million investors.

Also in 2013, Realty Capital Securities recruited Larry Roth from Advisor Group, the 6,000-rep independent broker-dealer network owned by AIG, to become its CEO. As a manager, Nicholas Schorsch is very supportive of those he works with, according to Roth: “He understands what businesses we need to be in. He expects everyone to work hard.”

Thanks to this work ethic and his business skills, Schorsch received the Ernst & Young Entrepreneur of the Year 2003 Award and the Ernst & Young Entrepreneur of the Year 2011 Lifetime Achievement Award for real estate.

First Allied CEO and President Adam Antoniades said Schorsch “sees himself as a strategic operator who’s there to serve as an asset to the group’s managers, to empower them to move on the business model, to take obstacles out of their way and to find solutions.”

That role is important because Schorsch “works at a pace and speed that are intense,” said Antoniades. “I have never experienced anything like it before.” —Janet Levaux

Click here to read the extended profile.

Dan Skiles, President, Shareholders Service GroupDan Skiles

Dan Skiles’ profile was raised last year when he was promoted to president of Shareholders Service Group, the RIA custodian, but for many advisors, Skiles was already well-known from his work at Jack White and Charles Schwab. He’s among that elite coterie of advisor partners who thoroughly understand not just advisor technology but how it can best be used to improve a firm’s business.

Skiles is passionate about employee-owned SSG, which has grown rapidly since he joined the firm in 2009 from less than 400 RIAs on its platform to more than 1,200. SSG’s advisors are mostly smaller RIA firms, but Skiles argued that “size doesn’t matter anymore” because “with the world of outsourcing and cloud-based systems […], in some cases, firms with only $50 million in AUM can run and leverage better technology than even much bigger firms.”

On the aging advisor force, Skiles argued that “succession planning will change” as new technology is constantly rolled out that is accepted—or even demanded—by clients. On robo-advisors, Skiles sees a threat to advisors who focus solely on investing. Most clients have complex lives, he said, because “life is not consistent; questions come up throughout the year that you never anticipated.” Human advisors “are there for those questions.” He also encourages advisors “who’ve been raising their minimums to think about a different offering that allows them to serve people with less money. Getting experience in serving less affluent clients may well help you bring on as clients those beneficiaries of your current clients.” —James J. Green

Click here to read the extended profile.

Josh Brown, CEO, Ritholtz Wealth ManagementJosh Brown

Many enthusiastic bloggers, financial or otherwise, have fallen and will continue to fall by the wayside, but not New York-based financial blogger par excellence, Josh Brown. He launched his blog,, in 2008 as “a place to vent and give people an idea of what it felt like to be a broker in a financial crisis.” Brown believes a blog is a beast that must be fed, and today, he is as prolific as ever in the blogosphere. The issues he’s writing (or venting) about might have changed since 2008, but the blog’s readership is as strong as ever, and Brown continues to inform and entertain his readers with his market-related insights and thoughts on various events as they unfold.

“Most of the feedback I get is from other advisors who say, ‘Thanks for doing what you do,’ or ‘You just said out loud what I’ve been thinking all day,’” Brown said.

He credits the success of his writings to his outspokenness and frank, forthright approach.

He cited a recent post, “The Relentless Bid, Explained,” as one of the best examples of the kind of interactive discussion his blog generates. The post—which, he said, went viral—discussed Brown’s view on the nation’s largest traditional advisory firms having accelerated their push toward fee-based management and away from transactional brokerage, which in turn has a huge impact on how the money itself is managed and also affects the performance of the stock market.

Last September, Brown launched his own fee-based investment advisory firm, Ritholtz Wealth Management in New York. —Savita Iyer-Ahrestani

Click here to read the extended profile.

Caleb Brown, Partner, New Planner RecruitingCaleb Brown

When Caleb Brown graduated from the Texas Tech financial planning program in 2002, it took him a while to get an advisor to “take a risk” and hire him. After that, he saw a lot of other qualified students “who were built to be great financial planners” leave the industry entirely because they couldn’t find a job or the jobs they did get weren’t right.

