Monthly Archives: August 2016

Category: Client Forum, Conferences and Events

How to Talk Politics at Work: Advice from Greg Valliere


GregValliere blog postGiven the passion many people are feeling around the 2016 presidential election, I imagine many of us are working very hard to avoid wading into partisan waters at work. Having a list of “safe for work” political topics can come in handy if lunch time conversation with coworkers turns to politics.

The team helping to prepare for the 2016 Client Forum is immersed in the presidential election because we are again featuring political strategist Greg Valliere on the agenda. Valliere joined us for the  Forum in Chicago in 2015, where he addressed serious issues affecting the pre-election climate; topics like monetary policy and interest rate politics.

Greg Valliere perspectives post(1)

Five months ago, in an article published by Investment News, Valliere is cited saying the 2016 presidential election is the “nastiest” and “most unserious” he has ever seen. I know I’m eager to hear what he has to say about the key issues for investors in the Trump/Pence versus Clinton/Kaine (versus Johnson/Weld?) race.

As part of our Client Forum prep, I’ve been watching recent videos of Greg’s presentations and commentary. This assignment has helped me develop my personal list of six “safe for work” political conversation topics that focus not on individual candidates or personal opinions, but instead on relevant industry issues.

Topic 1: What are the economic factors that may have contributed to the outcomes of the primary race, and the selection of the final nominee for each party (e.g., uneven wage growth, public attitudes about trade policy)?

Topic 2: What is the potential impact of party platforms on Wall Street performance (e.g., “Will a hawkish administration contribute to improved performance of defense stocks?”)?

Topic 3: How will the legislative agenda be affected by the November elections? What might come of the quid pro quo deals that are a necessary part of political sausage making (e.g., “I’ll endorse you if you commit to a comprehensive overhaul of the tax code.”)?

Topic 4: What is the potential impact of legislative reforms on the industry (e.g., “How will repatriation of corporate foreign earnings affect the deficit?”)?

Topic 5: How will next term’s docket of the Supreme Court of the United States be affected by the changing direction of the polls?

Topic 6: What are the implications of the outcome of our election on geopolitics (e.g., Syrian refugee crisis, potential dissolution of Europe, China trade deals)?

What other questions would you ask to help an office-based political discussion stay relevant to the workplace? Share your ideas in the comments below, or post them on Twitter and tag us at @BFClients.

CF(1) Perspectives post

You can also share your insights on Thursday, September 15 when Greg Valliere takes the stage at the 2016 Client Forum. If joining us for this exclusive event is not on your radar screen but you want to be part of the discussion, I invite you to follow #BFCF16 hashtag on Twitter to participate in Greg’s presentation in real time.


Category: Client Forum, Conferences and Events

$60 Billion a Year: Why Ethics and Culture Matter in Today’s Regulatory Environment


One estimate claims asset management firms, or their parent companies, have paid $60 billion annually in fines and litigation costs related to cultural failures since 2010. It is no wonder that FINRA is now reviewing corporate culture and business ethics as part of its examinations. Nancy Rapoport post(2)_8.9.16

What does this mean exactly? FINRA’s targeted exam letter, published on their website in February 2016, states “…FINRA is reviewing how firms establish, communicate and implement cultural values, and whether cultural values are guiding business conduct.”


In this letter, FINRA goes on to say that their exams will likely address:

  1. Policies and processes that help set the cultural tone and values of your firm
  2. Efforts to promote, strengthen, or change a firm’s culture
  3. Processes for communicating the firm’s culture and values from the top down
  4. Measurement of a firm’s culture, complete with documentation
  5. Processes used to identify and resolve cultural breaches

While the ethical standards against which firms may be judged could be unclear or inconsistent, what is clear is that being prepared for this new exam will help your firm avoid potential reputational risk.

Being prepared for this level of scrutiny goes beyond putting together a documentation file to present to the FINRA examiners.

Nancy RapoportAccording to Professor Nancy B. Rapoport at the University of Nevada Las Vegas, another step in preparedness might be to figure out what the actual default rules and incentives are in your firm that could contribute to ethical lapses, rather than focusing upon the documented policies and procedures that purport to govern corporate ethics. In her 2014 paper, “Nudging Better Lawyer Behavior”, Rapoport writes, “Every business that has failed, with its C-level officers indicted or sued, has had rules. The real (behavioral) incentives, though, cut against following those rules.”


Throughout the paper, Professor Rapoport details case studies in ethical lapses unintentionally caused by well-meaning organizational practices. One example is the case of one law firm’s decision in the 1980s to tie compensation to new business development, which led to fierce internal competition for new clients, resulting in a secretive sales culture and client deals that undermined the overall goals of the firm.

