Thirty for Thirty

By staff Writer

May 01, 2010 at 08:00 PM

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We present for your consideration 30 individuals who over the past 30 years–the period in which Investment Advisor has been serving independent and independent-minded advisors–have been most influential in building this profession that you practice, who provided the theoretical basis for your quotidian practicality, who used their positions among your partners and peers, in government and regulation, to make your professional life viable, and those who kept a sharp focus on what's most important. We believe, too, that they will continue to influence your lives and those of your clients into the next 30 years.

PIONEERS & PRACTITIONERS

John Bogle

Founding Vanguard, the industry's largest mutual fund company, and in 975 creating the first index mutual fund, the Vanguard 500 Index Fund, not to mention authoring seven books on mutual funds, investing, and capitalism that have collectively sold more than half a million copies, would be a list of accomplishments enough to qualify John C. Bogle for the IA30, but those only begin to explain his influence. Bogle celebrates his 81st birthday this month, and still reports to work every day at the Bogle Financial Markets Research Center, working tirelessly on behalf of American investors and to a large degree acting as the public conscience of the industry, reminding the entire financial services world–and the Congress and regulators in his recurring invited testimony–of their responsibilities to the investor. "I'd just like to bring common sense, reality, and mathematical truth back into the world of investing," he says of his self-imposed crusade.

He decries changes in the mutual fund industry that have resulted in thousands of choices for investors but have also changed the character of the industry from one that encouraged investing for a lifetime to one of looking for a quick score. "The industry changed to becoming a much more speculative industry," Bogle says, pointing to the creation of "a lot more speculative funds…all those kinds of funds that we now have to choose from that have very little to do with the market."

Not surprisingly, Bogle remains evangelical in his belief that index funds are the only way to go for the average American who over the long term wants to capture the returns offered by the stock and bond markets. He observes that the current culture rewards managers for taking risks, but if those risks pay off, too much of the profits go to the managers and the company they work for, rather than to the fund's real owners–the shareholders.

Acknowledging that it's a radical idea in a climate where a financial consumer protection agency can't even draw political support, Bogle says he'd like to see a federal statute of fiduciary duty requiring fund managers to put the interests of their shareholders first. He calls that the "ethical principles solution," but he'd be just as happy to see what he calls "the Adam Smith principle solution," in effect. Under that scenario, "investors would only look intelligently after their own interest," he explains, which in Bogle's opinion means buying index funds. "The index fund will capture your fair share of the market's returns," he says, noting that with index funds responsible for only about 20% of equity mutual fund assets, much more has to be done to educate investors.

For advisors, Bogle has some common sense advice: "Put the client first, not only in letter, but in spirit. Look to the wisdom of long-term investing and stay as far as possible from the folly of short-term speculation. Don't reach for yield. Don't reach for performance. Those things generally have unhappy, even tragic outcomes. Invest the money of your clients' the way you would invest your own."–Robert F. Keane (RFK)

(Read more of the interview with John Bogle here.)

Harold Evensky

One major theme for the next decade will be a "continued move toward fiduciary advice," says Harold Evensky, president and CEO of Evensky & Katz Wealth Management, who in the eyes of much of the consumer world is the independent financial planner, and among his peers is the consensus eminence grise. While the Dodd legislation may not include a fiduciary standard for brokers, the SEC and FINRA "are committed to it," he says, and even SIFMA "is coming along." Advisors can expect to be dealing with a decade-long low interest-rate environment, so "the management of expenses and taxes is going to be extraordinarily important," areas where advisors "can offer real value." Since he expects a "volatile [market] environment" to continue, advisors must remain focused on "transitioning from an accumulation universe to a distribution world" which will hold a raft of new products, and where "advisors will have to understand a whole new world of annuities."–MW

Ken Fisher

With more than 24,000 clients, 1,000 employees, and $39 billion in assets under management, Fisher Investments is about as big as it gets in the advisory world, but that doesn't mean it's finished growing, because as founder and CEO Ken Fisher quips, "I've got no market share." Fisher observes that when he started his firm in 1979, "there wasn't even the beginning of the sense of the '40 Act world as being businesses," he says. Advisory firms were "either very small and independent with no business-like quality to them, or something tacked onto the side to some other business like mutual funds, or a bank trust department. Today the investment advisory business has businesses." Due to its size Fisher Investments can accomplish what other advisory firms can't, such as having a vertically integrated organization with a strict separation of product sales and client service, be the industry's largest direct marketer, and hire a formally designated chief innovation officer.–RFK

(Read more of the IA interview with Ken Fisher here.)

