Building the culture of the exempt market industry: Key Learnings From the Pinnacle Advisor Summit | January 2013
By: Jason Bekdashe & Felicia O’Neil
In a new and vibrant industry born out of controversy and investor failures, it is imperative that Exempt Market Dealers (EMDs) distance themselves from this history and be identified by their core values. Integrity, transparency, and trust are the inherent characteristics necessary to rebuild confidence in this market, both by the investing public, and the representatives working within it. Pinnacle Wealth Brokers, a national EMD focused on displaying these characteristics, made them the core focus of its 3rd annual National Advisor Summit in Banff, Alberta. It brought together Dealing Representatives (DRs) nationwide, along with issuers, prospective agents, and various industry partners and guests. We were pleased to be invited to the Pinnacle Summit and experience Pinnacle’s leadership efforts first hand.
The Summit was designed to encourage participation and interaction. It was a time to freely ask questions and get answers. Most importantly, it was a time to build relationships, share best practices, build networks, identify market challenges and participate in the shaping of the industry as a whole. Here are some of the culture building lessons that we learned from this event:
(1) Shared Vision
Pinnacle’s Executive team took the opportunity to give presentations on the exempt market today, and shared their insights into its future, which set the tone for the entire Summit.
When Rick Unrau (CEO) and Darvin Zurfluh (Chairman) took to the stage and shared their insights, it was an earnest encouragement to everyone to participate and provide their feedback on what can be done to improve product offerings and what the dealership can do to further support the DR’s and their clients. It was also a great opportunity to review other facets of the industry that are constantly evolving across the country. The discussions were not just about Pinnacle’s vision, but a broader vision for the industry itself.
Building culture requires emotional components and a vision of what could be. It captures the soul of an organization, creates common values and direction and ultimately inspires, especially when the terrain gets tough. When you share the formation of your vision, it allows you to provide the building blocks, take the feedback of employees and partners, revise, and create to realize a ‘shared vision’ instead.
(2) Diversity Educates Everyone
The conference offered a number of informal networking opportunities to share ideas with peers and industry partners. Networking added tremendous value and education to everyone who participated, especially within some of the more diverse groups. According to a recent MIT study that looked at different collaboration models: “ people who worked together on a project from different backgrounds outperformed those that come from a homogenous background.”
The DRs, Issuers and the executives from Pinnacle all shared their best practices, daily challenges, and what they are passionate about creating. The format of the networking sessions, along with the trained facilitators, kept all participants engaged and inspired.
(3) Say it like it is!
During the conference, a number of experts took to the stage covering a wide range of topics. Kathleen Black, an industry veteran in compliance, acting as Pinnacle’s Vice President of Risk Management and Chief Compliance Officer, addressed the compliance process covering areas where DRs need to improve practices to meet regulatory requirements. Kathleen passionately stressed her desire to change the paradigm that exists in other facets of financial services, where compliance is viewed as directly opposed to sales efforts, and the rules are viewed as onerous to operate within. Instead Pinnacle would take a collaborative approach in educating DRs to act in a collegial manner to understand and meet all regulatory requirements. .
Bill McNarland CFA, Vice President Research and Economics, discussed areas of vulnerability for issuers and highlighted new Pinnacle practices in product research. A new quantitative scoring system was introduced as part of the evaluation process of each offering reviewed. Bill carefully explained that Pinnacle is intent on removing any subjective opinion or bias that could be challenged. Like it or not the new scores were presented in front of all Issuers. The interesting dynamic of the conference did not see Issuer discontent as to their ranking or scoring. What this methodology did do however was open the minds of issuers to look at the specific features and structure of their offerings. With such a structure, Issuers have a clear sense of exactly what the EMD is looking for, in order to create a strong offering for the investors and the dealership. This provided a clear example of the evolution of the exempt market and the development of best practices that benefits investors and the industry as a whole.
On the final day of the summit, there was an open panel forum that gave all attendees an opportunity to openly share their ideas and challenges with the executive team. It was an honest exchange where participants shared concerns, feedback, desires and praise. The interesting dynamic was viewing the commonality of issues as various topics were raised. It became apparent that participants were getting as much out of identifying with and helping each other, as they were from the responses the panelists provided at the front.
(4) Facilitating Learning Also Builds Relationships
VP Business Development Lloyd McDonald was MC and kept the group entertained and on time with a jammed packed schedule. Imagine being given an opportunity to educate over 100 of your best customers face-to-face in just nine minutes. The ‘speed-dating’ portion of the conference was information overload but piqued curiosity and encouraged DRs to do more of their own due diligence. The tables hosted Issuers and each nine minutes four DR’s would stop by to get educated on the Issuer’s products. It was not as easy as it sounds - the issuers had only nine minutes to deliver their products’ key attributes and benefits to the DRs and their clients.
According to Unrau, this sort of lightning education round worked well to build that personal connection and knowledge of product offerings, as well as keep all participants engaged. It was designed by the executive team as a superior means of knowledge transfer to that of the traditional presentation. With a broad group of Issuers, Pinnacle recognized that DRs would not have the attention span to retain meaningful knowledge by listening to presentation after presentation over a two day span. Comparatively, when sitting face to face with each issuer, there is direct interaction which gave the DRs a boost of knowledge and broke the ice for the Issuers. From the Issuer perspective, these sessions were grueling yet exciting. As one Issuer commented, “Initially we felt that this would be too short of a time to present our story, but in retrospect, the timing was just right. We will often travel hours to meet with the representatives to explain our offering and see if they will be supportive of our offering for their client base. Typically in the first five to ten minutes of a meeting, we realize whether there will be interest in working together. This concept allowed us to identify and later focus our efforts on those representatives who felt our offering may be a suitable fit for their clients.”
In this industry, the better the relationship is between the Issuer and DR, the more successfully they can work together. Speed dating was just as much about education as it was about getting to know your partners.
In summary, after just two and a half days at the Summit, we gained a greater perspective on what makes the exempt market a fascinating industry to work in. Participants in this industry, who are primarily independent in nature, have the opportunity to come together, and gain ideas and knowledge from both their EMD and from each other. It was very apparent that the Pinnacle management team was fully committed to making this event a meaningful experience for all participants, with a high degree of professionalism and honesty.
By EMDs and industry participants hosting education conferences like this, the culture of the Exempt Market will continue to take shape, inspiring those who work in it, exciting those who want to be part of it, and ultimately delivering confidence and success to the investors who participate in it.