The FPA's conference focuses on responsibility, education and teamwork.

The Financial Planning Association (FPA) has been on a mission to advance and enhance the professional status of the planning profession, and that was made abundantly clear in the kickoff of its annual convention.

In his opening remarks at the FPA's Success Forum 2003, held November 1-4 in Philadelphia, FPA President David Yeske told attendees that the responsibilities associated with being a planner couldn't be greater.

With many practitioners "adopting the name of 'financial planner' without committing themselves to the process," he added, it's more important than ever that FPA members differentiate themselves through quality of service and professionalism.

"We deal with some of the most powerful forces in people's lives-as powerful or more powerful than those of any other profession," Yeske said. "The forces we deal with are all-pervasive."

He urged FPA members to embrace the role of fiduciary in their clients' affairs-whether the law stipulates it or not-and to face up to the responsibility, as well as liability, that goes with such a role.

"Financial planning has the power to transform lives," he said.

Once the opening remarks were done, attendees turned to the nitty gritty-attending workshops, passing out business cards, perusing exhibitor booths and stuffing their complimentary shoulder bags with printouts, charts, books, brochures and notes.

Preliminary head counts put attendance at approximately 2,700, which about matched the number of people who attended the FPA's convention in New Orleans a year ago, said FPA spokeswoman Heather Almand. The event revolved around dozens of educational sessions, following seven tracks covering topics in practice management, estate and tax planning, investment and risk management, among others. In response to member requests, the FPA also added a series of sessions dealing with issues of concern to practitioners in Canada.

Each day also included a keynote speaker, the first of whom, branding consultant Harry Beckwith, offered attendees advice on how to market and grow a business.

The pillars of any plan, he told them, are price, brand, the "packaging" of products and services and client relationships. Jokingly telling the audience that a $30 pair of socks feels a lot better than a discount brand, Beckwith said planners shouldn't be bashful about the prices they charge clients.

"Prices and your fees are the value you assign to the services you are providing," he said. "Prices and fees are your communication of the quality of your services. The higher the price, the higher the perceived value."

He also stressed the importance of branding, noting that Yahoo!, despite the fact its Internet search engine could be viewed as inferior to others in the market, attained an international following through a concerted branding effort.

"Brands have a placebo effect," he said.

Among the other facets of a successful business, he said, are fast and friendly service. A friendly greeting to prospective clients, he said, could make all the difference in the world. "No other single act creates more customer satisfaction than in the first two or three seconds," he told FPA members.

On the investment front, attendees heard a range of scholarly-and sometimes conflicting-advice when it comes to the role of equities in client portfolios.

Zvi Bodie, professor of finance and economics at the Boston University School of Management and author of Worry-Free Investing, bluntly told advisors that they are over-emphasizing equities for their risk-averse clients.

Too many advisors, he says, subscribe to the belief that equities become less risky as clients time horizons lengthen. This, he maintains, is a mistake. While the chances of a shortfall do decline as time goes on, he says many people ignore the fact that the potential severity of a shortfall rises.

"Stocks are not safe in the long run. Beware using probability of a shortfall as a measure of risk," he said.

His main points were that stocks are not safe no matter how long an investor's time horizon, and that presenting clients with a small number of easily understood investment choices is better than overwhelming them with a large number of choices.

Bodie, in fact, told planners that most people "don't get it" when it comes to diversification, and they more easily understand hedging strategies and insured investments.

"Those are the two oldest and most familiar ways of managing risk, for most people," he said.

Some of the "safe" investment instruments he advocated included inflation-protected bonds, inflation-proof annuities, index funds, iShares and index options.

Advisors got a brighter outlook on equities later in the convention from keynote speaker Jeremy Siegel, professor of finance at the Wharton School of the University of Pennsylvania and author of Stocks for the Long Run.

Siegel started out his presentation by noting the last time he spoke to an FPA crowd was in 1998, and joked, "If we could have just jumped from 1998 to today, it would have been a lot easier."

Despite the volatility of recent years, Siegel says the data continues to back up the argument that equities are a desirable investment for the long term-more so than fixed-income vehicles.

He predicts that equities will provide annual returns of 5% to 7% after inflation, and that concerns about continued over-valuation of stocks is unjustified.

Siegel argues that the proof to his argument is contained in 200 years of history. By analyzing equity data stretching all the way back to 1802, Siegel maintains that equities have provided average after-inflation annual returns of 6.7% since that time. Bonds, meanwhile, have brought returns of 3.6%.

A dollar invested in equities in 1802, he says, now has an after-inflation value of $516,241. "The equity growth rate doubles your purchasing power every ten years," he says.

Siegel did inject one note of caution as far as the economy is concerned. He noted that the gap between the nation's average retirement age and life expectancy is growing ever wider, from 1.5 years in 1950 to more than 14 years now. As retirees begin to outnumber workers, he said, two questions arise: Who will produce the goods, and who is going to buy the assets of the baby boomers? Siegel says the answer lies with the younger populations of China, India, Indonesia and other developing nations. "By the middle of this century, the developing countries will own more than 80% of all world assets," he says.

As for more current events, speakers warned advisors of the changes of the immediate past and possibly the immediate future, that could impact them directly.

Don Phillips, managing director of Morningstar Inc., said the recent mutual fund scandals will lead to deep changes. "These are dark days for the mutual fund industry," he said. "The mutual fund industry is about to get the most thorough scrubbing it has ever gotten."

Duane Thompson, the FPA's director of government affairs, said the last several years have led to dramatic changes for the planning profession. The September 11 terrorist attacks and the explosion of corporate scandals are still having an impact in the area of regulation and consumer rights.

Even the recent "do-not-call" rule may have an impact on planners, he says. Advisors who call referrals who are on the do-not-call list may be leaving themselves liable, he said. "Find another way of contacting them," he said.

FPA officials, meanwhile, expressed satisfaction at the convention turnout. In her address to attendees, FPA President-elect Elizabeth Jetton reminded attendees of the importance of working together as an organization. Noting that most planners are notoriously independent, she said, "Sooner or later the time comes when you ask, 'How much better off would I be if I engaged in a dialogue with my colleagues?' ... No one can really set a professional standard alone."