DECEMBER 2009
FROM thE EDItOR
Advancing the Risk Profession
PROFESSIONAL
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Risk Professional Editorial Board
Peter Tufano
Sylvan C. Coleman Professor of Financial
Management, Harvard Business School
Aaron Brown
Risk Manager
AQR Capital Management
Tim Davies
Director for Risk
Lloyds TSB Bank
Mike Gorham
Director, I T Center for Financial Markets
Stuart Graduate School of Business
David Lee
Global Head of Risk Control
UBS Global Asset Management
Peter Manning
Chief Risk Officer
VTB Bank Europe
Robert Merton
John & Nattie McArthur Professor
Harvard Business School
Joe Pimbley
Managing Director
Duff & Phelps
Riccardo Rebonato
Global Head of Market Risk and Quantitative Analytics
RBS
Peruvemba Satish
Chief Risk Officer
Jamison Capital Partners
David Shimko
Managing Director and Chief Risk Officer
NewOak Capital
Victor Yan
Head of Interest Rate Derivatives and Global Markets Risk
Standard Chartered Bank
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Who Are the Bosses?
For the Securities Industry and Financial Markets Association’s annual meeting in New York in late October, speaking appearances by Securi- ties and Exchange Commission chairman Mary Schapiro (see page 7) and Treasury secretary Timothy Geithner had top billing. Deservedly so,
given the regulatory and economic uncertainties perplexing an audience that also
heard the likes of Conference Board CEO Jonathan Spector, who covered new
recommendations on executive pay, and JPMorgan Chase & Co. chairman and
CEO Jamie Dimon.
But even as regulation dominated the agenda, a panel of brokerage executives
took a different, though perhaps not altogether surprising, turn.
The panelists were not of one voice on policy issues. Curt Bradbury, COO of Ste-
phens, opposed re-regulation, contending that “rules were sufficient” and must be
better enforced. Others conceded the need for harsher medicine; Ronald Krusze-
wski, chairman and CEO of Stifel Nicolaus & Co., perceived “a lot of talk” and
less action on proposed reforms.
John Taft, head of the U.S. division of RBC Wealth Management, changed the
tone when he cited a “failure of stewardship” – a sense that the industry lost sight
of its fundamental responsibilities to those who are its very reason for being: clients.
Instead, “emotion, disorientation and fear” reigned. William Johnstone, president
and CEO of Davidson Cos., observed a damaging “loss of client trust.”
“Through the crisis, we decided to pay attention to the client,” said Taft. RBC
even managed to grow, but Taft was hardly gloating, noting that in a “less than
zero-sum game,” it mainly took business from other firms. Repairing the industry
as a whole requires “values and leadership.” Prudential Retirement delivered just
that when its clients were out of sorts (see page 32).
System priorities are aligning with the message. Switzerland-based Odyssey Fi-
nancial Technologies reports that demand is up for its portal software that links
financial advisers with clients for a full range of portfolio management and report-
ing needs. “The more transparency and views of performance, the better,” says
Craig O’Neill, Odyssey’s North American president. “It’s about doing the right
thing for clients.”
Taft, representing SIFMA as chairman of its private client group steering commit-
tee, told the House Financial Services Committee in early October that the group
supported a federal fiduciary standard for brokers and investment advisers as part
of an agenda of “putting clients first.” Let that not be just “a lot of talk.”
