FPA of MN Newsletter – April 2015
President’s Message – April, 2015
Greetings to All,
As 2015 (and the beginning of my term as FPA of MN President) approached, I will admit that I had no idea what to expect for the year ahead. Three months in, I can honestly say I’ve had more fun and had a greater sense of fulfillment than I could have imagined. In just this short amount of time, the work that been accomplished by our fantastic Board member, our dedicated committee members and other volunteers, and of course, by our wonderful Executive Director, Bonnie Stanley, and her term has been remarkable. A few successes so far for the year:
- 2nd Annual Advocacy Day – A huge thanks to Scott Nelson, Keith Loveland, and the rest of the Professional Issues committee in putting together a wonderful Advocacy Day at the State Capital. Held on February 24th, more than 20 members of FPA of Minnesota participated in the event, hearing a presentation from representatives of the Minnesota Department of Commerce and connecting with State Representatives and Senators to offer the financial expertise of FPA of MN members in their work going forward.
- 9th Annual Career Day – A big thanks to Sara Kantor and the rest of Career Development committee for their efforts in hosting yet another fantastic Career Day event on February 27th which was attended by over 30 students and career changers as well as a great group of employers.
- Member Socials – A heartfelt thanks to Kathie Bortnem and the New Member committee as well as Mark Brice and NexGen committee in organizing wonderful member socials (for New Members and the NexGen committee, respectively.) The events were very well attended and provided a great opportunity for FPA members to connect, share ideas, etc.
- Pro Bono/Financial Education Efforts – A big thanks to San Asato and Lisa Stitzel and the Pro Bono and Financial Education committees for their work in educating FPA members on Pro Bono work, attending the STEM Expo attended by hundreds of sixth grade students, etc.
- Chapter Guide program – Thanks much to Brad Barinsky and the rest of the Career Development committee (as well as those that have agreed to serve as Chapter Guides) for their efforts in leading this program which is intended to connect new FPA of Members to the programs and benefits available to them and help them truly feel a part of the FPA of MN community.
What is very exciting to me is, though the first three months have been remarkable in terms of what has been accomplished, our Board and Committees continue to refine and develop our programs and initiatives to add as much value as possible for our members. I highly encourage you to keep an eye on the FPA of MN calendar and the events noted in the monthly newsletter for each of these opportunities as they are announced. Exciting times for FPA of Minnesota; I feel very grateful to be a part of it!
As always, feel free to let me or any of our Board members know of any questions, comments, or concerns that you have. We strive to “ask-listen-respond.”
Steve Gilbertson, CFP®
Accredited Investors, Inc.
Cybersecurity is Critically Important for FPA Members
Does anyone disagree?
We have ample evidence that hackers have successfully hacked banks, broker-dealers, investment advisers, governments, and corporations of all types.
Relevant laws and regulations make it clear that registered representatives and investment adviser representatives have a duty to protect customer/client data, and although the word “cybersecurity” does not appear in Rule 30 of SEC Regulation S-P, Rule 30 is clearly a cybersecurity mandate.
Regulation S-ID, Identity Theft Red Flags Rules (“Reg S-ID”), approved April 10, 2013, requires firms to develop and implement an ongoing written program to detect, prevent and mitigate identity theft in connection with any covered accounts. Identity theft is only one form of cybercrime and Reg S-ID has significant overlap with the provision of Rule 30 of Reg S-P.
Two critical aspects of cybersecurity are incident management and recovery, so it is clear that cybersecurity has significant overlap with business continuity planning.
FINRA has adopted Rule 4370 – the emergency preparedness rule. Rule 4370 requires broker-dealers to create and maintain business continuity plans appropriate to the scale and scope of their businesses, and to provide FINRA with emergency contact information.
47 states as well as the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands have adopted state data security / breach notification laws. The only states that have yet to do so are Alabama, New Mexico and South Dakota.
By the time you hear thunder, it’s too late to build the ark!
The SEC’s recent cybersecurity sweep exam letter showed the following results:
- 79% of investment advisers conduct periodic risk assessments to identify cybersecurity threats and vulnerabilities, and use these assessments to establish their cybersecurity policies and procedures.
- 32% of investment advisers require cybersecurity risk assessments of vendors with access to their firms’ networks.
- 74% of investment advisers have experienced cyber-attacks directly or through one or more of their vendors.
- 4% of investment advisers reported incidents in which a firm employee engaged in cybersecurity-related misconduct.
- 30% of investment advisers have specifically designated a "Chief Information Security Officer" for the firm.
- 21% of investment advisers maintain insurance for cybersecurity incidents.
