. Government Regulations and Financial/Insurance Meetings | Successful Meetings

Government Regulations and Financial/Insurance Meetings

Safety issues and the likely rollback of government regulations trouble financial and insurance meeting planners

Meeting Insecurity opener

There are a number of issues that meeting planners working for or with financial and insurance companies deal with that are the same as for any planner, like flat budgets. But for the financial and insurance industries, two issues loom particularly large right now: security and government regulation.

"Those are the two gorillas in the room," says Steve Bova, CAE, the executive director of Financial & Insurance Conference Planners (FICP).

Of the two, government regulation -- and the uncertainty surrounding it -- is the biggest, most immediate, and most specific concern, thanks to a new rule originally set to go into effect in April that would hold the advice retirement investment advisors give clients to a much higher legal standard, one that could have a huge impact on how incentive programs are run. Of course, the Trump Administration's decision to delay -- and likely revoke -- the rule for which companies have spent nearly a year and a half preparing, has created a great deal of confusion.

As for the security issue, in one sense it is not specific to the financial and insurance industries. "Security is definitely on everybody's mind," Bova says. "Anytime I go to a broad meetings industry event, it's the subject that comes up -- and it's not 'if,' it's 'when': When is something going to happen in our industry at a convention, in a ballroom, at an event, and are we prepared to respond?"

At the same time, these are two industries for which security is the stock-in-trade. "These companies are in the risk-mitigation, risk-reduction business," says Tom Wilson, division vice president, financial services sector leader of Maritz Travel. "There is a high level of sensitivity around risk. We are working more than we ever have with our clients' security departments directly. Oftentimes we are doing site inspections with their security team."

One fact worth noting is that security, particularly in the financial and insurance markets, has two components. One is physical security, taking into account things like terrorism and destinations prone to civil unrest. But almost as important -- and a lot easier to at least attempt to plan for -- is information security.


Security in the Age of Terrorism
While people in the meeting planning industry are talking about the possibility of a terrorist attack of some sort on a meeting or convention facility, it can be argued that one already happened: the Dec. 2, 2015 mass shooting in San Bernardino, CA.

That took place in a conference room in the Inland Regional Center, a social services facility, during what The New York Times described as "a combination training session and holiday lunch held by the county health department." Fourteen people were killed and 21 wounded by the husband-and-wife attackers, who claimed allegiance to the Islamic State.

While saying that "we've already had an incident where one of our meetings was attacked might be something of a reach," says MaryAnne Bobrow, CAE, CMP, CMM, president of association and meetings management firm Bobrow Associates, Inc., she knows of at least two industry initiatives that are working with the Department of Homeland Security on venue security standards.

Despite that, "I'm concerned about what we are not doing at this point," says Bobrow, who speaks frequently on security and cybersecurity issues. "I've walked the halls of meetings and just shaken my head at the lack of security. There are guards stationed every so often, but all they're doing is looking for a badge. They're not armed."

Some planners agree that security is lax, among them Brian Melton, CMP, vice president of global accounts for ConferenceDirect, who agrees that the main reason one of his financial clients hires security guards for its conference is to protect its registration fees.

Across all of his clients, regardless of industry, Melton adds, "I have not seen anybody beefing up security, in terms of having metal detectors or anything like that implemented. You would think that we would have seen more of this by now, just witnessing how there have been threats where large groups of people congregated."

But planning is going on, particularly in the financial and insurance industries. "The threat of disaster, terrorism, or medical incidents has been on our radar for the last 15 years easily," says Dan Dolan, an account executive who deals with finance and insurance clients at Creative Group. "I don't think we're unique in having a robust crisis-management plan for each customer that tends to be customized and integrated with its own crisis-management team and plan."

Christine Erickson, vice president of U.S. Event Solutions for BCD Meetings & Events, adds, "Security has always been a major factor in the planning of events for my financial services and insurance clients. Internal security departments are engaged and involved in the planning and execution of every single event."