As was the case with that law firm, people work to meet the incentives they’re given — whatever those incentives may be. In order to help uncover what practices at your firm might be contributing to ethnically questionable behaviors, Rapoport suggests the following four steps:

  1. Identify both the questionable behaviors and the incentives or social pressures that may trigger that behavior
  2. Define what alternative behaviors or cultural practice your firm wants to encourage
  3. Create new incentives to support the organizational change
  4. Test to see if those new incentives create some different, negative side effects

CF(1) Perspectives postAre you going to the 2016 Boston Financial Client Forum this year? Professor Rapoport will explore these steps in greater detail when she opens the event on Thursday, September 15.

If joining us for this exclusive event is not on your radar screen but you want to hear more, look for our wrap-up of Day One of the Client Forum here on Perspectives. Or follow #BFCF16 hashtag on Twitter to “listen” to her presentation in real time.

Category: Client Forum, Conferences and Events

Why #BFCF16 Is The Can’t Miss Conference for Clients


When it comes to industry conferences, I know you have plenty of choices. So what’s the compelling reason to attend the Boston Financial Client Forum? The short answer: you. Our clients make the event what it is.

CF(1) Perspectives post

For three days, every September, clients can count on uninterrupted time with like-minded peers. Time spent engaging in conversations, exchanging meaningful ideas, having personal interactions, and building relationships. The value of meeting in person is unmistakable.

One of my favorite aspects of the Forum is the client interaction, and based on your feedback, we know it’s important to you too.

As you may know, one of my responsibilities includes creating and managing the agenda, so I make sure there is time for networking. I identify speakers to ensure we’re bringing you new ideas and delivering content that is tailored to your interests and challenges. It’s a job I don’t take lightly because your time is valuable. I know attendees look to the Forum for actionable ideas they can take back to their team. I want to make sure we deliver that promise.Client Forum 2015 Collage

This year’s speaker lineup, based in large part on client feedback, includes election politics and the markets, cybersecurity, FinTech, DOL, third-party risk, and more. This year we’re introducing a new segment, “Insights & Experiences from the Client Community.” It’s where we turn the discussion over to you, our clients.

Three client panels are planned; each panel will delve into an industry challenge. Hear from your peers at AFS, Charles Schwab, Dodge & Cox, MFS, Putnam, Pioneer, and Wells Fargo.

CF Nashville post

What else is new at this year’s Forum? This year the Forum is headed to the Music City. We’re thrilled to be in Nashville. Amy Gordon, our event planner, has been busy locking down the final details for all the fabulous events we have planned. We know during the day you’re focused on getting the most out of the sessions, but come the evening it’s time to unwind and have fun. And we know how to have fun at the Forum!

If you’re in Nashville on Wednesday evening, join us for dinner at Acme Feed & Seed with entertainment by Johnny Carter Cash. Thursday’s evening event will take place at a private estate — one of Nashville’s most prestigious. You’ll enjoy cocktails, dinner, and music in this sure to be stunning setting.

I believe the 2016 Client Forum will be the best forum to date. Clients can count on valuable content, amazing events, and the opportunity to meet a variety of people and build new relationships. Each year, the Forum experience gets better thanks in large part of you. I can’t wait to see what this year’s event brings!

Join us at the Client Forum in Nashville this September 14-16. Register today. A limited number of guest rooms are available for Client Forum attendees at a discounted rate. The rate is available until Friday, August 12 or until the room block has been filled. Don’t miss out, reserve your room today! #BFCF16.  


Category: Compliance, Transfer Agency

Clearing Through the Clutter: Preparing to Meet Your Transfer Agent Needs under the DOL Fiduciary Rule


This material is intended for informational and discussion purposes only and it not a legal opinion or analysis and cannot be relied upon as authoritative. Matters discussed in this article must be referred to your counsel for review.8.2.16 DOL blog post

Are the in-boxes and social media feeds at your firm overflowing with blog posts, news articles, and webcast invitations promising to help you understand the impact of the DOL Fiduciary Rule? They are at Boston Financial and DST. And the situation has been made worse by the second wave of information promising to explain the potential impact of a myriad of lawsuits filed against the DOL seeking to prevent the Fiduciary Rule from taking effect.

So what’s an asset management firm to do? Put your preparations on hold, waiting for a potential injunction against the DOL? Or continue to corral resources to develop a plan for compliance?