Sheryl Garrett

When Sheryl Garrett first decided to charge clients on an hourly basis for financial planning in 1998, colleagues in the industry were skeptical. Although she no longer personally sees clients, today the Garrett Financial Network has about 310 advisors in 43 states, Thailand, China, and Kenya, providing financial checkups for a flat or hourly fee to tens of thousands of individuals and families in a process Garrett describes as "like going to the dentist, but hopefully not as painful." She's confident that in time her business model will become much more widespread and she looks forward to a time when all advisors will be held to the same fiduciary standard, but she is aware "there needs to be thousands of us to meet the needs of the public as [they] begin to recognize what financial planning is and what we do," adding with a laugh that she's not sure it will come in her lifetime.–RFK

Benjamin Graham

Although he shuffled off this mortal coil at the age of 82 in 1976, four years before the first issue of this magazine was published, Benjamin Graham's influence on the advisory profession remains unparalleled. He was a mentor to Warren Buffett, who said he went to Columbia University because Graham taught there, and who has called Graham's 1949 The Intelligent Investor "the best book on investing ever written."

Graham, the father of value investing, stressed the fundamental differences between investment and speculation. He was in favor of businesses paying dividends to shareholders rather than keeping profits as retained earnings and took a disciplined approach to bottom-up analysis. He never deviated from his belief that the key to making sound investments meant looking at the numbers and making intelligent decisions based on them. It's an approach that will likely never go out of style with advisors and their clients.–RFK

Roger Ibbotson

The evangelist of asset allocation and diversification continues to keep the faith, a faith that arises not from revealed dogma, but from the more prosaic task of running the actual numbers and using a keen intellect to descry what those numbers mean in the real world of building portfolios that perform for real people over time. This is the accomplishment of Roger Ibbotson, who knows research as the founder and former chairman of Ibbotson Associates (sold to Morningstar in 2006), who knows academia as professor of finance at the Yale School of Management, and who puts money to work in actual portfolios as chairman and CIO of Zebra Capital.

"I think of myself as an economic historian," he said in an interview in early March, and sees his contribution as "making discoveries" about the capital markets and "bringing them into people's lives."

While many believe that asset allocation and diversification failed during the 2008-2009 crisis, Ibbotson calls for a more nuanced understanding of their benefits, and the numbers convince him that they continued to work even in the meltdown. He notes that in 2008, about 25% of U.S.-listed stocks lost at least 75% of their value, "but only four of the more than 6,600 unlevered open-end mutual funds available for sale lost more than 75% in 2008–so diversification does work!"

Ibbotson has revisited Brinson-Hood-Bebower's contention that asset allocation accounts for 90% of a portfolio's return, arguing instead that the sources of variation of returns from a portfolio are around 75% from the overall market, with the remainder about equally split from portfolio-specific asset allocation policies and from individual securities in the portfolio, along with the timing of trades, and fees.–JG

Deena Katz

Three things will help the "relatively new" advisory profession continue on course: regulatory guidance, education, and research, says Deena Katz, who became the doyenne of financial planning practice management in her day job at Evensky & Katz Wealth Management and now midwifes the next generation of advisors as a professor at Texas Tech. "We have the body of knowledge and we're starting to get regulatory guidance around what we do," Katz says. She was also hoping that 2010 would be the year when all advice givers would be held to a fiduciary standard.

As for education, Katz says the CFP Board's new requirement come 2012 that those seeking certification must prepare and deliver a comprehensive financial plan "raises the bar."–MW

Ross Levin

If Ross Levin, founder of Accredited Investors in Edina, Minnesota, were to update his landmark 1996 opus The Wealth Management Index, he says he would include "more of the whys, rather than the hows." The book is out of print but you can still pick up a new copy on Amazon for only $600 (12 times its original publication cover price). The biggest changes Levin says he's seen since he founded his firm in 1986 is the move to fee-only planning and "the democratization of financial planning. Now the subject has been brought to the masses and you can say you're a financial planner without having to explain what that means."–RFK

