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Advisors flock to steamy South Fla. for Pershing's conference and get a glimpse of web-based NetX360

Keynote speaker Henry Paulson talks about the most important moves of the financial crisis, says he couldn't have saved Lehman, and acknowledges he may never be widely recognized for averting disaster

Thursday, June 10, 2010 – 6:04 AM by Elizabeth MacBride
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Rich Brueckner: FINRA would be a logical place to look for help regulating RIAs.

Elizabeth’s note: Advisors travel to the big custodians’ conferences for practical purposes: They look to establish relationships and get ideas from their peers about ways to grow, and they seek to find out more about what their custodians can do for them. Few advisors come to a conference to hear a particular speaker. But those big names do play a critical role in helping to set the tone of a gathering. On Pershing’s first day, a trio of elder statesman — Henry Paulson, David Gergen and Richard Brueckner — each offered a down-to-earth combination of humility, humor and perspective.
Asked about his toughest moments during the financial crisis, Paulson displayed a distinctly human side. He said that he never had any trouble falling asleep. But “I have old man’s disease,” he said. “I would get up at 2 a.m. to take a leak, and that’s when small problems would be magnified into large ones… and I would think and think.”
Both Brueckner and Paulson avoided the temptation to rail against financial reform; both offered assurances that the industry could adjust to the legislation being negotiated now in Washington, D.C. The number of administrations Gergen has served and observed (since Nixon), meanwhile, was a reminder that politicians are human, too – and that even those you most dislike do eventually leave office.
Mark Tibergien CEO of Pershing Advisor Solutions, echoed the theme of humility as he urged advisors and brokers to exercise good leadership skills by creating sustainable practices. “The graveyards are full of indispensable men,” he said.
Speaking of legacies, Paulson revealed his next act. He opened an office in Chicago last week and plans to devote himself to his long-time interests of environmentalism and conservation.

The place to be at the 2010 Pershing Insite conference was around the seven huge computer monitors set up to display various screens of NetX360, Pershing’s year-old industry-shaking technology platform. See: Pershing clarifies how it’s the un-Schwab and a far-flung crowd pours in to South Florida

Near windows overlooking the steamy South Florida beach, advisors and brokers who have already shifted to NetX360 and some who are considering it looked on as Pershing employees demonstrated, among other things, the new web-based version, expected to roll out by the end of summer.

“It’s a good platform,” said Belgis Perez, a representative from Panama-based Mundial Asset Management, who said his firm was already using it and is looking forward to the web-based version.

The conference, one of the industry’s largest, is expected to draw about 1,100 attendees from Wed-Fri. Many attendees came with specific goals in mind, looking for practical takeaways about growing their firms, with technology, fixed-income strategies and retirement planning among the topics that were top-of-mind.

Bob Delbuono Jr., who manages $25 million at his Fairfield, Ct.-based financial planning practice, was there to get some answers from Pershing staff about how to better integrate the financial planning software, Naviplan, with NetX360. One of the issues that Pershing executives have said the company plans to address in the next few months is third-party software integration.

“One guy is from Canada, one guy is from New Jersey, I’m from Connecticut,” he said. “Put us all in a room and we can get it figured out in 20 minutes.”

Yet, there were deeper undercurrents flowing in the capacious meeting rooms. Reminders of the fragile world economy pressed in on the conference. Richard Brueckner, CEO of Pershing, played the role of elder statesman as he spoke to the crowd, looking over his glasses as he spoke. Brueckner has been a long-time player in SIFMA and sits on the board of governors at FINRA. He said he expected that Congress would pass legislation authorizing a study of combining regulation of brokers and advisors, and that he hopes that the end solution will be an efficient system of regulation that protects consumers.

In an earlier lunch with RIABiz, he noted both that the SEC has acknowledged that it lacks the resources to effectively regulate advisors, and that FINRA has a long history of operating with regulator units that oversee particular segments of the industry.

“I hope we can all agree that there needs to be a rational solution,” Brueckner said. “Oversight needs to be addressed.”

While acknowledging the headwinds of the global economy, he tossed out a few of Pershing parent BNY Mellon’s qualifications as a $22 trillion custodian, including that it is the highest-rated banking institution in the nation and has a Tier 1 capital rating. He also mentioned BNY Mellon’s recent acquisition of PNC Global Investment Servicing.

“This is my 40th year in the securities business,” he said. “I wanted to be at the center of the action. And I have been.”

After Brueckner’s short speech, Henry Paulson, the former secretary of the Treasury, continued the mission he seems to have set himself lately. With a new book, On the Brink, which Pershing gave out to all conference attendees, and in a series of public discussions, Paulson is countering criticism for the financial bailout.

It may be an impossible task. Though he argued that his actions – especially the conversions of Fannie Mae and Freddie Mac — averted a global meltdown of unimaginable proportions, he acknowledged that he had failed to convince the American public that the bailouts saved Main Street as much as Wall Street.

He said that Rep. Barney Frank told him he’d never be able to prove a negative – that things would have been worse had the Bush administration not taken its unprecedented actions in the fall of 2008.

Lehman and the law

Paulson specifically countered criticism that letting Lehman Bros. fail was a mistake, saying that at the time, lacking a buyer for the firm or anything solid on its balance sheet with which to lend against, the government had no choice.

“The law is the law,” he said.

Paulson found a warm reception in the Pershing crowd, which applauded his service. He said that, having turned down the Treasury job twice, he accepted it on the third offer because he’d been “blessed by this country.

“I didn’t want to look back five or 10 years later and regret not having served,” he said.

Later, he said he believes he was in the right place at the right time.

He also discussed financial reform, saying that it was critical and that, though Wall Street may wring its hands, the industry would be able to adapt to the changes in the Senate bill.

Advisors in search of answers

Paul Huebner, a managing member of Michigan-based Pointe Capital Management, made up of former UBS brokers who left that firm with several hundred million of assets, said he admired Paulson’s deliberate style and noted that he was one of the few people in the nation who was able to understand the complexities of the crisis.

On his way to a PowerHour session titled “RIA Solutions,” – Huebner said his main purpose at the conference was to gather ideas for practice management solutions.

Pointe Capital is about three months old. “It’s like being a baby,” Huebner said with a laugh. He attributed some of his firm’s comfort level with Pershing to its focus on larger advisors.

The average size of a Pershing RIA is $150 million, according to Pershing Advisors Solutions CEO Mark Tibergien; the average size of a new RIA is $250 million.

Huebner spoke highly of Tibergien’s presentation, “When followers lead,” in which Tibergien urged advisors to train the people in their firms to step into their leaders’ shoes.

Kevin B. McGann, chief operations office at Miami-based Meg Green & Associates, which as $600 million in AUM, said his purpose in coming to the conference was to get wind of new products and clearing technologies likely to be offered to Meg Green & Associates by the firms broker-dealer, Royal Alliance, which clears through Pershing.

Hints of future plans

At lunch with RIABiz, Pershing executives including Brueckner, Tibergien and Jim Crowley a, Pershing managing director who oversees the National Customers group, let slip a few of the products under development, including a retirement platform to help its advisors and registered reps in the 401(k) business. The company is also growing a series of sessions to help advisors with portfolio strategies during a turbulent market. And Tibergien mentioned that the company may begin inviting conferences to select advisors, similar to TD’s Elite conference, also covered on RIABiz today.

Brian Shea, Pershing’s COO, is expected to talk more about Pershing’s plans for the future at the 8:30 a.m. session today.

Final note: RIABiz plans a slide show of the conference. If you have photos, please send them to elizabeth@riabiz.com. If you can, please include the names of the people pictured.

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Top Executive: Mark Tibergien

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