Mergers & Acquisitions Timeline

SEPT 2022

ISSUE 110

ADVISORS magazine

MERGERS ACQUISITIONS TIMELINE AND

CRYPTO AUM: 4 GROWTH FACTORS HEDGING INFLATION, RECESSION WOES ADVISORS BRACE CLIENTS

FOR CONTINUED VOLATILITY

SHAQUAWN SCHASA LAUNCHES NEW WEALTH MANAGEMENT FIRM

ADVISORS magazine

Erwin E. Kantor Michael Gordon Jude Scinta Lucas Rivera

CEO & Publisher Managing Editor Editor-in-Chief Writer-at-Large

Eric Daniels

Billing

Sean Rome

Creative Director

Amy Armstrong Regina Johnson Joe Innace Bill Millar Harold Gonzales

Business Reporter Feature Writer Senior Feature Writer Feature Writer Business Reporter

CONTRIBUTORS & GUESTS Ty Young, Merilee Kern MBA, BPT, Mark Shields, Rick Grimaldi

AN ADVISOR MAGAZINE PUBLICATION Headquartered at: 2598 E. Sunrise Blvd., Suite 2104, Fort Lauderdale, Florida, 33304 (718) 675 4060 Advisors Magazine is published bi-monthly and printed by Magcloud, Inc. Reproduction of any material from this print issue or our digital issue or transmitted in any form of by any means without prior written consent of the publisher in whole or in part is strictly prohibited. ©2022 by Advisors Magazine. All rights reserved.

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2022

contents features 6

32

Hedging Inflation & Recession Woes

40

WealthCare of Healthcare

Modern solutions for modern physicians

Three tips advisors share

10

Strategic Fortune Wealth Management Makes its Debut

Founder Shaquawn Schasa addresses: – An uncertain economy – Donor-advised funds – Income inequality and more

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50

The Push to Contain Inflation

Advisors brace clients for continued volatility

52

Crypto AUM: 4 Growth factors

‘Beyond-the-basics’ blockchain assets under management strategies to spur sector growth

ON THE COVER M&A Timeline

28

Mergers & Acquisitions Outlook: Economic fundamentals in place for investors

34

MADE FOR YOU Our picks from the around the globe

ADVISOR INTERVIEWS 28

Weaponizing Financial Advice Serving those who serve

36

Doubling Down Financial Planning Two advisors are better than one

40

Financial Success for the Masses

Humane approach to planning 44

Financial and Civic Services Plain, simple, and straight talk

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44

Preserve your wealth with CitiTrust’s knowledge and

Financial Management Solutions www.cititrust.biz

i n t e r n at i o n a l i n c .

Belize | BVi | Malta | UK | SaMoa | BrUnei | BritiSh angUilla | CyprUS | giBraltar | iSle of Man | geneVa | JerSey | lieChtenStein | lUxeMBoUrg | United araB eMirateS | China | Switzerland | MarShall iSlandS

By Amy Armstrong

How to Hedge Inflation and Recession Woes Three Tips from Advisors

Record-high inflation rates and the potential menace of recession has left Americans feeling increased economic-related stress.

The Stress in America survey conducted in March by the American Psychological Association and the American Institute of Stress documented that 87 percent of Americans indicated the “rise in prices of everyday items due to inflation” is a significant source of stress. The uncertainty regarding whether the country is already in, or headed to, a recession adds to the anxiety regarding economic security.

Everyday Americans are not the only people that admit they believe the economy may experience further struggles in 2022.

Nine out of ten traders “see” a U.S. economic recession as “somewhat to highly likely” and 74 percent anticipate it will begin this year, according to the latest Charles Schwab Trader Sentiment Survey released for the third quarter 2022.

Even more telling is that within the survey, the percent of traders identifying recession as a “primary concern” tripled in the third quarter at 18 percent versus only six percent in the second quarter.

This isn’t the best news for Americans who are getting burned out dealing with economic troubles.

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However, there are steps to take to help improve one’s odds against inflation and recession.