Cybersecurity may appear to be a daunting objective; however, there are resources that may arm us with the knowledge and tools to implement a robust cybersecurity program. The SEC sweep exam letter incorporates the NIST Cybersecurity Framework (identify, protect, detect, respond, recover) and applies it to the financial services industry. The sweep letter poses twenty-eight questions which could lead a thoughtful reader towards actionable guidance on how to create and implement a cybersecurity program.
Whether we read materials from the SEC, FINRA, NIST, or seek expert help from others, we realize that an essential element of a cybersecurity program is the prioritization of resources and risks. While every firm is different, for most firms the top priority should be securing data – in other words, data backup and data encryption.
Cybersecurity touches upon human elements as well as technical elements so user awareness training is essential. Training topics should include the safe use of email, websites, mobile devices, home computers and public Wi-Fi, among others. As those in the know say, “passwords are so 20th century – multi-factor authentication is where it’s at today…”
Let’s Do Something Constructive Today To Secure Customer/Client Data
Superintendent of Financial Services for the New York State Department of Financial Services Benjamin Lawsky recently commented about his cybersecurity concerns for the agency:
“I am deeply worried that we are soon going to see a major cyber attack aimed at the financial system that is going to make all of us to shudder. Cyber hacking could represent a systemic risk to our financial markets by creating a run or panic that spills over into the broader economy. Indeed, we are concerned that within the next decade (or perhaps sooner), we will experience an Armageddon‐type cyber event that causes a significant disruption in the financial system for a period of time—what some have termed a ‘cyber 9/11'."
New Member Committee Needs Your Help-Become A Valued Chapter Guide
The New Member Committee is tasked with mission of recruitment and integration of new members in the first year of membership. As a way to accomplish our mission, we created the Chapter Guide Program. It is a volunteer program to help first year members become quickly acclimated to all things FPA MN. Volunteers are asked to contact their assigned new members once a month and offer to help them with whatever they need to make the first year a great experience. We need volunteers and we ask you to consider helping great chapter. Below is the list of the New Member Committee members. Please call or email to find out more about the Chapter Guide Program.
Kathie Bortnem - 877-867-7293
Brad Barinsky - 773-251-0969
Michelle Campbell - 651-714-0323
Craig Dahl - 612-812-7108
Brad Frane - 612-281-6217
Chad Halbur - 866-200-6528
Craig Johnson - 651-605-2751
Patti Mazzara - 612-316-2905
John O’Keefe - 952-225-0315
Joyce Sealine - 952-905-2244
John Walsh - 541-357-0168
Don’t miss the next First Year Member Social!
April is Financial Capability Month
The month of April is Financial Capability Month (previously proclaimed Financial Literacy Month). There are numerous events scheduled throughout the country during the month focusing on financial literacy. On April 30th, Jump$tart will be hosting its annual event at the Federal Reserve Bank of Minneapolis. This year’s event features Nicole Middendorf of Prosperwell Financial. She will present “Facing Your Financial Fears” designed to help people learn steps for successfully pursuing your, your family’s, and children’s financial goals. You can register for the event here.
FPA Members Collaborate with BestPrep on eMentors Program
The Financial Education Committee is continuing to collaborate with BestPrep on a number of programs. Many of our members have participated in the eMentors program, BestPrep’s email mentoring partnership between professionals and students. Although participation among FPA members has declined recently, the value received by students has continued to be strong. According to BestPrep, 91% of students who participated in the program FPA was involved with are more likely to save money. One student stated “It was a very different way to learn things. Instead of a teacher telling me what I needed to know, it was a person who deals with people and their money every single day, and that was pretty neat.”
FPA 2015 Residency Program
The highly acclaimed Financial Planning Residency Program builds experience in real financial planning scenarios and establishes mentor relationships with preeminent thought leaders in the profession for new certified financial planners or soon-to-be CFP® professionals. Additionally, partipants are eligible for 28 hours of CFP® continuing education credits.
FPAMN K’Nex: How to Get More Results From Your Social Media Efforts
Your NexGen committee aims to bring two broad benefits to members in 2015; a community for NexGen aged members (36 and under) and a broader range of educational topics, including practice management and other “non-CE” content. While NexGen’s social networking events are limited to NexGen members, K’Nex events aim to connect both younger and more experienced members together through interesting educational content and an opportunity to network after the event. We are pleased to announce the first of a series of educational N’Nex events throughout 2015 and invite all members to join. This first event has been made possible through close collaboration with your Public Relations committee and will help you get results from social media.
