Impact society by putting the client’s long-term objectives first. The new CFA Institute CEO Paul Smith made this point clear, making it the driving charge of the CFA Institute under his watch. He suggests that managing client investments is a noble profession which has positive societal benefits when done through adhering to a radically client-centric model. See What Does Stewardship and the Fiduciary Standard have in Common.

We need to show that investment managers work to meet #investment objectives and society impact. Paul Smith #FutureFinance #CFA2015 #CFA — Marshall Smith, CIPM (@1stRateMarshall) April 27, 2015

.@michaelviehs #Fiduciary duty is not at odds with providing environmental and social good. #FutureFinance #ESG #CFA2015 #impactinvesting — Marshall Smith, CIPM (@1stRateMarshall) April 28, 2015

Greece has no friends and European QE blues. The near-unanimous consensus among the speakers and audience is that Greece will default and will likely be forced to leave the European Union. Hans-Werner Sinn was a particular advocate of this argument as well as saying the only way to fix Greece is for them to reduce their income to match their economic output. That would be a heck of a campaign slogan. The likelihood of a Greek default is only delayed by the minimally effective European version of American QE (Quantitative Easing) which keeps the cost of restructuring massive debt low.

.@HansWernerSinn Greece problem is higher wages than output. Reforms should be to lower wages to match output. #FutureFinance #CFA2015 — Marshall Smith, CIPM (@1stRateMarshall) April 27, 2015

Markets expected QE programs, they worked better before they were announced. Jurgen Stark. #FutureFinance #CFA2015 @CFAinstitute #investing — Marshall Smith, CIPM (@1stRateMarshall) April 27, 2015

#Europeans are not engaged in equity markets like in US, #QE will not same #economic impact. Jurgen Stark #FutureFinance #CFA2015 #investing — Marshall Smith, CIPM (@1stRateMarshall) April 27, 2015

Goal-based investing is about likelihood to meet client goals. Jean Brunel argued the best way to get clients to describe their goals is to separate which are wants and which are needs. With this in mind, investment managers can determine the percentage likelihood to achieve them (higher for needs, lower for wants). The output of the analysis is a minimum required return to provide this likelihood. Using these inputs, the goals can be aggregated to be managed in a similar to an institutional portfolio. It’s great to see a goals-based approach gaining steam across the globe. See First Rate Whitepaper on Goals Based Reporting. Short-term investment outlook is like the plague – Based on an audience poll, the industry is getting worse and not better when it comes to having a long-term focus. Some suggested that the monthly and quarterly reporting encourages short-term based actions by institutional board members without adequate investment expertise.

Andrew Sheng: Short-term #investing = about me long-term = about all of us We are managing the next generations #money #FutureFinance — Marshall Smith, CIPM (@1stRateMarshall) April 28, 2015

Roger Urwin of @towerswatson says long termism is in the interest of long term stakeholders and intergenerational equity #FutureFinance — Mark Harrison (@MarkHarrisonCFA) April 28, 2015

The #investment industry is too focused on short term #performance and not enough on long term objectives of clients #FutureFinance #CFA2015 — Marshall Smith, CIPM (@1stRateMarshall) April 27, 2015

Investment Industry should learn from Medicine – Cambridge Professor John Coates gave a compelling argument for how biological responses to stress drive decision making amongst investment managers. His argument, make decisions purely based on data and results of research and not based on intuitive or gut feel.

John Coates @CFAinstitute: finance should learn from medicine; doctors not driven by theory but follow what works best #FutureFinance — Rebecca Fender, CFA (@RebeccaFender) April 26, 2015

#Financial theory is plagued by the theory that mind and body can be separated. John Coates #FutureFinance #CFA2015 pic.twitter.com/6LljcqAUjd — Marshall Smith, CIPM (@1stRateMarshall) April 26, 2015

#Risk preferences shifts are doing major damage on #WallStreet and are driven silently by biology. John Coates #FutureFinance #CFA2015 — Marshall Smith, CIPM (@1stRateMarshall) April 26, 2015

On another note, the annual conference is located in Frankfurt, Germany. It’s funny that no matter how far you travel, it’s always refreshing to hear “Hey, First Rate, I love you guys!”

Happy Client from Atlanta in Frankfurt #futurefinance @FirstRatePerf pic.twitter.com/rFzD4387CW — Christian Jaeger (@Dschaegga) April 28, 2015