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Departing Beck Key to Fluno Center's Success

By Brian E. Clark

With savings rates for Americans at an all-time low Ė even in negative territory Ė Ted Beck is going to have his work cut out for him in his new job.

Beck, who has been associate dean for executive education and corporate relations at UW-Madison since 1999, will take over next month as president and CEO of the National Endowment for Financial Education.

Beck, 52, said the non-partisan Denver-based foundation is perhaps best known for its high school financial planning program that 3 million students have gone through in recent years. The foundation also has many programs for adults.

ďIíll miss this place, but I like challenges and Iím ready for a new one,Ē said Beck, who earned his MBA at UW-Madison and went on to a career with Citibank.

Beck returned to Madison his alma mater in 1999, a year before the opening of the $25 million Fluno Center for Executive Education.

Business School Dean Michael Knetter praised Beck for his work.

ďUnder Ted's watch the Executive Education programs at the Fluno Center - both custom and public programs - first survived a difficult period in the wake of 9/11 and the ensuing recession, and now have thrived as the economy has recovered,Ē he said.

ďThe business skills that Ted developed in his 25-year career at Citigroup, prior to joining the business school, have been critical to the success of the Fluno Center.Ē

WisBusiness Editor Brian Clark interviewed Beck shortly after his decision to move on was announced.

Brian Clark: What is NEFE?

Ted Beck:
NEFE been around since 1979 and its aim is to foster financial literacy and understanding in what is called the ďunderserved market.Ē

As a high school program, it partners with a whole bunch of organizations, the Red Cross, the NCAA to the Urban League. It tries to build a curriculum to use in their groups to learn how to look after themselves financially.

It also does a lot of think-tank work and funds research at different universities on trying to change behavior so that people will take responsibility for their financial future earlier and take advantage of what is available to them.

If you think about the potential changes in Social Security and what has happened with pensions, there is the assumption that people will be able to make decisions. But there are gaps in that understanding and NEFE is the largest non-partisan provider of that information.

A lot of the financial education information now comes from people who are selling things, which is what I did for years. Their goal is to educate Ė and to sell.

What NEFE is about is trying to educate people so they can make intelligent decisions.

Clark: What enticed you to make the jump from Madison?

There were a couple of things. Financial literacy is a huge area of concern and it combines my financial background with the academic side. It is a nice fit for me.

Plus, I had accomplished the things I wanted to accomplish here. It was a good time for a transition.

I came across NEFE when I was putting together a program together on wealth management. Their founder, president and CEO is retiring. Thatís how the conversations got going.

I think it will be fun to be in charge of the program there.

Clark: What are the things you accomplished here?

First, we wanted to get the building up and have it become self- sustaining. It has now reached that stage. (This year, for the first time, the center will make a $250,000 cash distribution to the business school.)

I wanted to get national awareness and respect for our exec. ed. program. I wanted it to be a major resource for the business school both financially and reputation-wise. Weíve done a lot of that.

So it was a good break point for me. Plus, it came at a time when the kids are either grown or away at school.

Of course, there is still plenty to be done here. But there is a momentum here that I am confident will continue.

If you are really lucky in life, you get to have a lot of challenges. This was such an intriguing opportunity, that I decided it was time for another adventure.

This will be my third career. First was banking, second university and now non-profit.

I got my MBA here and itís been good to work here. But now Iíve ridden that pony and am ready to move on.

Clark: How old are your kids?

My oldest just turned 23 and is an officer in the Navy. He just returned from the Middle East and was on a destroyer in the Persian Gulf.

I have another son who is starting his senior year at the University of Colorado at Boulder, a daughter who is starting her sophomore year at the University of Vermont.

And we have a 16-year-old daughter who is at the Conserve School, a boarding school in northern Wisconsin.

Clark: With your background, have your kids learned good financial management habits growing up?

I would say yes. My wife is a retired banker. Both of our fathers were bankers. Theyíve been exposed to it, with varying degrees of interest.

But even when you are in a household with a lot of financial training, you forget that they donít know it yet. There have been moments when they surprised me with what they know and what they didnít know and still need to learn. And thatís why I think the stuff that NEFE does is so important.

If you look at our university freshman and the credit card issues they face, you can see there is a lot of education needed that we can help with. I see it with my own kids. They need to be taught, it doesnít come through osmosis.

Clark: Savings rates are extremely low, in negative territory even. Why?

Putting off savings seems to be a natural tendency. Itís been pretty well studied. We all procrastinate. Now, especially with young people, there is a strong desire to have it now, even if they donít know how they will pay for it.

Anything that can be done to help that understanding is good for everyone.

Savings rates are much lower than other parts of the developed world. You hear all sorts of statistics. In general, people are not saving.

If you look at a lot of people who are approaching retirement, they are cashing in on real estate gains. But you can only do that once.

If you start saving early, you will be a whole lot better off. But most people arenít doing it.

Clark: What does NEFE teach in its programs, things like the importance of putting away money early and how compound interest works?