“I said to myself, ‘We can’t continue as a profession if we continue to lose these quality people, so I’m going to try to do everything I can for this not to happen,’” Brown recalled in an interview with IA.

Since then, Brown has served on the board of directors for FPA Dallas-Fort Worth, where he implemented a career day program that has been adopted by several other chapters.

“Up until that time, career development meant, ‘We’re going to provide a program for the 55-year-old CFP, business owner, bald-headed guy,’” Brown said. “And I said, ‘We’re not going to do that anymore.’”

Brown started a program that focused on career changers and students, educating them on the career options the financial services industry provides. He started New Planner Recruiting in 2009 with Michael Kitces and now spends the majority of his time helping firms “get it right” when it comes to bringing in the next generation of talent.

Attracting the next generation isn’t much different from attracting new clients, Brown argued. To add either, firms need to differentiate themselves. “When I’m on the phone talking to candidates, I’ve got to have something that I can get them excited about. If they’re any good, they’re going to have two or three different offers. If my client doesn’t have a good story to tell, I’m never going to get the position filled.”

Beyond that, firms need to offer students the opportunity to grow into advisors. “New planners want to have exposure to client meetings,” Brown said. “The fact of the matter is, the CFP programs are very good, but you’re learning the science of financial planning; you’re not really learning the art,” he added. “In our business, unlike law, medicine or accounting, it’s much more art than it is science.”

As advisory firms focus more on career changers and next-gen for talent, Brown expects fewer firms will steal experienced advisors away from competitors. “Even though hiring someone with very little experience is a time commitment, you at least have a clean slate to work with; it’s going to be a time commitment with an experienced person as well,” Brown said.

Instead, firms are building internal internship programs, Brown said, to look for talented future advisors. “It’s like a baseball team,” he said. “Let’s see what our farm team looks like and see if we want to make a hire.”

One strategy established firms are adopting, according to Brown, is to implement an “emerging wealth division.”

“They’re taking the same approach to developing their new talent to develop their next generation of clients,” Brown said. “Someone who doesn’t have $2 million to manage but who is 30 years old and is going to earn a lot of income, let’s turn them into a good client. When I started the business, the firms out there were not interested in clients like that.” —Danielle Andrus (Photo: Stan Kaady)

Click here to read the extended profile.

Joel Bruckenstein and Dave Drucker, T3Joel Bruckenstein & David Drucker

From their first book in 2002, “Virtual Office Tools for a High Margin Practice,” to their conference, Technology Tools for Today (T3), Joel Bruckenstein and David Drucker have made a name for themselves as the authority on technology for advisors.

“Early on, advisors knew very little about technology and specifically about technology for this industry,” Bruckenstein said. “As advisors have gotten more sophisticated about technology, we’ve had to up our game.”

At the 2014 conference, there was an emphasis on emerging technologies, Bruckenstein said, with “a record number of new companies with interesting products. There’s a lot more interest among people who are interested in building technology for the financial services industry, and more and more of them are targeting the RIA space.”

The goal isn’t to host a huge event every year, Bruckenstein said, but to “bring technology to the masses,” according to Drucker.

From about 150 advisors to 600, the conference has grown as a way to educate advisor tech users, but has also served the tech makers. “The sponsors at our conferences probably get as much out of visiting with each other as visiting with the advisor attendees,” Drucker said. “Many product integrations have grown out of the relationships that were formed at our conference.”

Bruckenstein and Drucker have even added an enterprise edition of the T3 conference to bring tech education to executives at broker-dealer firms. The second annual enterprise conference will take place in November. —Danielle Andrus

Click here to read the extended profile.

Harold Evensky, President, and Deena Katz, Chariman, Evensky&Katz Wealth ManagementHarold Evensky & Deena Katz

Between them, Deena Katz and Harold Evensky have been on the IA 25 a total 13 times, which isn’t bad when you consider this is only the 12th time we’ve published it. Why is this husband-and-wife advisor team on the list again?