Don Phillips

Don Phillips, managing director of Morningstar and creator of the style-box approach to investing, says the mutual fund industry today is "cleaner, fairer, and better" than it was 20 years ago. Now, advisors don't put up with fund firms that provide sub-par services. The fund industry, Phillips adds, "has been responsive to the demands of the advisor community. Advisors want to be treated more like institutions and less like retail investors." In fact, he says, advisors today have more "tools and investments at their disposal than the top institutions had 15 years ago." Going forward, advisors are going to have "more and better tools to do their job," but Phillips warns that "as you get more complex tools, the ability to wield them incorrectly increases."–MW

Bill Sharpe

At a time when retirement planning has become critical to nearly every advisors' practice, Nobel prize winner Bill Sharpe's innovative idea to give everyone access to retirement advice through cutting-edge technology by launching Financial Engines in 1996 cannot be overlooked. Financial Engines' recent IPO is just one sign of its success. Of the three qualified default investment alternatives–managed accounts, lifecycle funds, and balanced funds–managed accounts "make the most sense because they are presumably customized to each participant's circumstances," says Ron Surz, president of PPCA Inc. Financial Engines announced last November that it now manages more than $25 billion in defined contribution assets in its managed account program.–MW

ICONOCLASTS & VISIONARIES

Harry Markopolos

He's the previously obscure man who repeatedly warned the Securities and Exchange Commission (SEC) for nearly a decade that Bernie Madoff was a fraud. Since slamming the SEC for failing to heed his warnings about Madoff during his testimony before Congress in February 2009, Harry Markopolos has become a champion to many Main Street investors, and members of Congress as well as officials at the SEC now turn to him for advice on how to fix the embattled securities regulator.

Markopolos, who now works as a full-time financial fraud investigator, details his years of tracking Madoff and his ordeal with the SEC in a new book, No One Would Listen, (John Wiley & Sons, March 2010). When asked how the SEC is doing now, a little more than a year after his scathing testimony before Congress, Markopolos (pronounced Marco-Poloes) doesn't mince words. The SEC has "reorganized along functional lines, but they still don't get it," he told Investment Advisor in an April interview. "They still have lawyers in charge of all of the main functions at the SEC, and lawyers aren't going to be able to spot any sort of financial fraud. They are not equipped for it. They've never sat on a trading desk, they've never managed money themselves, they've never had customers or clients. So they have the wrong people in charge."

Acknowledging that no other federal agency "has gotten religion quicker than the SEC," and that SEC Chairman Mary Schapiro has "made short strides in the right direction" by bringing industry professionals into the agency, Markopolos says that the SEC still needs to "make wholesale staff replacements" and bring in a "much larger number" of securities industry professionals. Even the SEC Commissioners–who are securities lawyers–should be replaced with industry professionals, he argues. Markopolos gives the SEC credit for "changing faster than the other financial regulators," but says the Commission is "making evolutionary steps where revolutionary steps are needed."

He admits that Ponzi schemes, which were once a "low priority" for the SEC, are now being "attacked vigorously," and that "the SEC now knows how to solve Ponzi schemes rather quickly; they know to get third-party data sources to find out if any trading has occurred."

Markopolos is also adamant that the SEC needs to implement an "entrance exam" so that it can be "an elite agency once again, instead of an also-ran, which is what it's become." Examiners on the accounting side should be CPAs with the "equivalent of Fortune 1000 public accounting or auditing experience," he says, and their test should be tougher than the CPA exam. Examiners in the asset management division should be chartered financial analysts, and their testing should be above the "CFA body of knowledge," he continues. The same goes for lawyers. "They need testing above the bar association."

Another recommendation: The SEC must change its compensation scheme so that it's commensurate with Wall Street salaries, Markopolos says.

Many have questioned why Markopolos didn't contact NASD/FINRA about Madoff, since Madoff operated as a broker/dealer for most of his career, and only registered with the SEC in 2006. Markopolos says he didn't dare reach out to NASD/FINRA because "my submission would have ended up in Bernie Madoff's hands within minutes!" since Madoff was the former chairman of Nasdaq. FINRA, Markopolos says, "is nothing but an industry shield. It's a self regulator… they are even more check-the-box than the SEC is; that's hard to believe. They are even less competent than the SEC and certainly more subject to political influence than the SEC."

Looking into his crystal ball, Markopolos sees the next potential economic blow-up in corporate debt. "Is it going to get paid back?" he asks. "There's a lot of it out there that needs to be refinanced on the corporate side…mortgage-backed securities that are going to need to get refinanced, and the question becomes, 'Can they?' What is the value of those properties?"–Melanie Waddell (MW)

(Read more of Melanie Waddell's interview with Harry Markopolos here.)