Advisors Magazine talked to three financial advisors and here are their suggested actions: Buy Real Estate It’s too late to use real estate to hedge against today’s inflation. But perhaps not for tomorrow’s potential inflation. Real estate – and the mortgage most people need to own real estate – has a winning relationship with inflation. For the most part, the purchase price of real estate rises. Of course, there are exceptions – think of the 2008 housing bubble. But again, for the most part, the purchase price of real estate rises.

Here is where the mortgage loan – and monthly payments – work together to create a tool to beat inflation: it’s called equity. Each payment lowers the loan-to-value of a loan debt. The homebuyer gains economic value in the property, but their monthly payment is staying the same.

Ryan Fleischer, CEO,

CIO and founder of Revolution Group in Omaha, Nebraska, uses this economic principle in his effort to hedge his clients monies against inflation.

Noting that his firm did not believe inflation was transitory in 2020 and 2021, Fleischer said, “We increased our positioning to

commodities and real estate assets, especially private real estate and infrastructure.”

The strategy worked, he said.

“I don’t believe we will have a recession this year, but we see storm clouds on the horizon and expect a considerable slowdown starting next year,” said Fleischer. “Our

member will be well-prepared and well-positioned.”

Don’t Freak Out Easier said than done, but here is where the discipline of keeping emotions out of financial decision-making wins against inflation and recession.

“No need to panic,” said Rich-

ard Siegel, managing partner of ARQ Wealth Advisors, LLC, located in Scottsdale, Arizona.

“Recessions are a normal part of the economic cycle.”

Siegel said he and the members of his firm feel that the next recession should be short and shallow ADVISORS MAGAZINE / 7

based on a strong labor market and a strong consumer.

Since 1900, the United States has experienced numerous recessions, including the Great Depression that began in 1929 and officially ended1939. Brief recessions with no long-term impact on the economy occurred in 1949, 1959, 1953, 1958, 1961 and 1961, according to an article on the history of recession at www.bebusinessed.com. Between 1973 and 1975, the United States experienced a stagflation due to the combination of Vietnam War spending, rising unemployment, and increasing oil prices from overseas providers. A six-month recession marked 1980. Three more short recessions in 1981, 1991 and 2001 occurred. Then the Great Recession from 2007 to 2009 coincided with the burst of the housing bubble.

The good news is that the U.S.

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economy recovers post-recession.

Sometimes quickly, sometimes slowly, but growth and recovery do return. So, recession too shall pass.

No need to panic.

Pad Your Cash Account This is a twist on the advice to have three months cash on hand when quitting a job.

“One thing we are advising clients to do is make sure that they have a credit line available to the business, as well as six months’ worth of operating cash if possible,” said David Clayman, CEO and wealth advisor with Twelve Points Wealth Management in Concord, Massachusetts. “This line will protect them in the event that the U.S. economy enters into recession, and they need to cut expenditures to make it through to the other

side.”

Other financial advisors suggest the same six months of cash on hand. Some suggest more depending on the number of breadwinners within the household.

Anna N’Jie-Konte, founder of Dare to Dream Financial Planning, told CNBC that she recommends single-income households aim for six to nine months of cash in reserve.

Amy Arnott, a portfolio strategist with Morningstar, echoes the six months target. She adds an additional slant.

“While cash isn’t a growth asset, it will usually keep up with inflation in nominal terms if inflation is accompanied by rising short-term interest rates,” Arnott also told CNBC. Interestingly enough to Arnott’s point, the Federal Reserve has raised interest rates several times in 2022 with additional increases expected in 2023.

So, if possible, a six-month cash reserve seems to be a prudent move.

Wrapping It Up It is fair to say that inflation and possibility of a recession following on the coattails of the COVID-19 shutdowns has taken the air out of the economic sails of many Americans.

But we do have the choice to make lemonade out of the lemons. Investing in real estate for the long haul, avoiding panic, and opting to boost cash holdings are all actions each person and business owner can make – even if only in small increments – to decrease the negative impacts.

What efforts are you taking to combat inflation and recession?

We’d enjoy reading your comments. Email us at editorial@ advisorsmagazine.com.