Partly it’s their body of work—they’ve both been influential for years because of their intellectual capital, their early adoption of the fee-only model, their work on getting advisors recognized as a profession, their leadership in advisor associations and their promotion of female advisors.

At a stage in their careers when many advisors might be expected to slow down, Katz and Evensky are instead doubling down on their commitment to the next generation of advisors. Beyond teaching classes and mentoring students at Texas Tech University, and helping graduates get actual jobs, they’re also evangelists for the next generation of planners.

To build an academic program that gets respect from the academic community—no small matter, if you’ve spent any time in the groves of academe—they’re also mentoring that next generation of financial planning researchers and instructors for Texas Tech and other universities.

As Evensky noted in an interview, he’s also “teaching” researchers to be as practical as they are academically rigorous. Researchers too often make “simple assumptions,” failing to consider what practitioners like Katz and Evensky would be sure to include, such as transaction costs. —James J. Green

Click here to read the extended profile.

Tom Giachetti, Chairman, Stark & StarkTom Giachetti

Tim Welsh of Nexus Strategy likes to call Tom Giachetti the only “celebrity securities attorney.” The chair of the securities practice at the law firm Stark & Stark, Giachetti has parlayed his skills to become a sought-after speaker who translates in blunt language, and with a Jersey verve, what regulators are looking for when they examine advisors.

So what should advisors worry about, and what should they ignore? “What they’re not worried about but should” is to think that “the SEC can’t be concerned about a small firm like mine.” In fact, the SEC is “looking to send a very aggressive, punitive message” to even smaller advisors. Giachetti said that SEC Chairman Mary Jo White was brought in “to clean up Wall Street, and advisors have become part of Wall Street.” He worries that she and the other commissioners may know much about the law, but have inadequate knowledge of the Advisers Act. Instead, White has “hired a lot of prosecutors, and what do prosecutors do? They prosecute.”

White and the SEC also fail to understand that “advisors did not blow up the markets in ‘08 and ‘09,” so “the prosecutorial attitude taken by examiners,” he said, “is misplaced.” Moreover, he said SEC exams are being used by the commission “to make laws that don’t exist, couching them in recommendations.”

He said that there is a way to resolve the current situation where SEC commissioners and examiners “don’t know anything about the ‘40 Act,” jokingly promising that “I just want six months as commissioner, and I can fix it.” —James J. Green

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Michael Kitces, Director of Research, Pinnacle Advisory GroupMichael Kitces

One has to wonder how Michael Kitces does it: the advisor, blogger, Twitterphile, industry speaker and NextGen founder is constantly evolving and taking on new challenges not only so that he stays ahead of the curve, but so that his peers can do so as well.

“It’s just the way I am—I’m hard-wired to look a couple of years down the road,” Kitces told IA in an interview.

Indeed, helping advisors “stay ahead” is really the catalyst for Kitces reviving his popular Nerd’s Eye View blog, available via, about three years ago. Since “reinventing himself” in the fall of 2010 and getting “active on social media,” his blog, website and Twitter following has experienced “incredible growth.” gets 50,000 unique visits per month, and he has more than 13,000 Twitter followers.

One recent trend that Kitces alerted advisors to via his blog is what he calls “the crisis of differentiation.” Said Kitces to IA: “It wasn’t all that long ago that comprehensive financial planning made you unique; that’s not true anymore.” Advisors must find out what differentiates them and build toward a niche, he said.

Kitces will officially be “kicked out” of FPA’s NextGen this year when he turns 37. But he isn’t leaving the younger advisors—or clients—behind. In early April, he co-launched the XY Planning Network, a platform to help young planners build a fee-only business targeting Gen X and Gen Y clients.