FPAMN K’Nex presents: How to Get More Results From Your Social Media Efforts
May 27, 2015 - 5:00-6:30 pm
Pittsburgh Blue Steakhouse
3220 West 70th St.
Edina, MN 55435
By now most of us have come to the realization that social media is here to stay in the financial services community. But what does that mean to you and your practice? How much time should you be spending on your social media efforts? Which social media channels are worth the effort? During this event, FPA board member and marketing professional, Kristy Gusick will be sharing with you some of the latest tips on how to get the most ‘return on your investment’ from your social media efforts. She will also be sharing case studies from financial services firms who have successfully integrated social media into their practice. Join us at this event to learn how to learn how to improve your social media engagement and ROI.
Recap: March Chapter Meeting
Charitable Planning Strategies, Words That Work
Joint Meeting with Planned Giving Professionals
A unique joint membership meeting of FPA Minnesota and the Minnesota Planned Giving Council (MPGC) with an exceptionally effective speaker drew a large audience and generated a frenzy of networking about charitable planning among those present. Russell James III, J.D., Ph.D., CFP proved to be ideally-suited to provide two sessions on distinctly different aspects of effectively engaging in charitable planning discussions with our clients Dr. James started his professional life practicing law and specializing in Estate Planning; became a Development Officer (like approximately 40% of those in attendance), then a college president (aka “Chief Fundraiser”) and then Director of Graduate Studies in Charitable Planning in the largest college Financial Planning program in the country. He has a passion for his subject matter and this audience found him engaging if not captivating.
Hour I: Time raced by as Dr. James, supported by excellent notes, PowerPoint and examples, led us through his “Top 10 Charitable Planning Strategies for Financial Advisors”. It is likely that every person in the room understood the benefits of using appreciated assets for gifting to charities. When Dr. James described his Strategy #1 (NEVER GIVE CASH) and used example after example of how to coach our clients on the benefits, this idea took on a whole different meaning and got all of us thinking about conversations we should be having with clients. And so it went through nine more solid planning strategies with effective examples and ideas on how to discuss the implementation of charitable planning strategies with our clients.
Hour II, “Words that Work: The phrases that encourage planned giving” provided more food for thought and made it clear why Dr. James chairs a Graduate Studies in Charitable Planning program. He is an acclaimed presenter at both Financial Planning as well as Planned Giving Conferences.
We learned about “Philanthropy as a synthetic family; a social act using the mechanisms of family bonding”, a concept which is supported by scientific research showing an increase in “oxytocin” a family bonding hormone, in the brain when we are engaged in the act of making gifts. The effectiveness of life stories and “tribute bequests” and the clear, positive impact of mentioning tax deductions when suggesting a gifting opportunity. We were reminded of the need to recognize that certain words (like “estate planning” or “life” insurance) can be real impediments in communicating effectively and that creativity is required i.e. “the oblique focus group”. This session was filled with data from academic surveys; all used very effectively. Dr. James will be presenting at the 2016 Minnesota Planned Giving Conference in the Twin Cities. He offered additional materials with an e-mail request to Russell.email@example.com.
Pro Bono Committee Update
Join us on April 23rd immediately preceding the Monthly Chapter meeting for a 1-hour financial planning workshop (CFP CE pending) on working with military personnel and families to provide financial counseling. Scheduled presenter is John Bergstrom, CFP®, ChFC, CLU, CDFA, a fellow member of our chapter and Lt. Commander in the U.S. Navy (Reserves). Seating is limited. Select this Optional Item during your registration. 1:15 – 2:15 pm – Somerset Room, Golden Valley Country Club.
Collaboration with CBOs (Community Based Organizations) continues to be in the works. Some, like Jump$tart coalition, Habitat for Humanity, etc. are in re-evaluation/hiatus mode. Prepare + Prosper is in the process of reformulating delivery of financial consulting to its clients. Tapestry and Tubman are focused on group presentations with Financial Education Committee. College Possible, a new CBO relationship, is finalizing a date for a mini Financial Planning Day for its AmeriCorp volunteers. We may need 20 planner volunteers for 15-minute one-on-one sessions – watch for future announcements.
One-on-one, ad hoc financial consulting inquiries through our chapter continue to average 2 per month. Pro Bono Planner Map has made it easier to identify volunteer planners closest to pro bono client inquiries.
Pro Bono Committee meetings are open to all members. If you are interested in participating, please reach out to me. Our next committee meeting is Thursday, May 14.
Mark your calendar for this summer’s Pro Bono Workshop – Special Needs Planning and Accounting, July 21, 2:15 -3:15 pm. The FPA Pro Bono Impact Report is out! Have you seen it? Click here to see the great work that has been done. Some terrific numbers. 2014 FPA Pro Bono Impact