STRATEGIC FORTUNE WEALTH MANAGEMENT MAKES ITS DEBUT Founder Shaquawn Schasa addresses: • An uncertain economy • Donor-advised funds • Income inequality and more

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advisor feature written by: joe innace

ADVISORS MAGAZINE / 11

Equity markets have been rallying since mid-June, strengthening through mid-August (the time of this writing). Driving the rebound is a solid corporate earnings season – better than expected – and somewhat cooler inflation.

Bank of America Corporation’s monthly survey of fund managers, released mid-August, showed that investor allocation to stocks rose from the grim lows of July.

The global survey included 250 participants with $752 billion under management in the week through August 11—and 88% of them are now expecting lower inflation in the next 12 months.

“Sentiment remains bearish, but no longer apocalyptically bearish as hopes rise that inflation and rates shocks end in coming quarters,” BofA’s Michael Hartnett said.

“I think we still have some wood to chop,” Shaquawn Schasa, managing partner at Strategic Fortune Wealth Management, told Advisors Magazine in a recent interview. “Even though we see those inflationary prices starting to come down and the stock market is trending is up, we still have to

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make sure that we are preparing ourselves for a possible recession.”

In short, now is a time to remain vigilant and stay focused, according to the founder of the newly formed firm. Armed with 17 years of experience as a leader and financial professional, Schasa opened the doors of Strategic Fortune Wealth Management in June of this year.

The independently owned firm — supported by the vast resources of Securian Financial Services — offers comprehensive financial strategies to individuals and businesses in the Los Angeles area.

In these volatile times, Schasa listens closely to her clients and is still cautious about the possibility of a recession. “We have to be mindful of what we’re investing in and how we’re saving our money,” she added, noting that most clients are not panicking, but are still concerned about the direction of

the economy and the markets.

Her feedback from clients now echoes much of the broader consumer sentiment in the U.S., which improved just slightly in early August. The University of Michigan’s Consumer Confidence Index nudged higher to 55.1 from 51.5 in July.

“Things are calmer now, based on my conversations with clients, but there is still uncertainty about how to proceed,” Schasa said. “For example, I’ll get questions like: ‘Is this a good time to buy stocks, property, a car? Is it a good time to get credit cards?’ So, from just a consumer standpoint, there is still a lot of concern around what to do next.”

And that’s why maintaining close and frequent contact with clients is imperative.

“Now is a time when we advisors should stay in touch with our clients,” Schasa said. “And if

“WE NATURALLY HAVE THE ABILITY TO CONNECT ON A DEEPER LEVEL” you’re an advisor, or if you’re a client or prospective client looking for an advisor, it’s a great time to make sure you understand what your goals are, what you want to achieve and getting your investments to align with your time horizons.”

She added: “So while I do see some relief, the potential for a recession remains and you need

to make sure you’re ready for whatever might happen—which is the same advice I’d give regardless of the current environment.”

Schasa most recently served as a regional director with Prudential Financial in Los Angeles, where she recruited and developed financial professionals, created and led diversity initiatives and increased financial planning adoption. She previously worked as a financial advisor with Met Life/MassMutual, and she began her career with Merrill Lynch.

“Building your own firm to help people financially in your own community is a dream for most financial advisors, so this is literally a dream come true for me,” said Schasa. “I am thrilled to team up with Securian Financial to launch Strategic Fortune Wealth Management and I’m actively recruiting a diverse team of financial professionals to join

me. I am excited to build a firm filled with great people making a difference in our community.”

Schasa’s path to a career in financial services was different than most. She was a director at a telecoms company when it began working on an IPO roadshow with Merrill Lynch leading the campaign.

“I had zero investment experience outside of our employee stock programs,” she recalled. “I really became fascinated with the whole financial services world; I wanted to learn everything I could.”

And she did. Already having a bachelor’s degree in psychology, Schasa set about getting her FINRA Series 7, 24 and 66 securities registrations.

She added: “I knew this new-found knowledge would immediately change my circumstances and my way of thinking – not only mine, but

ADVISORS MAGAZINE / 13

for the many other people from underserved communities.”

Indeed, her financial expertise changed her situation considerably.

The governor of California appointed Schasa to serve two terms on the California Medical Board and she has served as board chair of the Los Angeles Community Development Foundation since 2011.