Amy Domini

In the last 30 years socially responsible investing has become a force to be reckoned with, and for that you can thank Amy Domini. She was involved in the shareholder activism that leveraged U.S. companies to bring about peaceful political change in South Africa, and created the Domini 400 Social Index in 1990 with her partners at KLD Research & Analytics, to show that there was no performance penalty for using social and ethical screens in the investment process. "It proved over time there was no cost. In fact, on balance, there's a profit," she argues, adding that over the past 20 years the Domini 400 has outperformed the S&P 500. Not slowing down at all, the founder and CEO of Domini Social Investments most recently wrote Socially Responsible Investing: Making a Difference and Making Money.–RFK (For more, see The Green Advisor, page 92)

Steve Jobs

The average advisor does not use a Macintosh at work, and Blackberries are far more common in advisor cellphone holsters than iPhones, but independent advisors couldn't exist without the user interface approach that Apple's Steve Jobs popularized, and his company's commitment to making personal computers that could easily be used by non-technical folks lies at the heart of every broker/dealer or custodial technology platform that independent advisors use daily. If it's true, as LPL's Todd Robinson said in an April interview that advances in desktop computing over the past 30 years made it possible for "professional portfolio management to be brought to the individual," then Jobs's graphical user interface made it possible for the advisor to manage that PM tool. With mobile computing the next technology frontier, Jobs and Apple are still leading the way with the iPhone, iPhone apps, and the iPad.–JG

Michael Milken

His indictment for racketeering and fraud and his second career as a philanthropist and innovation incubator are not why Michael Milken was chosen for the IA30, but rather his role in introducing high-yield bonds to the advisor's investment toolchest and the entrepreneur's capital options. As head of bond trading at Drexel Burnham Lambert, Milken helped build a junk bond market that was worth about $150 billion by 1990 and financed a raft of mergers, acquisitions, buyouts, and hostile takeovers as well as providing funding for a number of today's leading corporations. After his 1989 guilty plea to six securities and reporting violations, Milken spent two years in prison and was barred from the securities industry for life, but in 2009 Forbes ranked him in a 25-way tie for 158^th wealthiest American with a net worth of $2 billion.–RFK

Chuck Schwab

If the measure of success for a business owner is that the business can run just fine without him, and if imitation is indeed the sincerest form of flattery, then Charles Schwab is even more successful, and more flattered, than he has been at building the top discount broker, then the first mutual fund supermarket, and his crowning achievement for IA 30 for 30 purposes, finally the premier custodian for independent advisors. Schwab Advisor Services, the institutional house that Chuck built, continues to focus on servicing its existing advisors and staying ahead of the curve whether by playing matchmaker for breakaway brokers with existing Schwab clients or, most recently, transforming the business model of the exchange traded fund marketplace by offering its own stable of commission-free, low-cost ETFs: the flattery has already started.–JG

Eric Schwartz

Thirty years ago, independent broker/dealer reps were mostly commissioned salespeople who differed from their wirehouse brethren only in their higher payouts and in getting 1099s rather than W-2s. Eric Schwartz, founder, chairman, and CEO of Cambridge Investment Research, helped change all that by being the first broker/dealer to wholeheartedly embrace the fee approach long before the term "hybrid advisor" entered common parlance, with the open-architecture platform that a fee-friendly approach requires. Despite the early fee adoption–which nearly all independent B/Ds have since emulated–Schwartz was less a zealot than a pragmatist who saw a business opportunity and grabbed it. As a founding member of the FSI, Schwartz helped unify the entire IBD industry, and as the group's chairman last year, he was particularly proud of bringing smaller firms into the FSI fold–firms that were the size of Cambridge until the fee mantra helped drive Cambridge's growth.–JG

Mark Tibergien

In the eight years that Investment Advisor has been identifying the most influential people in and around the advisory profession, only one name has been included every year–Mark Tibergien. Currently the CEO of Pershing Advisor Solutions, Tibergien established his reputation as the industry's foremost practice management guru during his years as principal and partner in charge of the securities niche at Moss Adams in Seattle, author of several books, and as a long-time Investment Advisor columnist.

"I think that one of the biggest changes that has occurred is that advisors are now dealing with clients who are more informed, but they're not more knowledgeable, necessarily," Tibergien observes. "This puts a special onus on the advisor for how they deliver advice."