Maritz's Wilson agrees, noting that his company is now working more frequently than it ever has with financial and insurance clients' security departments.
Reform Without Regulation
For nearly a year and a half, financial and insurance firms have been gearing up for the Department of Labor's new "fiduciary rule," which had been set to go into effect in April. The rule would have required financial advisors and brokers working on retirement accounts to act in the best interests of their clients. That means that the advice they give would be considered "fiduciary" advice -- a much higher standard than the previous "suitability," and one that would leave these companies much more open to legal and regulatory action, as well as class action and individual lawsuits.

"This is the largest trend that I have seen in this space over the last 16 months," says Wilson. "All of our clients spent a significant amount of time and internal investment to really ensure that they understood the rule, and were compliant with it. It did have -- or had -- the potential to have an impact on incentive and recognition travel, without question."

First and foremost, the practical effect would have been to require firms to change their incentive rule structures, Wilson notes. "Speaking generally, what they got away from was focusing specifically on commissions. 'If you hit this number on this product you get to attend' was eliminated," he says. "They are looking at a lot of different things like investor satisfaction metrics, total production across all products regardless of the profitability of one product versus the other, and how much is this advisor contributing to our overall sales."

That rule, which congressional Republicans tried to eliminate last year, was one of the first that the Trump Administration ordered delayed for review. And reports now say it will be revoked before coming into effect. But for all that, it's not certain that financial and insurance companies won't keep many of the changes they've made -- at least as far as how sellers are incentivized -- in place anyway.

"There's been a constant drumbeat in these industries around sales practices and conduct, around risk and fiduciary responsibility," Dolan says. "It remains to be seen what the result is going to be. What we're seeing today is that there's very little change to the meetings and events that we are doing in the finance and insurance segment."

Wilson agrees. "I think the new rules will be adopted by companies," regardless of what the government does, he says. "It's better in that they eliminate conflict of interest. That's what the fiduciary rule is designed to do: eliminate conflict of interest. I think the new design of programs will continue from a travel perspective."


Destination Choice
Both of these two trends -- regulation and security -- are impacting financial and insurance companies' destination choices. While the question of perception issues does still arise in the financial and insurance industries, it's largely infrequent and case-by-case.

"Certainly our industry is one that needs to be careful of the optics, or the perception," Bova says. "Some will say no to resorts or not go to certain areas while others will. To cluster that into a trend, I don't know."

Melton notes that while the U.S. division of one of his clients -- a very large international financial industry firm -- does avoid five-star resorts and casinos, its Asia-Pacific counterpart "has no problems with five-star properties." Nor do other financial and insurance clients.

In this industry, "the criteria for properties remain the same as it's always been: high-quality rooms, ample and flexible meeting space, and excellent service," Erickson says. "For true incentives or any hybrid meeting, what drives destination selection is finding someplace where we can give attendees an experience they couldn't do on their own. You have very wealthy people at many of these meetings, so that can be extremely challenging."

Security is another matter. One form of risk aversion that financial and insurance companies take very seriously is destination choice, particularly international destinations, Dolan says. "They do not want to take any kind of extraordinary risk with a meeting or a larger event," he says. "That may occur on an individual travel basis, if there's a necessity, but in meetings, the location can change very easily if there is the threat of some sort of problem in those countries."   



Questions or comments? Email [email protected]

This article appears in the March 2017 issue of Successful Meetings.

Information Security
There is another type of security that finance and insurance firms take very seriously, and that is cybersecurity.

There's a very simple reason for that, says MaryAnne Bobrow, CAE, CMP, CMM, president of association and meetings management firm Bobrow Associates, Inc. and a frequent speaker on both physical and cybersecurity at meetings and events. "They're where the money is," she says. "They're great targets because it involves banking, it involves the stock market."

Nor is this just a matter of securing the hotel or convention center's Wi-Fi, notes Christine Erickson, vice president of U.S. Event Solutions for BCD Meetings & Events. "This could be anything from apps to hybrid meetings to A/V," she says. "IT security plays such a large role in these verticals that it really affects what is even possible at their events."

At the same time, she notes, "the client relationship is so essential to these companies, that there has always been a great emphasis on ensuring the attendees are able to stay connected to their clients and to their offices in a secure manner."