Members, who “must offer monthly retainers and be willing to work with clients virtually,” should be “live and active” on the network by June 1, he said. —Melanie Waddell

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Sallie Krawcheck, Business Leader, 85 BroadsSallie Krawcheck

Sallie Krawcheck’s “real career” started “just shy of 30” when she became a research analyst, she told IA in an interview.

“Every firm on Wall Street rejected me. Lehman Brothers rejected me about three times. Smith Barney rejected me because they didn’t think I’d work hard. I later fired that director of research,” she said.

After a few well-publicized job changes, she purchased 85 Broads, the “unfortunately named professional women’s network” of about 35,000. The network started as an informal alumni network for women who worked at Goldman Sachs—originally at 85 Broad St. in New York—but with Krawcheck at the helm, the group is expanding its focus to include education.

Networking is the “No. 1 unwritten rule of success in business,” Krawcheck said, but the organization is also educating its members so “they have the tools they need to move themselves along to make themselves more successful economically and financially.”

What about that niche advisors are starting to realize isn’t a niche at all? “Everyone has a women’s initiative and everyone has a women’s panel,” Krawcheck said. “We went past the ‘ignore women’ [stage]. The stage we’re now at is everybody is marketing to women, but nobody is really serving women; that’s a big difference.”

Krawcheck said of 85 Broads that the mission is “driven in good part because of my lessons learned about the importance of diversity.”

As for the name, “Oh, we’re definitely going to change it.” —Danielle Andrus

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Amy Webber, President, CambridgeAmy Webber

“Starting with the fact that we can’t control things like the market and economy or regulation, I’m wildly optimistic about our industry,” Amy Webber, president of Cambridge Investment Research, began our IA 25 interview. “I just believe that the independent model is extremely resilient.”

Webber is focusing on what Cambridge can do today to strengthen the industry in the future. The firm has continued to support the next generation of advisors with projects like the Synergy Exchange mentoring program.

“We started Synergy Exchange a year ago in the female advisor space,” Webber explained, “but have recently expanded it because we realized we could replicate the need for mentoring to the next generation as a whole.”

The firm just launched a new reverse mentoring program for older advisors who are interested in whether younger or female advisors can provide a “better view into the psychology of the investors that they should be thinking about,” Webber said.

While those programs are new, Cambridge’s focus on the next generation isn’t. Over the last five years, it’s gotten the “60-something advisor to recognize they need a 40-something advisor,” Webber said. “Now we need to get those 60- and 40-somethings to realize that they can get value out of the 20-something.”

Other initiatives include the New Century Council, an advisory council of advisors in their mid-40s, and WealthPort, a “huge project” Cambridge undertook last year to “build a technology and service platform for our managed account solutions.” —Danielle Andrus

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Liz Ann Sonders, Senior Vice President, Chief Investment Strategist, Charles Schwab & Co.Liz Ann Sonders

Financial markets are best entered at the inflection point, when even if the data that most people use to make their decisions is ugly and the news is not so great, there exists nevertheless a launching point for a new, positive market cycle.

Unfortunately, the investor psyche is wired such that “people want data that confirms market optimism,” said Liz Ann Sonders, senior vice president and chief investment strategist at Charles Schwab & Co. “They don’t feel comfortable till all the unemployment and trade data is out, and inevitably, they miss the inflection point at which they should have entered the market.”

That’s why investor psyche and sentiment are at the heart of what Sonders does.

As one of the most popular and respected voices among advisors on market and economic outlook, Sonders believes she has a duty to keep things simple and to tone down what she terms “the fire hose of information” that hits the investing public.

The simpler the information is, the easier it will be to bring investors back into the markets. That many still have a “muscle memory” of the crisis is a good thing, she said, but at the same time, the pervasiveness of skepticism that is still causing many to hunker down and stay away from the markets is doing them a disservice.

Why is Sonders an advisor favorite? Partly it’s her optimism about the benefits of investing, which reflect advisors’ generally bullish views, but also her research into what the past and present can suggest about the future.—Savita Iyer-Ahrestani (Photo: David Johnson)

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Michael Finke, Professor, Texas Tech UniversityMichael Finke

As professor and coordinator of the doctoral program in personal financial planning at Texas Tech University, Michael Finke is helping drive the university’s goal of serving “as an educational home” for the financial planning community.