An even more profound change is the emergence of advisory practices as businesses. "Thirty years ago there was more of a tendency to see this business as large employer-based companies," he says. "Now you see literally thousands of independent financial professionals running their own enterprises, whether they're affiliated with an independent broker/dealer or operating as an RIA." The special challenge for those thousands? "Not only do they have to be current and sophisticated in how they render advice, but they have to have the ability to run a business as well."

Looking toward the future, Tibergien sees an increasing regulatory burden being placed on advisors as just one factor. "The profession generally is experiencing market squeeze," he continues. "Clients are becoming more sophisticated in the questions they're asking and more cynical about the advice they're getting. There is an acute talent shortage, yet there's an oversupply of clients." One of the biggest challenges will be how the profession handles the succession of the current generation of firm owners, he predicts, and whether it can provide a "compelling career track" to attract young advisors in sufficient numbers to meet the demand.–RFK

(Read more of the interview with Mark Tibergien here.)

Don Trone

You could call him Mr. Fiduciary. Don Trone, CEO of Strategic Ethos, has been championing the fiduciary standard for decades, long before founding the Center for Fiduciary Studies, the Foundation for Fiduciary Studies, and Fiduciary Analytics in 1999. Trone was recently commissioned by the Financial Planning Association (FPA) to create a series of books that define a fiduciary standard for each of the financial planning pillars. "If you think about the historic work that I've been involved in, it's been focused on defining a fiduciary standard for investment management," Trone says. The fiduciary guides will be called Fiduciary Ethos-FPA Edition, and volume one will detail the investment management fiduciary standard. Additional volumes will focus on the general principles of financial planning; insurance planning and risk management; employee benefits planning; income tax planning; retirement planning; and estate planning.–MW

Skip Viragh

Advisors who take their fiduciary duties seriously in building a well-diversified portfolio are sure to include some alternative investments, and not because their clients want to be able to brag that they're invested in a currency ETF, or because a given alternative strategy might be yielding a higher return at the moment. No, they're included because these alternatives provide actual diversification and can ameliorate risk in a portfolio, and nobody gives it a second thought. It wasn't always that way, however, and the late Albert "Skip" Viragh can be given credit for that sea change. As founder of Rydex Investments, now part of Securities Global Investors, Viragh, who died in 2003, was instrumental in launching a wave that has become a tsunami: bringing institutional-level investment vehicles to the individual client level, while keeping advisors in the mix to ensure those sophisticated investing tools are used correctly.–JG

Al West

You may not know Al West, but you know the company that he co-founded in 1968–SEI–and you likely take advantage of the approach that he helped pioneer: outsourcing. SEI began life as a tech outsourcing firm to bank trust departments, but West helped translate that approach into investing, building a powerhouse public company that through its SEI Advisor Network subsidiary serves 6,500 advisors (250 RIAs added in 2009) with back-office administration services and manages more than $27 billion in advisor AUM. Its practice management offerings are gaining traction, too, all of which appears to pay off for advisors–a 2008 Moss Adams survey found that broker/dealer reps who affiliated with SEI boasted significantly higher client AUM, revenue, and clients.–JG

PARTNERS & POLITICIANS

Tom James

These days, advisors and executives from everywhere along the spectrum of independent advice giving assume three things: that advisor practices and their partners are run as businesses; that advisors put the clients first, and that those clients deserve regular reporting from their advisor on what products and services they're getting in exchange for their fees or commissions; and that advisors themselves have a number of options to choose from in the business platforms from which they can provide independent advice along a spectrum from employee broker to independent contractor to hybrid to full-blown independent RIA. It hasn't always been that way, however, and for those developments which seem like givens these days you could do worse than to thank Tom James and the firm that his father, Robert "Bob" James, co-founded and that he himself joined in 1966 fresh out of Harvard Business School (he'd graduated Harvard College in 1964).

In fact, as an advisor you can hang your hat at Raymond James in a number of different ways–as employee, independent contractor, or RIA–and as of March 2010, there were 5,300 advisors doing so in the U.S., Canada, and overseas, serving 1.9 million customer accounts, and with total client assets of $233 billion. But there's one principle that ties all those advisors together: putting the client first.

