Behavioral Finance and Fiduciary Discipline

Transcription

1 ABA BRIEFING PARTICIPANT S GUIDE Behavioral Finance and Fiduciary Discipline Wednesday, October 12, 2016 Eastern Time 2:00 p.m. 3:30 p.m. Central Time 1:00 p.m. 2:30 p.m. Mountain Time 12:00 p.m. 1:30p.m. Pacific Time 11:00 a.m. 12:30 p.m.

2 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET DISCLAIMER This Briefing will be recorded with permission and is furnished for informational use only. Neither the speakers, contributors nor ABA is engaged in rendering legal nor other expert professional services, for which outside competent professionals should be sought. All statements and opinions contained herein are the sole opinion of the speakers and subject to change without notice. Receipt of this information constitutes your acceptance of these terms and conditions. COPYRIGHT NOTICE USE OF ACCESS CREDENTIALS 2016 by American Bankers Association. All rights reserved. Each registration entitles one registrant a single connection to the Briefing by Internet and/or telephone from one room where an unlimited number of participants can be present. Providing access credentials to another for their use, using access credentials more than once, or any simultaneous or delayed transmission, broadcast, re-transmission or re-broadcast of this event to additional sites/rooms by any means (including but not limited to the use of telephone conference services or a conference bridge, whether external or owned by the registrant) or recording is a violation of U.S. copyright law and is strictly prohibited. Please call BANKERS if you have any questions about this resource or ABA membership.

3 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET Table of Contents TABLE OF CONTENTS... II SPEAKER & ABA STAFF LISTING... III SPEAKER BIOGRAPHY... IV PROGRAM OUTLINE... V CONTINUING EDUCATION CREDITS INFORMATION... VI CPA SIGN-IN/SIGN-OUT SHEET... VII INSTRUCTIONS FOR RECEIVING CERTIFICATES OF COMPLETION.. VIII CFP INSTRUCTIONS AND SIGN-IN SHEET... IX PROGRAM INFORMATION... ENCLOSED PLEASE READ ALL ENCLOSED MATERIAL PRIOR TO BRIEFING. THANK YOU. The Evaluation Survey Questionnaire is available online. Please complete and submit the questionnaire at: Thank you for your feedback. II

4 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET Speaker and ABA Staff Listing Speaker Ronald M. Florance, CFA Advisory Board Member Robertson Stephens Advisors RMF Consulting, LLC Scottsdale, AZ Florance ABA Briefing Staff Cari Hearn Senior Manager (202) Linda M. Shepard Senior Manager (202) American Bankers Association 1120 Connecticut Avenue, NW Washington, DC III

5 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET RONALD M. FLORANCE, CFA Speaker Biography Ron Florance is a private investment consultant and financial educator with over 30 years of experience in the investment field. Ron is the founder of RMF Consulting LLC., and he is the Senior Strategic Advisor and member of the Advisory Board of Robertson Stephens. He retired from Wells Fargo where he was the Deputy Chief Investment Officer for Wealth Management. At Wells Fargo, Ron was responsible for developing key investment strategy guidance for high-net-worth individuals, families and philanthropic entities. His prior corporate experience included roles at The Vanguard Group, Wells Fargo Nikko Investment Advisors, and The Private Bank at Bank of America. Ron s expertise includes Global Asset Allocation, Equity Research, Fixed Income Research and portfolio design and management. He earned his Bachelor of Science degree in Applied Mathematics and Economics from Brown University and was awarded a Chartered Financial Analyst designation in Ron is a frequent speaker at industry conferences and is quoted nationally and internationally both in print and broadcast media. Ron meets with individuals, foundations, and endowments to evaluate investment needs and strategies. IV

6 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET Program Outline TIMES SESSION & SPEAKERS 2:00 2:03 p.m. ET Introduction Overview of Program, Welcome Introduction of Speakers 1Source International 2:03 2:20 p.m. The Academic Approach Ron Florance, CFA 2:20 2:35 p.m. The Investor Realities 2:35 2:40 p.m. Questions and Answers 2:40 2:50 p.m. Balancing Fiduciary and Behavioral concepts 2:50 2:55 p.m. Questions and Answers 2:55 3:20 p.m. Review of 2016 Forecasts and Themes 3:20 3:30 p.m. Questions & Answers, Wrap-up V