Confronting income inequality There are countless studies and data today about income inequality and how minority communities tend to struggle financially— both short- and long-term. The median White family has 41 times more wealth than the median Black family and 22 times more wealth than the median Latino family, according to Inequality. org, a project of the Institute for Policy Studies—a Washington DC progressive think tank.

Schasa is determined to get her message out to those who see themselves as underserved or neglected. But it starts with some recognition on the part of the individual to want to make a difference in their financial situation.

She tells them: “If this is something that you want to change, if you say this is a generational curse that I want to break and l want to learn and understand how not to live paycheck-to-paycheck, we can get a plan going for you.”

Strategic Fortune Wealth Management’s services include comprehensive, fee-based financial planning, asset and investments management, insurance protection, estate and business planning, retirement planning, employee benefits and charitable giving.

“Everyone has to start somewhere, and we can meet

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them where they are,” she said.

“Whatever income they have, we can help them determine what the priorities are and how to pay themselves first.” Schasa added.

“It might seem daunting for some because conversations and education around how to save and build wealth are ones they never had in school or at home before.

But it starts by setting that goal and trusting us to help you achieve it.”

Such goal setting does not require a minimum investment from clients of Strategic Fortune Wealth Management.

“The idea of a minimum investment requirement is a stigma that comes along with our industry,” Schasa said. “We don’t have one. I don’t want people to be intimidated or discouraged by having certain levels. I want to support them in moving forward and pursuing opportunities.”

Donor-advised fund opportunities Nowadays, donor-advised funds (DAFs) are philanthropy’s fastestgrowing vehicles, according to National Philanthropic Trust. org, a public charity for providing philanthropic expertise to donors, foundations and financial institutions and advisors.

“The number of individual DAF accounts in the U.S. is above one million for the first time,” noted Eileen Heisman, president and CEO, in NPT.org’s 2021 annual report.

DAFs have gained popularity because they are easy to administer but allow the donor considerable control over where their money goes and how it’s distributed.

Financial advisory firms can offer this service to clients with fewer transaction costs than if the funds were handled privately.

“Donor-advised funds democratize philanthropy by aggregating multiple donors and processing high numbers of charitable transactions,” explained Investopedia. “And unlike private foundations, donor-advised fundholders enjoy a federal income tax deduction of up to 60% of adjusted gross income (AGI) for cash contributions and up to 30% of AGI for the appreciated securities they donate.”

As such, Schasa sees DAFs as being a practical tool for her clients who are already making charitable contributions.

“There are many people who are passionate about charities, churches and other community organizations,” Schasa explained, “and they can be considered as

“BUILDING YOUR OWN FIRM TO HELP PEOPLE FINANCIALLY IN YOUR OWN COMMUNITY IS A DREAM FOR MOST FINANCIAL ADVISORS, THIS IS A DREAM COME TRUE FOR ME.” SHAQUAWN SCHASA

philanthropic investors.”

She noted that regardless of whether a person earns $30,000 or $300,000 per year, if they choose to donate around 10% of their income to a church or charity, they would be an excellent candidate to participate in a donor-advised fund program. Said Schasa: “Why not grow your investable assets to potentially give more -- while also getting a more favorable tax benefit?”

Women in finance The proportion of women in leadership roles within financial services firms has only modestly risen from 22% in 2019 to 24% in 2021, according to accounting giant Deloitte. However, it is projected to grow to 28% by 2030.

Fact is, Schasa is the first Black female managing partner

associated with Securian Financial Services, a broker-dealer and registered investment advisory firm (Member FINRA/SIPC). Securian Financial is providing Strategic Fortune Wealth Management with resources, technology, products, expertise and professional development — same as it does for a network of independent, locally owned firms and 1,100 affiliated financial professionals.

And she will tell you that women have a key advantage in the world of finance. One is in the area of emotional intelligence.

“We naturally have that ability to connect on a deeper level. And when you’re talking about people’s money, it’s not all about intellect, it’s not all graphs and charts and spreadsheets,” Schasa said. “It’s about ‘Where is that coming from?

How do you feel inside about it?