Raymond James Financial's COO, Chet Helck, who runs the company's Private Client Group, says "Tom has been an instrumental leader for 30-plus years," who created a platform "that results in stability and innovation," and which established "clearly defined accountability that separates people in the advice business from people in the product-selling business." One example of that innovation, Helck says: "calculating performance on every account in the firm," and the Client Bill of Rights which, among other items, promises a "trustworthy and competent financial advisor…clear communications…comprehensive statements and trade confirmations…[and] prompt error and complaint resolution." And this was first published and provided to all Raymond James clients in 1994. It still is. "Nobody else has this kind of disclosure," says Helck, who traces Tom James's commitment to clients to "values, especially his father, a highly educated guy who started selling real estate to folks from the Midwest"–that's why Raymond James is based on the West Coast of Florida, a traditional hotbed for Midwestern snow birds–and eventually financial advice to those same clients. "Bob James had integrity," says Helck.

James recalled in a March interview that he had to put his business skills to work immediately upon joining the company, but he didn't rest on his laurels. He received his JD and eventually his CFP, served on the board of the SIA (now SIFMA) and on NASD boards. He became CEO in 1970, took the company public in 1983, and this month cedes that job to Paul Reilly, though James's contribution to the company–and the communities in which the company operates, which James has always stressed to his executives– will continue. Speaking of Tom James and his legacy, Helck says that when it comes to folks who work for Raymond James and advisors who choose to affiliate with the company, "true leadership causes people to want to do things right, and it attracts people who want to do the right thing," As for clients, he notes that "indifference and fear keeps people from making the right decision; one of our main skills at Raymond James is education" that can dispel fear and inspire sound decision making.–James J. Green (JG)

Dale Brown

For the last 22 years Dale Brown has been working as a professional advocate for the advisory profession, first with the IAFP, then the FPA, and since 2003 as president and CEO of the Financial Services Institute. Brown observes that Americans have come to realize they need help to accomplish their financial goals. "Obviously I'm biased," he admits, "but I think the independent advisor who has partnered with an independent broker/dealer is in the best position to be that advisor of choice." In the seven years since its creation, Brown says FSI has achieved recognition and credibility. "Now the challenge is leveraging that credibility into real and meaningful influence on the issues that are important to our members' business."–RFK

Joe Deitch

"One of my greatest strengths is my knowledge of how limited I am," says Joe Deitch without a hint of discomfort. "So I've surrounded myself with talented people who speak their mind and their views. If we make few mistakes, it's because we hammer it out; we'll debate until we arrive at a clear consensus," says the chairman of Commonwealth Financial. While he touts the long tenure and contributions of Peter Wheeler and his partners at Commonwealth who help him vet company strategy, Deitch is clearly the heart and soul of this independent broker/dealer which has made its mark by being "enormously clear about quality and community." That quality starts with the back office, where he notes that "we're all incented in the same way; every single person in the home office has stock options; advisor satisfaction is a massive part of our bonus plan." Commonwealth's vaunted practice management and wealth management competencies are nearly universally recognized, but he's quick to cite now-President Wayne Bloom for "building the money management division." Then in 1989 Commonwealth started its practice management operations, run at first by Deitch's late wife, a psychologist. "It was all about, at first, how do you build a team? Then I hired Joni Youngwirth." As for community, Deitch notes that "close to 60% of our home office staff is related" by blood or friendship, and that in interviewing for both new reps and staff, "we're very vigorous, because we're letting them into our house."–JG

Alan Greenspan

Alan Greenspan's monetary policies during his 19 years as head of the Federal Reserve influenced the growth of the American economy and the long bull market, for which advisors and their clients are grateful. But did it also contribute to the financial meltdown? In testimony before the Financial Crisis Inquiry Commission on April 8, Greenspan said that "It was the global proliferation of securitized U.S. subprime mortgages that was the immediate trigger" of the crisis." While he acknowledged that he had made mistakes while at the Fed, he did not believe that his historically low short-term interest rates between 2001 and 2004 was one of them. Greenspan said that going forward there should be rules that "would kick in automatically, without relying on the ability of a fallible human regulator to predict a coming crisis."–MW

Ned Johnson

Edward (Ned) Johnson has been a fixture as head of Fidelity Investments for three decades. As chairman and CEO, the 79 year-old doesn't look to be giving up his positions anytime soon at the largest mutual fund company, which also has loomed large among advisors through its RIA custody business, its TPA business, and its National Financial clearing arm. But Fidelity does "have a stated succession plan," says Jim Lowell, editor of the Fidelity Investor, although there's "no doubt that Ned is still at the helm and still the visionary at the firm." After Fidelity's president, Rodger Lawson, retired on March 31, Fidelity assembled a "committee of nine" executives, which includes Johnson's daughter Abigail, instead of appointing a new president. Lowell says this "committee" is a sign that "Fidelity is internally, at the senior-most levels, debating what leadership is going to look like and how leadership is going to be defined in the near future."–MW