Yes, and the importance of having a budget and understanding the costs of using credit to acquire things.

I was a banker for 27 years and I think it is perfectly OK to borrow to do things. But you have to understand the full implications of what you are doing. Thatís what we are tying to teach. Itís fundamentals.

Weíre also very concerned about the number of people who donít sign up for 401(k) programs through which their employer gives them matching money to save. There are a lot of people who choose not to do that.

Clark: Why do you think people donít take advantage of 401(k) programs? Because they want to have it all now?

I think that is part of it. In addition, finance can be very intimidating. If you sign up for an investment plan, you might have pages of options. It can be scary. Part of it is trying to simplify the understanding.

Our programs cover what it costs to borrow and what the options are for saving money. Unfortunately, I think we overwhelm people.

Iíve been a finance geek my whole life, but when I look at the number of options I have in my retirement plans, they can be numbing. ...

Clark: How has your time been here at the UW-Madison Business School?

It has been quite good. Iím very happy with the way the business school is going. Mike Knetter is doing an excellent job as dean. So Iím going out as a cheerleader.

After a respectful rest period, I hope to become active on boards or advisory groups to help the school.

Clark: You are leaving one level of education aimed at business executives, which are a lot of universities are pursuing, and moving to perhaps a neglected area. Did that attract you?

Yes. If you look at what is going on in financial literacy world, the chance for NEFE to become a leader is pretty high.

It is not partisan and it has an endowment of about $135 million, so it has independence. It will still have to partner with a lot of organizations.

We also have to figure out how to influence changes in behavior. It wonít happen overnight. Youíve got to get people comfortable with financial understanding in the all different stages of their lives. There is a lot of work to do.

Clark: What is your impression of how the Wisconsin economy is doing?

I think the Madison economy is doing very well because of the university and its spin-outs. I think the university could become an incredible engine to generate business growth in this immediate area.

The drawback is that there is a lack of capital. People are aware of that lack, but I donít think they realize how potentially serious that is. Efforts to attract capital, not only from the Midwest but nationally, is something that the university is starting to pick up on.

It is much easier to attract larger pools of venture capital elsewhere, so that is something we need to work on. Elsewhere in the state, the growth is about average. But Madison has the potential to really accelerate because of its brain capacity, if you can solve that capital problem.

Madison also needs to attract strong management because the scientists often want to stay in their labs. Attracting people who can attract those high-growth businesses is a challenge.

Maybe the university can help by bringing graduates back. But we are seeing nowhere near the depth of the (management) resources we need.

We need to raise the awareness of Madison. When I talk to folks I know around the country, I tell them about the number of opportunities here and the technology transfer that is going on here. They are surprised, because there is the assumption that is only going on on the coasts.

They acknowledge the scientific skills of this campus, but they just donít know about the business opportunities here.

Clark: Do you think there is any resistance to that kind of growth here?

Some folks don't want Madison to become too much of of a business community. So people have to get comfortable with that because Madison has that potential to really attract the financial and management resources for that growth.

Clark: Sometimes Austin, Texas Ė home to the University of Texas -- is mentioned as a model for Madison. Is that realistic?

That is usually said in a negative context because Austin is suffering from significant sprawl. So you have to manage that potential growth because you want to attract and retain the scientific community as well.

Clark: Are you concerned about the political climate in Wisconsin and how efforts to limit stem cell research could dampen interest in investing in scientific businesses here? Or that top researchers like James Thomson might go elsewhere?

That is a national problem. If you at what other governments are doing to sponsor stem cell research, we are lagging. There is a pretty significant effort out there in places like South Korea.

Certainly, California is putting a lot more money on the table than we are, so the debate is national. But there is a global issue that is even larger.

We should be making every effort to attract the best scientific talent we can in all areas, including nanotechnology, which has been in the news lately. And there are some strong players locally who could become real engines for growth.

Now thatís exciting. And I kind of wish I could be around to see that happen. So Iíll be visiting.

Clark: Any other thoughts about the university?

I think it will be facing some interesting challenges in the future, but I think administrators have a pretty good game plan put together.

I am very happy with where the business school is going and I think executive education has a lot of upside. I still think one of the hidden opportunities for the university is to turn Madison into an educational hub (for executive education).

Once people get here, they really enjoy Madison. They combine the educational component of what we do in a top-notch college town.

Now that is a good business proposition because people come in, they enjoy the city, they eat at our restaurants and they say they want to come back. They are the ideal visitors. The more we can make Madison that educational hub, thatís a big upside Ė especially for downtown businesses.

We have a unique footprint. People can walk all over and itís safe. When we talk to organizations or companies, repeat sales are very easy.

An intelligent game plan to expand that effort is in everyoneís interest. But Iíve been saying that since I got here.

Iím also proud that the Fluno Center created 100 new jobs. It has been a tough sell generally for exec ed programs for the past few years. But because of interest in the Fluno Center, among other things, we never suffered that downturn.

I believe whoever replaces me will inherit a pretty good situation. Itís certainly better than being run out on a rail.


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