7 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET Continuing Education Credits Information The Institute of Certified Bankers (ICB) is dedicated to promoting the highest standards of performance and ethics within the financial services industry. The ABA Briefing, Behavioral Finance and Fiduciary Discipline has been approved for 2.0 continuing education credits towards the CRSP and CTFA (FID) designations. To claim these continuing education credits, ICB members should visit the Member Services page of the ICB Website at You will need your member ID and password to access your personal information. If you have difficulty accessing the Website and/or do not recall your member ID and password, please contact ICB at or American Bankers Association is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: CPE credit hours (Finance) will be awarded for attending this group-live Briefing. Participants eligible to receive CPE credits must sign in and out of the group-live Briefing on the CPA Required Sign-in/Sign-out Sheet included in these handout materials. A CPA/CPE Certificate of Completion Request Form also must be completed online. See enclosed instructions. The Certified Financial Planners has granted 1.5 credits for this briefing. See enclosed instructions for submission of continuing education credits. Continuing Legal Education Credits This ABA Briefing is not pre-approved for continuing legal education (CLE) credits. However, it may be possible to work with your state bar to obtain these credits. Many states will approve telephone/ audio programs for CLE credits; some states require proof of attendance and some require application fees. Please contact your state bar for specific requirements and submission instructions. VI

8 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET CPA Required Sign-in/Sign-out Sheet CPAs may receive up to 1.5 hours of Continuing Professional Education (CPE) credit for participating in this group-live Briefing. INSTRUCTIONS: 1. Each participating CPA must sign-in when he/she enters the room and sign-out when he/she leaves the room. 2. Name and signature must be legible for validation of attendance purposes as required by NASBA. 3. Unscheduled breaks must be noted in the space provided. 4. Each participating CPA must complete, online a CPA/CPE Certificate of Completion Request Form (instructions enclosed). 5. Individuals who do not complete both forms will not receive their Certificate of Completion. This CPA/CPE Sign-in/Sign-out Sheet must be scanned and uploaded with the Request for Certificate of Completion form in order to receive your certificate of completion. FULL NAME (PLEASE PRINT LEGIBLY) SIGNATURE TIME IN TIME OUT UNSCHEDULED BREAKS American Bankers Association is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: Please note: CPE credits are ONLY awarded to those who have listened to the live broadcast of this Briefing. VII

9 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET Instructions for Receiving Certificates of Completion CPA/CPE Certificate of Completion Submission of a sign-in/sign-out sheet AND electronic request for a Certificate of Completion are required for the validation process to be completed. NASBA requires ABA to validate your attendance BEFORE you will receive your Certificate of Completion. 1. COMPLETE a CPA / CPE Certificate of Completion Request Form online at: 2. SCAN and UPLOAD the completed CPA / CPE Required Sign-in/Sign-out Sheet (enclosed) and include it with the Request for CPE / CPA Certificate of Compliance form found in Step SUBMIT completed Request form and Sign-in/out Sheet 4. ABA staff will VALIDATE your attendance upon receipt of the Certificate of Completion Request Form and Sign-in/out Sheet. 5. A personalized certificate of completion will be ed to you within 10 business days once your attendance is validated. 6. QUESTIONS about your certificate of completion? Contact us at briefingcertificates@aba.com General / Participant Certificate of Completion 1. REQUEST a General / Participant Certificate of Completion at: 2. A personalized certificate of attendance will be ed to you within 10 days of your request. 3. QUESTIONS about your certificate of completion? Contact us at briefingcertificates@aba.com VIII

10 American Bankers Association Behavioral Finance and Fiduciary Discipline Wednesday, October 12, :00 p.m. 3:30 p.m. ET ATTENTION: PROCESS FOR CFPs Certified Financial Planner Sign-In Sheet Program ID #: The Certified Financial Planners (CFP) Board has granted 1.5 credits for this program. The participant MUST MAIL the sign-in sheet AND a copy of the CFP approved Certificate of Completion (Request for Certificate of Completion instructions found below) in order to receive continuing education credits for attending this live program. Please mail both the sign-in sheet and Certificate of Completion to: Barbara Swan, American Bankers Association, 1120 Connecticut Ave., NW, Ste. 600, Washington, DC Please note: CFP credits are ONLY awarded to those who have listened to the live broadcast of this Briefing. Last Name Please Print LEGIBLY First Name Middle Name SSN Last four digits only xxx-xx- CFP Registrant ID SMITH JOHN WILLIAM XXX-XX CFP Certificate of Completion Instructions 1. REQUEST a CFP Certificate of Completion via the online Certificate Request Form at: 2. A personalized certificate of completion will be ed to you within 10 days of your request. 3. MAIL CFP Sign-in Sheet AND a copy of the Certificate of Completion to the address found above QUESTIONS about your CFP Certificate of Completion? Contact us at briefingcertificates@aba.com ABA offers many opportunities for you to earn CFP credits. Please complete the form found at so we can add you to promotions and keep you informed. IX