Ronald Reagan

The Great Communicator influenced the profession in multiple ways. His "Morning in America" and tax cutting approach helped bring Americans out of a malaise caused by hostage taking, oil embargos, a long bear market, and high inflation. The still-young profession of financial planning had become focused on tax avoidance, specifically tax shelters using limited partnerships. In our 25th anniversary edition in 2005, however, pioneering planner Ben Coombs recalled that "Volcker and Reagan breaking the back of inflation, and changing the tax code environment" was pivotal in the changes in the profession that followed. Let's not forget that the 401(k) debuted in 1981, and that Reagan signed an increase in the payroll tax in 1983 (proposed by a commission headed by Alan Greenspan, by the way) to fund Social Security and Medicare. Yes, a tax increase from the patron saint of tax cuts that preserved government-sponsored retirement and healthcare.–JG

Todd Robinson

"It was never our intent to be the biggest, but sometimes the best become the biggest," recalls Todd Robinson of the early days of what is now known as LPL Financial. However, notes Robinson in a telephone interview in April marking a departure from his self-imposed press silence since he and his partners sold a 60% stake in LPL to a private equity firm in 2005 in a deal then valued at $2.5 billion, "the bigger we got, the more services we could offer." There was another advantage that Robinson and his partners brought in merging Linsco with Private Ledger in 1989 and building a B/D behemoth that as of year-end 2009 could count nearly 12,000 reps, $279.4 billion in brokerage and advisory assets, and a growing custodial platform for RIAs: "I started as a broker; [partner] Jim Putnam was a broker–that gave us a better ear because we had lived in their world; some of our competitors came out of the insurance and financial planning worlds–they didn't appreciate the value of a good back office." Robinson says that he "stepped back" from LPL because "individuals are mortal, and we'd reached a size where we needed to institutionalize the company–and that's gone well–everything seems to be going great."–JG

Franklin Delano Roosevelt

If you're wondering why the 32d President of the United States should be considered, allow me to present just a few of his biggest accomplishments–no, not the WPA or CCC or TVA, but the SEC, the FDIC, the FHA, GNMA, and FNMA. No, not the New Deal itself, but Social Security. It was during FDR's presidency that the Securities Act of 1933, the Investment Company Act of 1940, and the Investment Advisers Act of 1940 were passed. And it was in his failed attempt to coopt the Supreme Court by expanding its numbers that he won the legal right for the government to regulate the U.S. economy. Still unconvinced?–JG

Mary Schapiro

Since becoming SEC Chairman in early 2009, Mary Schapiro has had the enormous task of rescuing the embattled securities regulator from near collapse. After the Bernie Madoff Ponzi scheme and the failures on Wall Street, Schapiro has created new divisions at the Commission, instituted new rules, encouraged more collaboration among divisions, and hired people with a wider range of skills.

Schapiro told Investment Advisor in early April that the SEC continues to "push very, very hard" for a fiduciary standard for B/Ds and RIAs. "We've been working very hard in the House and the Senate, to mixed results honestly, to try to get that grant of authority to have a fiduciary duty across both categories of financial professionals. Until we have the legislation, it's hard for us to get very much done" in harmonizing the rules for brokers and advisors.

Moreover, she says, the SEC's "attention right now is focused on fighting for the legislative provision that would mandate a uniform fiduciary standard."

Schapiro says she'd also like to see the final financial services reform legislation include a self-funding mechanism for the SEC. While she says there are "a lot of great things" in the House and Senate bills, like bringing over-the-counter derivatives under regulatory scrutiny for the first time, Schapiro says gaps still need to be filled.–MW

(Read more of Melanie Waddell's interview with Mary Schapiro here.)

Marv Tuttle

Marv Tuttle's long service as the executive director and CEO of the Financial Planning Association, and with that group's predecessor organizations, gives him a tenure in the industry almost as long as this magazine's. The biggest change he's seen in that time is the attitude toward the profession from media, legislators, and regulators. Today, "consumers are feeling more and more comfortable that professional financial planning can be part of their lives…but we still have lots of work to do in making sure that access to financial planning…is afforded to a larger swath of the American public."–RFK

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