If your firm has decided that the financial and regulatory risk of not complying is too great to wait for the outcomes of a potential lawsuit (or five), we suggest your plans include an operational impact assessment to examine the role the Fiduciary Rule may have on your back-office policies, procedures, controls, infrastructure, and oversight.

Getting Started: Questions to Consider:

What’s the best way to start, given the volume of information available about the Fiduciary Rule?

During a recent webcast hosted for our client community, Nick Horvath and I outlined some suggested steps to help asset management firms clear through the clutter so they can begin to prepare to comply with the Fiduciary Rule. In our presentation, we recommended that firms focus their attention on two areas:

(1) points of retirement customer contact, particularly in their call centers, and

(2) the transaction processing touchpoints with retirement investors.

Assessing the Impact on Customer Contact

The DOL Fiduciary Rule redefines what constitutes investment advice under ERISA and the Internal Revenue code, and increases protections for consumers. We believe this calls for a review of all points of customer contact to assess what types of contact may be redefined as advice under the Rule. To do this, consider the following steps:

  1. Inventory your shareholder contact points. Which types of contact constitute shareholder education versus investment advice?
  2. What is the impact of the new definitions of education versus advice on your shareholder call center — for both your IRA and retirement products for any of the potential caller scenarios (e.g., a call from a beneficiary versus a call from a plan sponsor)? What improvements are needed in terms of call scripting, staff training, and oversight? Consider looking closely at:
    • Inbound calls from shareholders requesting account transactions or making general inquiries about account status
    • Inbound calls from shareholders requesting product information or making “how to” inquiries
    • Outbound calls and correspondence regarding transfer of asset transactions and not-in-good-order clarifications
  3. What is the impact of these new definitions on your print and electronic fulfillment? On your written correspondence? Your website? What improvements are needed to educational content and messaging? What improvements are needed to the process of developing and pushing out material?
  4. Finally, what improvements are needed to your content management and oversight processes to ensure ongoing compliance with the DOL Fiduciary Rule?

Transaction Processing

During the webcast, we also suggested that asset management firms take time early in the process to examine the impact of the DOL Fiduciary Rule on their transaction processing environment, particularly for transactions that will be executed under a BIC (best interest contract). In addition to completing a comprehensive transaction processing assessment, firms may want to take a granular look at the need for process and systems improvement in the following areas:

  • Systematic agreements, which are grandfathered, versus one-offs and new rollovers
  • Handling default dealers on shareholder-initiated purchases and new accounts
  • New account set-up
  • Dealer assistance monitoring activity for direct accounts

Once a firm has identified where the points of impact will be, they will want to proceed with either adjusting their in-house operations and technology systems, or working with their business processing outsourcing provider to ensure they are making the necessary adjustments to comply by the relevant go-live dates.

Enterprise Preparations

DST and Boston Financial are clearing through the clutter within our shareholder recordkeeping systems and operations procedures with an eye toward how we can support our clients with respect to the Rule. Our enterprise-wide operational assessment identified more than 300 potential areas of impact — ranging from calls with shareholders, to core processing (e.g., transfers, account maintenance), and all touchpoints spanning correspondence, mail center, quality control, special mailings, media updates to confirms/ statements/ forms/ websites and year-end activities. Subcommittees and working groups are thoroughly analyzing these areas to try to understand the implication of the Rule on each process or service.

A Clearer Path for Moving Forward

Both asset management firms and back-office service providers have a very short turnaround time for analyzing, and then meeting the terms of the DOL Fiduciary Rule. Focusing on the two key areas of impact to your back-office operations — shareholder contacts and the transactions that result — may offer your firm a clear path for moving forward in your own preparations. 8.2.16 DOL blog post (2)

Nick Horvath, DST Compliance Officer, contributed significantly to this blog post. Nick Horvath perspectives

Nick is the Compliance Officer for DST’s Asset Management Solutions business unit. In that role, he is responsible for leading DST’s strategy in shaping, communicating, and implementing regulations that impact shareholder recordkeeping. With responsibility for the general risk management of Asset Management Solutions, Nick led the formation of the Full Service fraud prevention program along with the establishment of its online “Best Practices” library. He also led the development of and now administers DST’s Chief Compliance Officer support program. Mr. Horvath came to DST from a large bank in Texas, where he was vice president over the institution’s stock transfer operations. A featured speaker at webcasts and industry conferences, Mr. Horvath leads the Steering Committee for the DST’s Regulatory Compliance Advisory Group. A certified Public Accountant, Nick earned a Bachelor of Business Administration from the University of Iowa. He is the author of several SEC comment letters.