11 Behavioral Finance & Fiduciary Discipline Ron Florance, CFA RMF Consulting, LLC Robertson Stephen Advisory Board member ABA Briefing/Webinar October 12, :00 3:30 p.m. Disclaimer This Briefing will be recorded with permission and is furnished for informational use only. Neither the speakers, contributors nor ABA is engaged in rendering legal nor other expert professional services, for which outside competent professionals should be sought. All statements and opinions contained herein are the sole opinion of the speakers and subject to change without notice. Receipt of this information constitutes your acceptance of these terms and conditions. aba.com BANKERS 2 1

12 Today s Agenda The Academic Approach The Investor Realities Balancing Fiduciary and Behavioral concepts Review of 2016 Forecasts and Themes 3 The Academic Approach 4 2

13 The Theoretical Investor All investors are risk adverse Risk must be rewarded Reward comes in the form of return Maximize return for each level of risk 5 The History of Modern Portfolio Theory Market Efficiency Random Walk: Prices between intervals are unrelated, hence unpredictable True Value: Prices reflect all information as consensus of all market participants No opportunity to systematically exploit market inefficiencies 6 3

14 The Efficient Markets Hypothesis Because market prices are set by the interactions of many knowledgeable players, prices are fair and are based on the fundamental investment attributes of each company. Since by definition nobody knows new information that has not yet been made public (except insiders, who are not supposed to trade on that information), it is impossible for anyone to have an information edge that consistently beats the market. 7 The Efficient Frontier The Optimal Portfolios Sample Optimal Portfolio Reward Sample Client Portfolio Risk 8 4

15 What Makes Investors Happy? Indifference curves Equal Utility of Return Compensating Risk I 3 I 2 Reward I 1 Risk 9 How Does This All Work? Optimal Portfolio On Efficient Frontier On Highest Indifference Curve That is Tangent to Efficient Frontier I 3 I 2 CAPM Line Reward I 1 efficient frontier Risk Optimal Portfolio 10 5

16 Real Life vs. Academic Finance Theory Real investors are not rational all the time Real investors are not always risk-averse Real investors do not always have the same return expectations There are taxes and other costs associated with investing and real investors have reactions to those costs Real investors generally do not define risk as variability they define it as loss Real investors do not have an infinite time horizon Interim returns not just long-term returns matter to real investors 11 What is Reward to an Investor? Total Return Cash flow Net Worth goal have at least $1 million Paying as little tax as possible minimizing taxes vs. maximizing wealth Doing better than my neighbor 12 6

17 How Does Your Client Define Risk? Risk of losing money Downside Risk Risk of under performing benchmark Benchmark Risk Risk of not achieving wealth goal Wealth Risk Risk of unpredictability Volatility Risk, Uncertainty Risk that it is all coming to an end Something else that we don t anticipate Clients are loss averse rather than risk averse 13 Investor Realities 14 7

18 Questions and Answers If you are participating on the Web: Enter your Question in the Box Below and Press ENTER / SUBMIT. If you are participating by Phone: your Question to: aba@1source-intl.net OR Press *1 on your Telephone Keypad aba.com1-800-bankers 15 How do you feel about money? EXPERT SCARED PUMPED WORRIED FEAR VS. GREED TAKEN CARE OF STUPID GUILTY IN CONTROL ASHAMED NEVER THINK ABOUT IT 16 8

19 How do you feel about the market? 17 What is Behavioral Finance? Behavioral finance is the study of how psychology affects financial behavior. 18 9