What’s keeping you up at night?’

I just think we uniquely have the capacity to connect deeply on an emotional level.”

For more information, visit: strategicfortunewm.com

Shaquawn Schasa is a Registered Representative and Investment Advisor Representative of Securian Financial Services, Inc. Securities and Investment Advisory services offered through Securian Financial Services Inc. Member FINRA/SIPC. Strategic Fortune Wealth Management is independently owned and operated.

ADVISORS MAGAZINE / 15

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Breakthrough Actionable Strategies

cover story

by regina johnson

MERGERS & ACQUISITIONS TIMELINE:

Economic fundamentals in place for investors

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ROBUST M A R K ET LO O KS TO CONTINUE

ADVISORS MAGAZINE / 19

I

t’s been an amazing couple of years for the mergers and acquisitions market. Despite inflation, rising interest rates, uncertainty over the economy’s direction, and an ongoing war in Ukraine, the M&A market has experienced a wave of activity.

In the U.S., states began to shut down in mid-March of 2020 to prevent the spread of 20 / ADVISORS MAGAZINE

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Covid-19. At the time, M&A market activity had dropped significantly, according to GlobalData, a U.K.-based data, and analytics firm.

The number of announced M&A deals fell from 2,349 in February 2020 to 1,984 in March 2020 globally, whereas the corresponding deal value decreased from $151.2 billion to $129.9 billion.

By the time the world

reopened in 2021, the M&A markets were set to explode.

In 2021, the total global deal value reached $5.9 trillion as investors flushed with cash entered the market, according to Boston-based Bain & Company, a management consulting firm.

M&A activity slowed down a bit in 2022, with aggregate deal value down by about 20%, according to Bain &

Company’s Global M&A report released in July. In the first quarter of 2022, deal value totaled $599 billion, a decrease from Q4 2021’s $970 billion. In Q2 2022, deal values totaled $702 billion in April and May. Since February 2022, inflation has risen sharply, and central banks worldwide have raised interest rates, causing the cost of capital to increase.

But the fundamentals driving the robust M&A market still exist.

First, capital is generally available for deals. Most businesses still have strong cash flows and balance sheets.

Meanwhile, the pockets of private equity investors are as deep as they’ve ever been.

The volatility the markets have seen in the first five months of 2022 will likely continue

throughout the year amid continuing inflation, recession fears, supply chain constraints, geopolitical tensions, increasing scrutiny, and Covid19’s unpredictable path, according to Bain & Company.

Trends in the M&A market Within the M&A market, one trend Bain & Company thinks the industry may see more of is the shift toward “scope and ADVISORS MAGAZINE / 21

capability” deals. A company seeks access to new markets or other complementary services in a scope deal.

Companies attempt to increase their market share in a scale deal in a specific industry. More of these arrangements may take place as C-suite executives work to redefine their businesses as a generational shift occurs, the digital economy grows, and the end of the carbon economy nears.

A longer-term trend is a decline in inter-regional M&A. According to Bain & Company, if countries and economic blocs keep raising barriers, it will continue to change the

David Clark is a Vice President at ArkMalibu, where his prior corporate development, management consulting, and M&A experience allow him to lead clients during all stages of the sell-side transaction process.

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nature of M&A. If tensions ease, more inter-regional may occur.

Three sectors that David Clark, vice president of ArkMalibu, an Ohio-based M&A advisors firm, says his company has been focused on are the transportation, distribution, and staffing industry. The firm believes that there will be much consolidation in those spaces.

“We believe there’s going be plenty of opportunities for us to sell businesses within those three industries,” he told Advisors Magazine.

Clark noted that there are three performance indicators for whether the M&A market

will be hot or cold: earnings growth – where buyers are looking to take advantage of higher earnings to sell – the amount of capital buyers have to put to work, and how easy is it to borrow money to go out and make acquisitions.

The M&A market currently has all three options going for it.

Perspectives on the M&A market Clark said that from where he stands, the M&A market has been bullish since the end of 2020. He characterized the market as volatile, especially over the last six months, describing it as going through a healthy reset after the

growth seen in 2021.