Cybersecurity is a big topic at Financial & Insurance Conference Planners, says Steve Bova, CAE, the organization's executive director. "I know from working with our members in the past, I can't even hand them a USB drive," he says. "They're not allowed to plug it into their computer."

Dan Dolan, an account executive at Creative Group, notes, "We've often been asked to work with banks' own internal IT security. It affects the products that we're using, which have to meet their standards. Occasionally there may be an omitted feature set, such as a chat feature. They may not upload documents to be downloaded later."

Bobrow adds: "We in the meeting profession need to take steps to make sure that everything we do protects the organizations and their meetings. Many people dismiss it as, 'my IT guy's problem,' or 'my IT department's problem.' No, it isn't. They can't watch everyone."


Reform Without Regulation
For nearly a year and a half, financial and insurance firms have been gearing up for the Department of Labor's new "fiduciary rule," which had been set to go into effect in April. The rule would have required financial advisors and brokers working on retirement accounts to act in the best interests of their clients. That means that the advice they give would be considered "fiduciary" advice -- a much higher standard than the previous "suitability," and one that would leave these companies much more open to legal and regulatory action, as well as class action and individual lawsuits.

"This is the largest trend that I have seen in this space over the last 16 months," says Wilson. "All of our clients spent a significant amount of time and internal investment to really ensure that they understood the rule, and were compliant with it. It did have -- or had -- the potential to have an impact on incentive and recognition travel, without question."

First and foremost, the practical effect would have been to require firms to change their incentive rule structures, Wilson notes. "Speaking generally, what they got away from was focusing specifically on commissions. 'If you hit this number on this product you get to attend' was eliminated," he says. "They are looking at a lot of different things like investor satisfaction metrics, total production across all products regardless of the profitability of one product versus the other, and how much is this advisor contributing to our overall sales."

That rule, which congressional Republicans tried to eliminate last year, was one of the first that the Trump Administration ordered delayed for review. And reports now say it will be revoked before coming into effect. But for all that, it's not certain that financial and insurance companies won't keep many of the changes they've made -- at least as far as how sellers are incentivized -- in place anyway.

"There's been a constant drumbeat in these industries around sales practices and conduct, around risk and fiduciary responsibility," Dolan says. "It remains to be seen what the result is going to be. What we're seeing today is that there's very little change to the meetings and events that we are doing in the finance and insurance segment."

Wilson agrees. "I think the new rules will be adopted by companies," regardless of what the government does, he says. "It's better in that they eliminate conflict of interest. That's what the fiduciary rule is designed to do: eliminate conflict of interest. I think the new design of programs will continue from a travel perspective."


Destination Choice
Both of these two trends -- regulation and security -- are impacting financial and insurance companies' destination choices. While the question of perception issues does still arise in the financial and insurance industries, it's largely infrequent and case-by-case.

"Certainly our industry is one that needs to be careful of the optics, or the perception," Bova says. "Some will say no to resorts or not go to certain areas while others will. To cluster that into a trend, I don't know."

Melton notes that while the U.S. division of one of his clients -- a very large international financial industry firm -- does avoid five-star resorts and casinos, its Asia-Pacific counterpart "has no problems with five-star properties." Nor do other financial and insurance clients.

In this industry, "the criteria for properties remain the same as it's always been: high-quality rooms, ample and flexible meeting space, and excellent service," Erickson says. "For true incentives or any hybrid meeting, what drives destination selection is finding someplace where we can give attendees an experience they couldn't do on their own. You have very wealthy people at many of these meetings, so that can be extremely challenging."

Security is another matter. One form of risk aversion that financial and insurance companies take very seriously is destination choice, particularly international destinations, Dolan says. "They do not want to take any kind of extraordinary risk with a meeting or a larger event," he says. "That may occur on an individual travel basis, if there's a necessity, but in meetings, the location can change very easily if there is the threat of some sort of problem in those countries."   



Questions or comments? Email [email protected]

This article appears in the March 2017 issue of Successful Meetings.