20 The Basic Problem The basic problem is that investors want to trust their intuition instead of focusing on critical thinking. This problem manifests itself when the client is forced to make a decision such as when, where, or how much to invest. Stress causes even worse decisions. 19 Intuition vs. Critical Thinking An investor looking at this chart may go with his or her gut (intuition) and say that he or she only wants large and small cap stocks because the returns on international stocks are too low However, a little critical thinking and investigation would show that in some periods international does better and always diversifies! 20 10

21 NET WORTH SELF-WORTH 21 Task of Advisors The task of advisors is to.. Focus on CRITICAL THINKING Help investors understand the pitfalls of relying on INTUITION Recognize situations where investors are likely to make significant errors due to intuition To be successful, advisors must understand client behavior! 22 11

22 Risk and Risk Aversion EXAMPLE ONE: You have a choice between a 100% chance at $90,000 or a 10% chance at $0 and a 90% chance at $100,000. Which would you take? 23 Risk and Risk Aversion EXAMPLE ONE: Given a choice between a 100% chance at $90,000 or a 10% chance at $0 and a 90% chance at $100,000 studies have shown that most investors will take the sure bet even though, statistically speaking, the expected returns are the same under both scenarios

23 Risk and Risk Aversion EXAMPLE TWO: You have a choice between a 100% chance at losing $90,000 or a 10% chance of losing $0 and a 90% chance of losing $100,000. Which would you take? 25 Risk and Risk Aversion EXAMPLE TWO: Given a choice between a 100% chance at losing $90,000 or a 10% chance of losing $0 and a 90% chance of losing $100,000 studies have shown that most investors will now choose the latter. Why? When it comes to losing, clients will (unknowingly) pursue risky behavior to avoid loss. Both expected returns are the same, but the latter has more risk because of the variability of outcomes

24 Biases and Investment Behavior Heuristics-driven biases Practical methodology May not be optimal, but is sufficient Trial and error Frame-dependence biases Not all realities look the same depending on where you are Theory of relativity Historical perspective 27 Heuristics-driven Biases Availability bias If more information is available, it must be a good thing Home country bias Gambler s fallacy Finding patterns where none exist Tossing a coin and getting 10 heads in a row, what s next? Overconfidence and expert judgment Confusing smarter than with luckier than 28 14

25 Heuristics-driven Biases Anchoring First piece of information is the most important Setting levels of return expectations when I get back to even, then I will. Aversion to ambiguity Prefer known over unknown Known loss over unknown gain 29 Frame-dependence Biases Loss aversion Preference to avoid loss over acquiring gain The pain of losing a dollar is greater then the joy of making one Mental accounting Buckets of money for purposes Source of wealth, found, earned, inherited Type of currency, cash, casino chips, credit card 30 15

26 Frame-dependence Biases Money illusion Real vs. nominal view of money Purchasing power A million dollars $3.99 vs. $ Behavioral Finance Cheat Sheet Source: Scott Welch, Unconsrainedthought.com, Dynasty Financil Partners 32 16

27 Balancing Fiduciary and Behavioral Concepts 33 Questions and Answers If you are participating on the Web: Enter your Question in the Box Below and Press ENTER / SUBMIT. If you are participating by Phone: your Question to: aba@1source-intl.net OR Press *1 on your Telephone Keypad aba.com1-800-bankers 34 17

28 Fiduciary Responsibility Individual savers are even less likely than trustees to make sensible investment decisions. They tend to be motivated by greed and fear, which the fund-management industry plays on. Because its customers have a limited understanding of financial products, the industry has always faced a dilemma. Should it sell people what they think they want, or should it offer them the conservative investments that may be more appropriate for their future needs? From the Economist A Survey of Asset Management 35 Ethical Standard for Financial Services Suitability Standard Regulator: FINRA, Financial Industry Regulatory Authority Regulated: Broker-Dealers Reasonably believe that any recommendations made are suitable for clients Fiduciary Standard Regulator: SEC, Security and Exchange Commission, or State Regulators Regulated: Investment Advisors, RIA s Must act in the best interest of his or her client Source: Investopedia,

29 Suitability Standard Know your customer customer s financial status customer s tax status customer s investment objectives other information used or considered to be reasonable by such member or registered representative in making recommendations to the customer Know the security Risks Fees Tax The investment is appropriate in terms of an investor's willingness and ability (personal circumstances) to take on a certain level of risk. 37 Suitability Standard Broker can place his or her interests above that of the client Broker's duty is to the broker-dealer he or she works for, not necessarily the client served The need to disclose potential conflicts of interest is not as strict a requirement Examples Index fund Annuity Robo Advisor 38 19

