Our US correspondent attended a "Future Proof" conference in Miami Beach to take the temperature of the North American wealth management industry – and that further afield.

Three years after establishing itself on the beaches of southern California as one of the industry’s most talked about conferences, Future Proof arrived on the east coast last week and replicated its success in Miami Beach.

About 2,500 attendees from 13 countries, more than 200 sponsors and an army of advisors managing an estimated total of nearly $10 trillion in assets, many wearing shorts and most wearing sunglasses, gathered on the beach to mingle, make contacts, hear (and give) sales pitches, attend panel sessions, visit vendor booths, eat from food trucks and drink and party at night to rock and roll bands.

Other than having the brilliant insight of holding a conference outside on a sunny beach instead of in claustrophobic hotel rooms and cavernous convention centers, Future Proof’s biggest innovation has been the wildly popular “breakthrough meetings,” where attendees are matched by algorithms for four one-on-one encounters in one hour, each lasting around 12 minutes each, with potential business partners, a business version of speed dating. 

“I’m not going back to an LPL conference ever again,” said Drew Boyer, president of Boyer Financial Group in Columbus, Ohio after participating in 24 breakthrough meetings in two days. The amount of information he received at the sessions, combined with the relaxed beach-front atmosphere, has made Future Proof Boyer’s top conference choice. “Everything’s here, and it’s more fun,” he declared.

Sensuality and serious business
The inaugural Miami Beach “Citywide” conference had “more an institutional vibe” than the larger and more youthful conference held annually in September in Huntington Beach, said Barry Ritholtz, chief investment officer for Ritholtz Wealth Management, a business partner of Future Proof founder and CEO Matt Middleton.

But there was no doubt that the sensual mixture of plentiful exposed flesh, alcohol and non-stop pulsating techno music in raucous Miami Beach loosened up the older crowd.

To be sure, the conference featured a full slate of serious business content. Headline speakers included industry luminaries Shirl Penney, Joe Duran and Michael Kitces.

Session highlights included Andrew Pitcairn and Brian Broadway discussing family office governance; Peter Raimodi and Jeffrey Gonyo offering advice about equity distribution and Josh Brown, Michael Batnick and Joseph Terranova engaging in a frank discussion about the state of the financial markets.

Family governance: “Philanthropy just a different sandbox”
Broadway, vice president of family office community at Forge Community, counseled patience when it came to family members debating governance issues at family office meetings. “People will be asking a lot of questions and there will be a lot of different opinions,” Broadway said. “But you don’t have to have a deliverable right away. It’s more important to have the right deliverable at the right time. Everyone’s expectations can’t be met immediately.”

In situations where families are riven by disagreements, philanthropy shouldn’t be viewed as “the answer to all your problems,” Broadway added. “Philanthropy is often just a different sandbox to play in, another place to litigate frustrations.”

Pitcairn, a director at his family’s eponymous MFO, had pointed advice for vendors soliciting family offices: “You’re building for a relationship, not a transaction.” And, as a member of a wealthy family now in its seventh generation with a family office over 100 years old, he advised growing families to try and keep things as simple as possible: “The bigger a family gets, the smaller the mandate should be.”

Equity distribution: ‘Don’t be greedy!’
In the designing equity distribution for RIA growth session, industry veteran Peter Raimondi, currently the CEO of Dakota Wealth Management, urged founders to spread equity beyond just one or two people in the firm, which is what he said Dakota usually encounters. The main reason founders hold on to their equity? “Greed,” according to Raimondi. “They just don’t want to part with it.”

Jeffrey Gonyo, the head of wealth management at Steward Partners, urged founders to start equity distributions when they have a timeframe for wanting to start cutting back on their hours. “The earlier you can start the better, so when you’re ready to retire, you’ve set a path for a 10-year buyout,” Gonyo said.

Blunt market commentary
A live presentation of Josh Brown’s irreverent podcast “The Compound and Friends,” complete with blunt opinions, salty language and brash commentary, was a good example of Future Proof’s differentiation from other conferences.

Brown, CEO of Ritholtz Wealth Management and panelists Michael Batnick, a managing partner at Ritholtz and Joseph Terranova, senior managing director at Virtus Investment Partners, addressed  the apprehension many, if not most, attendees were feeling about the stock market as it fell into correction territory. “The longer the market takes to return to its highs is [where] the worry lies,” Brown said.

All the panelists agreed that investors were concerned that instead of a “V-shaped” correction and quick bounce back such as the market experienced in 2021, the current market volatility might result in a more prolonged “U-shaped” pullback. 

The soft data can turn south pretty fast,” said Batnick. “If people are worried about jobs, it will affect spending, which will affect the stock market.”

Investors should view the decline of the “Mag Seven” stocks as an opportunity to diversify and not to panic, Terranova said. “History teaches us that the market will always recover from periods of volatility,” he noted.

Concluding the podcast by stepping back and taking the long view, Terranova reminded listeners that “a loss in the market is never as important as a personal loss.”