ArkMalibu, a sell-side-only investment bank, focuses on the transportation, distribution, and staffing industries. Clark anticipates there’s room for consolidation in those industries and that there will be plenty of opportunities for ArkMalibu to sell businesses. Most clients are one-time sellers, familyowned, or founder-owned companies.

“What we’re seeing as earnings go up is that multiples of those are valuations on those earnings.

The good news is that earnings growth is outpacing multiple compression,” Clark

told Advisors Magazine.

Multiple compression occurs when a company’s earnings increase but its stock price does not move in response. If a company posts flat earnings, the stock price could fall or drop faster than the earnings. As a result, the price-to-earnings ratio is reduced.

“A lot of people are saying, oh, the M&A market is getting worse because multiples are coming down,” Clark added. “Well, but earnings are outpacing that multiple compression, so it’s still a good time to sell your stock and get a good valuation.”

“Earnings are outpacing that multiple compression, so it’s still a good time to sell your stock and get a good valuation.”

– David Clark

ADVISORS MAGAZINE / 23

Robert Kirkpatrick’s take on the M&A market is that it will remain bullish for his sector. Kirkpatrick, the managing partner of Broadside Advisors LLC, the D.C.-based M&A and financial advisory firm founded in 2016, specializes in mechanical, electrical, and facility services.

“It was a strong market up until March and April 2020,” Kirkpatrick said. “These are essential businesses, and whether people are occupying the buildings or not, they must do maintenance work on them.”

There was a five-month period where work slowed

Robert Kirkpatrick is Managing Partner and Founder of Broadside Advisors, and has nearly 20 years of experience in M&A and capital markets. Prior to founding Broadside Advisors, from 1999-2016 Robert directed the mergers and acquisition efforts at three companies, including two facility services companies that were part of a buyand-build strategy where the owners successfully sold the businesses to publicly-traded companies.

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down, which made the M&A market a little skittish about what was happening, but by late summer, the market picked back up. Investors were interested in doing deals again, according to Kirkpatrick.

“It didn’t come back at discounted valuations. It came back at the same or higher,” Kirkpatrick said.

The sector Kirkpatrick focuses on is particularly enticing for investors, and investment in the facility services market continues to grow, according to Kirkpatrick.

“Investors see a steady business, with steady growth

and relatively good margins, depending on specifics.

For the longest time, the valuations were at a standard range, but recently they seem to have grown extensively,” said Kirkpatrick.

“It’s pretty nice knowing that if I invest in a company that has $3 million in EBITDA this year because of the service model that they do, they probably will have $3 million or more next year,” Kirkpatrick added.

“They’re not worried about the guys that do big work with general contractors and might be doing $3 million this year, $6 million next, or $100 million the year after that.”

Deborah Smith, CoFounder, and CEO of The CenterCap Group LLC, thinks too much uncertainty can impact any industry.

“The longer inflation, interest rates, uncertainty, recession, lasts, the more likely it’ll have a negative impact on the real estate sector,” Smith told Advisors Magazine.

The CenterCap Group is an East Coast-based investment bank with offices in Connecticut and Florida operating in the real estate sector. Smith leads the firm’s Strategic Capital and M&A and Execution efforts.

“On the real estate side, there will be assets that are stressed as opposed to distressed, at least for now.

And it’ll be very marketspecific and properties specific. The more complicated the asset, the more complicated the capital stack, the more likely it will have issues,” Smith said.

On the corporate side, most investors are focused on growth, according to Smith.

“At the corporate level, where people decide to buy and sell an asset is a decision different than how I should grow my business. It’s a different decision-making tool.

And unless you’re relying on debt, which many companies aren’t when acquiring another company, the decision is a little bit different.”

As to whether the Fed’s efforts to combat inflation are having an impact on the real estate’s M&A market, Smith doesn’t see it.

“We do not see a slowdown from that perspective. This year is going to be our busiest year, which was only exceeded by last year,” Smith said. “The markets for us are still very active, and that’s whether it’s foreign capital coming in or domestics looking to figure out how to grow.”