30 Fiduciary Standard Know your customer customer s financial status customer s tax status customer s investment objectives other information used or considered to be reasonable by such member or registered representative in making recommendations to the customer Know the security Risks Fees Tax The Fiduciary Standard requires that advisors put their client's interests above their own 39 Fiduciary Standard Must choose MOST appropriate/suitable investment Must disclose conflict of interest Cannot buy securities for his or her account prior to buying them for a client Prohibited from making trades that may result in higher commissions for the advisor or the investment firm Examples Proprietary products Dealer transactions Hitting sales targets 40 20

31 Ethical Standard for Financial Services We must treat others as we wish others to treat us 41 Not Traditional Asset Allocation Catastrophe 10% Volatility 10% Liquidity 15% Growth 25% Inflation 15% Income 25% 42 21

32 Growth Segment Helps to provide asset growth for future financial needs Technology Sector 10% Biotech Sector 10% Frontier Markets 5% Silver 5% 50% Global Equity High Yield Bonds 20% 43 Helps to maintain cash flow for lifestyle expenses Income Segment REIT s 10% Utilities 5% 30% Investment Grade Bonds Dividend Equity 30% 15% High Yield Bonds 10% Non-US Bonds 44 22

33 Liquidity Segment Helps to maintain liquidity for opportunistic investments Developed Mkts Equity 15% 10% Short Term Bonds 25% Investment Grade Bonds Large Cap Equity 35% 15% Developed Mkts Bonds 45 Inflation Segment Helps to protect against the corrosive impact of inflation Commodities 20% 15% Short-Intermediate Bonds Gold 5% REIT s 5% 25% TIPS 30% Domestic Equity 46 23

34 Volatility Segment Helps to maintain portfolio value during heighten market volatility 10% Short Term Bonds Min Vol Strategy 30% 35% Investment Grade Bonds Target Date Funds 25% 47 Catastrophe Segment Helps to maintain value and liquidity in market disruptions Silver 15% 30% Ultra Short Term Bonds Gold 20% 35% Investment Grade Bonds 48 24

35 Balancing Behavioral and Fiduciary 1 Liquidity Keeps You on Track 2 Match time horizons with investments 3 Aim for consistent returns 4 Manage risk beyond volatility 5 Rebalancing makes Asset Allocation work 6 It s a big world 49 Liquidity keeps you on track 1 Adequate liquidity keeps your investment plan on track and provides flexibility. The market can stay irrational longer than you can stay solvent. ~ John Maynard Keynes Source: The Life of John Maynard Keynes, R.F. Harrod,

36 Match time horizon with investments 2 Uncertainty about returns generally diminishes over time. 51 Aim for Consistent Returns 3 Volatility does matter in the long run. Performance of Three Hypothetical Portfolios $1,500,000 $1,400,000 $1,300,000 $1,200,000 Portfolio A Portfolio B Portfolio C $1,100,000 $1,000,000 $900,000 $800,000 $700,000 Initial Value Year 1 Year 2 Year 3 Portfolio A Portfolio B Portfolio C Year 1 10% 5% 20% Year 2 10% -25% 20% Year 3 10% 50% -10% Total Arithmetic Return 30% 30% 30% Ending Value $1,331,000 $1,181,250 $1,296,

37 Manage Risk Beyond Volatility 4 Goals based risk perspectives: Risk of losing money Risk of not having enough money Risk of missing out Risk of personal/family security 53 Rebalancing makes Asset Allocation work 5 Not rebalancing can cost a portfolio dearly

38 IT S A BIG WORLD 6 Are you invested by geography or demography. Each color represents 1 billion people IT S A BIG WORLD 6 Are you invested by geography or demography. 28

39 2106 FORECASTS AND THEMES DOMESTIC EQUITIES 2016 has been a bumpy ride Source: Bloomberg 29

40 INTERNATIONAL EQUITIES Seeing improvement, even in parts of Europe Source: Bloomberg INTEREST RATES Aren t they suppose to be going up? Source: US Department of the Treasury 30

41 COMMODITIES Continue to struggle, not helping inflation Source: Bloomberg US DOLLAR Stabilizing in second half of year Source: FX Street 31