“Our hope is to build a set of research-based best practices through our own research,” Finke told IA.

Indeed, Finke said that he’s most proud of a series of articles that he wrote last year along with American College professor Wade Pfau and David Blanchett, head of retirement research at Morningstar, that looked at the impact of low asset yields on the sustainability of retirement portfolios. “We tried to make a number of points,” Finke said. First, that “the traditional way that advisors think about building retirement income, the 4% rule, may not be as safe as many advisors are led to believe if we have a low-return environment.”

Finke said he and his colleagues’ goal is “trying to introduce a different way of thinking about building a retirement income plan” and retirement risk, including the importance of considering “partial annuitization,” responding to changes in the marketplace and how much retirees should spend.

Retirement income is “increasingly important” as boomers rely on their savings to fund their retirement, he said, so it’s crucial to develop strategies to turn their money into income.

Finke hopes to look “more closely” at incorporating strategies such as “longevity hedge products” into portfolios. “These products’ availability is somewhat limited now, but I’m hoping to see more product innovation in the future.” —Melanie Waddell (Photo: Jim Olvera)

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Bill Gross, Co-Founder/CIO, PIMCOBill Gross

“Treasure your pets and all living things. Eventually we all stop living.”

So wrote Bill Gross, founder of bond behemoth PIMCO, in his April investment outlook letter dedicated to his beloved cat Bob.

When you look at things that way, not much else matters—not even, perhaps, in the grander scheme of life, the disappointing performance of PIMCO’s flagship Total Return Fund (PTTRX), which has been on a downward trajectory for nearly a year.

The negative performance of the largest bond fund in the world—it has been trailing 87% of its peers this year as of April, according to data from Morningstar—has been an important item of financial news for months. For many financial advisors, it remains a source of great disappointment.

The parting of ways between Gross and PIMCO’s former CEO and co-CIO, Mohamed El-Erian, also generated a great deal of press and caused many institutional investors to watch PIMCO even more closely.

Yet PIMCO and Gross are inextricably linked, and recent problems aside, Gross’ long-term track record in the market is still one that’s tough to beat. Over the past 15 years, the fund’s risk-adjusted returns have been among the highest. There is something about Gross that continues to intrigue advisors and their investors, and makes them believe that the man who once turned $200 into $16,000 at the blackjack tables and who, he has said, gets some of his best investment ideas while practicing the Sirasana, or headstand, still has it. —Savita Iyer-Ahrestani

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Wade Pfau, Professor of Retirement Income, The American CollegeWade Pfau

Teaching retirement income in The American College’s new Ph.D. program for financial and retirement planning is a sea change from teaching macroeconomics to public policymakers from emerging market countries.

But for Wade Pfau, who came to the Bryn Mawr, Penn.-based American College in 2013 after a decade at the National Graduate Institute for Policy Studies in Tokyo, the radical shift in career is a very welcome one.

“Economics focuses on trying to demonstrate mathematically why some models work, whereas with financial planning, you can’t get away with using models and assumptions. You have to explain things so that they’re both understandable and relatable,” said Pfau, who considers it his priority to bridge the gap between academic research and its practical application.

His name first came into the spotlight in 2011 with a research paper entitled “Safe Savings Rate: A New Approach to Retirement Planning over the Life Cycle,” and much of his work is still centered on its main concept: That anyone who saves at their own “safe savings rate” will likely be able to achieve their retirement spending goals, regardless of their actual wealth accumulation and withdrawal rate.

The viewpoint is catching on with advisors and consumers, but retirement research is still largely focused on the notion that individuals need to find a safe withdrawal rate for their retirement and then use that as a barometer to compute a wealth accumulation target in order to fund their desired retirement spending. —Savita Iyer-Ahrestani

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