42 2016 FORECASTS Low expectation can lead to positive surprises Federal Reserve makes 2 interest hikes in 2016 to 0.75% Long end of the curve won t behave. US Dollar stabilizes Helps US multinationals and commodities US GDP growth doesn t surprise anybody Global GDP growth does surprise to the upside, but not from China US Equity earnings growth: 5.5% You ll be happy with that as a total return Volatility across all asset classes will continue Active rebalancing will be the key to successful asset allocation 2016 POLITICS 32

43 2016 THEMES 1 Interest rates rising by 50bp 2 The US economy will survive rate hikes, barely 3 Election will be interesting, but not impact markets 4 Energy prices will stabilize near $40, but painfully 5 The US dollar holds steady 6 The Environment takes center stage Questions and Answers If you are participating on the Web: Enter your Question in the Box Below and Press ENTER / SUBMIT. If you are participating by Phone: your Question to: aba@1source-intl.net OR Press *1 on your Telephone Keypad aba.com1-800-bankers 66 33

44 Fiduciary and Trust Activities Workbook 2016 Wealth Advisory and Personal Trust Series Financial Planning Workbook 2016 Wealth Advisory and Personal Trust Series Tax Law and Tax Planning Workbook Investment Management Workbook 2016 Wealth Advisory and Personal Trust Series 2016 Wealth Advisory and Personal Trust Series Wealth Advisory and Personal Trust Series The 2016 edition of ABA s Wealth Advisory and Personal Trust Series has been updated to reflect changes in regs that impact the trust industry. Each workbook is a comprehensive resource on estate planning, transfer tax, fiduciary liability, investment and retirement planning solutions. The workbooks follow and reinforce the knowledge areas tested on the Certified Trust and Financial Advisor (CTFA) Certification exam. Titles include: Fiduciary and Trust Activities Workbook Financial Planning Workbook Tax Law and Tax Planning Workbook Investment Management Workbook Purchase the series or individual workbooks; available in printed and electronic formats. Each workbook: $165 Member/$225 Nonmember Complete series: $575 Member/$775 Nonmember Available Now aba.com/wapts

45 2017 Trust and Estate Planning Briefing/Webcast Series The American Bankers Association announces the 2017 Trust and Estate Planning Briefing Series. Our featured speakers, Thomas W. Abendroth, partner, Schiff Hardin LLP and Charles D. Fox IV, partner, McGuireWoods LLP are nationallyrecognized trust and estate attorneys and tenured teachers from the ABA Trust Schools. They will provide you and your staff with critical information on estate planning and trust administration topics. This series provides you with an excellent business development opportunity; invite outside counsel to attend these informative programs at your location. Reserve 1:00 3:00 p.m. ET on these dates In order to provide listeners with timely information, the presenters reserve the right to alter the content or emphasis of the programs. Current State of Asset Protection February 2, CTFA (FP); 2.5 CISP; 2.5 CRSP; 2.0 CPEs for CPAs (Taxes) Our clients continue to focus, with justification, on protection of their wealth from liabilities arising out of business dealings and litigation. This briefing will provide an update on developments and the most appropriate planning techniques to use for asset protection. Topics to be discussed are: Different types of protection Joint tenancy and tenancy by the entireties Third party gifts and trusts State exemptions Insurance Retirement plans and IRAs Fraudulent conveyances Family limited partnerships and limited liability companies Offshore and domestic asset protection trusts The Section 2704 Valuation Rules and their Impact on Advanced Estate Planning Techniques March 2, CTFA (TAX); 2.5 CISP; 2.5 CRSP; 2.0 CPEs for CPAs (Taxes) The currently proposed valuation regulations under Section 2704 could have a significant impact on the economic and tax benefits of a variety of estate planning techniques. This program will discuss those techniques that could be most impacted, and the general options available for transferring wealth in an advantageous way. Topics to be discussed include: Annual exclusion gifts and applicable exclusion gifts and inflation adjustments to the amounts Installment sales GRATs Use of limited partnerships and LLCs as family investment vehicles Partnership and LLC freezes Portability Planning versus A / B planning at the first spouse s death Split interest charitable gifts Loans Trustee Liability for Investments A Review of the Current State of the Prudent Investor Rule; Delegation; and Direction April 6, CTFA (INV); 2.0 CPEs for CPAs (Regulatory Ethics) One of the most significant areas of potential fiduciary liability will be discussed in this session. The fiduciary standards applicable to trustees regarding investments and the ability to avoid liability by serving a more limited role will be the focus of this briefing. Prudent Investor Rule Diversification Waiver of Diversification Passive versus active management Delegation of investment responsibility The do s and don ts of being a directed trustee Trust protectors and trust directors Fiduciary Litigation Roundtable May 4, CTFA (FID); 2.5 CRSP; 2.0 CPEs for CPAs (Business Law) A panel of attorneys will discuss current trends in trust disputes and fiduciary litigation, and steps for minimizing a trustee s exposure to liability. Topics will include: Defenses and limitations Trustee compensation Jurisdiction and standing Construction and modification Trust distributions Settlements and arbitration Trust investments Power of attorney Planning in Illiquid Estates June 1, CTFA (FP); 2.5 CISP; 2.5 CRSP; 2.0 CPEs for CPAs (Taxes) An estate with a large interest in closely-held business or other illiquid asset provides numerous challenges from a planning and tax payment standpoint. This briefing will review the predeath and post-death planning options available to help avoid a crisis. Topics to be covered include:

46 Closely held assets and illiquidity Impact of limits on valuation discounts Lifetime planning to fund estate tax payments Deferral of payment of estate tax Post-death loan options Section 303 stock redemptions Funding marital and charitable trusts with illiquid assets Charitable issues Retirement Benefits September 7, CTFA (FP); 2.5 CISP; 2.5 CRSP; 2.0 CPEs for CPAs (Taxes) The often complex rules for payments of benefits from tax advantaged accounts, and planning options available will be reviewed during this session. Minimum distributions Payments elections after participant s death Corrective actions after participant s death Trusts as beneficiaries Qualifying for the marital deduction Advantages and disadvantages of different beneficiaries Inherited IRAs Gifts to charity A New Look at Distribution Standards October 5, CTFA (FP); 2.5 CISP; 2.5 CRSP; 2.0 CPEs for CPAs (Admin. Practice) Both trustees and beneficiaries struggle with applying the distributions standards that exist in documents. Our speakers will discuss the current law on distributions and the tax implications of standards. Topics to be included: Different distribution standards and what do they mean Tax consequences of distribution standards Ascertainable versus non-ascertainable standards Case studies of distribution standards Planning for the Elderly. What Can and Should Be Done for an Increasingly Aging Population November 2, CTFA (FP); 2.0 CPEs for CPAs (Behavioral Ethics) This session will provide a fresh look at the challenges of planning for and protecting elderly clients. Topics will include: Increasing importance of planning for elderly Avoiding abuse of elderly How to recognize undue influence Use of power of attorney and medical directives Importance of revocable trusts Planning when the client is incompetent Medicare and Medicaid planning Social Security planning Recent Developments in Estate and Trust Administration December 7, CTFA (TAX); 2.5 CISP; 2.5 CRSP; 2.0 CPEs for CPAs (Taxes) A review of recent legislation, regulatory developments, cases and rulings in the estate, gift, generation-skipping tax, fiduciary income tax, and charitable giving areas will be provided. Some of the subjects to be discussed include: Legislative and regulatory developments Gifts Valuation including the 2704 regulations Generation-skipping planning Life insurance, including split-dollar plans Charitable planning Tax Liens State Death Taxes Who Should Attend? Trust Officers Estate Planners Trust Counsel Trust Dept. Managers Wealth Managers Private Bankers Trust Tax Professionals Financial Planners CTFAs, CISPs, CRSPs, CPAs and CFPs Registration/Site License Fee PER Briefing Purchased ABA/ICB Member/Service Member: $265 Non-Member: $395 These ABA Briefings include streaming audio over the Internet, where an unlimited number of listeners can participate at one location. Audio over the telephone can be provided as an alternative. Any transmission, retransmission or publishing of these briefings is strictly prohibited. Register Today! Register online at or call BANKERS ( ). Need Continuing Education Credits? The Institute of Certified Bankers (ICB) has approved each of the 2017 programs listed for a variety of continuing education credits. These programs have also been approved for CPE credits for CPAs. This information is printed after the title of the program. In addition, these programs are being reviewed for Certified Financial Planners (CFP) Board continuing education credits. Questions? Contact Linda Shepard at lshepard@aba.com. Or, call BANKERS ( ). American Bankers Association is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional educational on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: learningmarket.org.