Deborah Smith is Co-Founder and CEO of The CenterCap Group, LLC and heads the firm’s Strategic Capital and M&A and Execution efforts. Prior to forming The CenterCap Group, LLC, Ms. Smith was Co-Head of M&A and a Senior Managing Director with CB Richard Ellis Investors (CB Richard Ellis’s $40 billion AUM investment management business). She joined CBREI in July 2007 to co-head the build out of the firm’s M&A efforts and led the firm’s negotiation and acquisition of a majority interest in Wood Partners (one of the largest multifamily developers in the United States) in 2008.

ADVISORS MAGAZINE / 25

“What we are seeing is that there is a pricing gap because interest rates have moved, and there’s a discrepancy between sellers and buyers, “Smith said. “I think there is a bit of a hold as the market recalibrates.”

M&A markets thy name is resiliency Looking forward, the experts Advisors Magazine spoke to expect another strong year for deal-making because the economic fundamentals are robust. As Clark noted, there will be plenty of M&A activity in the next six months.

“At the end of the day, even if the number of deals starts coming down. There are still going to be assets that are ready to go to market.

Assets that are going to sell for compelling valuation,” Clark said. “There’s going

to be plenty of deals to go around with the high amounts of capital ready to be put to work from those buyers are leading indicators of why we’re confident.”

There will be plenty of M&A opportunities in the next couple of years, even if there is a slowdown due to a recession.

“Capital is at record levels and will be coming up materially over the next 1218 months as buyers are still hungry for deals, he said.

“As the access to lenders becomes more disappointed to the types of investments that they fund and it’s more expensive to go out and get that so if it was more expensive to borrow money to acquire companies, that typically indicates that there could be a slowdown in M&A activity.”

Kirkpatrick expects a little rationalization of multiples in the future, but he doesn’t expect the market to have a severe contraction in terms of deals getting done. A recession, according to Kirkpatrick, will pull the market back slightly, but the facility services market has been steady for the last 25 years.

“The underlying economics of the business is good, and investors want to put money into those good solid, foundational businesses,” said Kirkpatrick.

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I N V E S T M E N T S

ADVISOR FEATURE

BY JOE INNACE

WEAPONIZING FINANCIAL ADVICE

SERVING THOSE WHO SERVE

A

t the end of 2021, there were nearly 1.4 million active military service members across the United States, according to the Department of Defense Manpower Data Center.

What’s more, some 18 million Americans—about 7% of the population—were veterans of U.S. Armed Forces, according to the U.S. Census Bureau.

After retiring from the U.S. Air

28 / ADVISORS MAGAZINE

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Force, one of them took flight on a new career in financial advisory services. And today, Jose ‘Rafi’ Rodriguez, a retired Colonel USAF, advises other vets, active service members, business owners and other individuals, after founding Rodriguez Financial Strategies, based in Beavercreek, Ohio. He’s president of the practice, as well as a Retirement Income Certified Professional (RICP®) and a Federal

Retirement Consultant (FRCsm).

“I was an Air Force officer and got engaged in a lot of planning for weapon systems development,” Rodriguez told Advisors Magazine in a recent interview, “and I realized the weapons-systems planning process was virtually the same as financial planning.”

That process is a four-step one for financial clients. Rodriguez calls it DPIR (for Discover, Plan, Implement and Review), which guides clients through their financial journey.

The firm is proud of its veteran ownership and operation.

R/L: Jose "Rafi" Rodriguez, Colonel (Ret), USAF President, RICP®, FRC Mark Richmond, US Navy Veteran, Financial Advisor

Joining Rodriguez as a financial advisor and partner is U.S. Navy veteran Mark Richmond.

“We deal with a lot of federal employees who are retiring, and our office is right next to Wright-Patterson Air Force Base,” Rodriguez said.

Wright-Patterson is in northeast Dayton and counts more than 30,000 employees, including military, civilian and contractors.

As such, Wright-Patterson is the largest single site employer in the state of Ohio with an economic impact of $4.2 billion per year, according to the AFB’s fact sheet.

“This is our niche,” Rodriguez

added. “We have a lot of potential clients out of the base, and we focus predominantly on Department of Defense professionals and contractors, because most of the contractors around here that work with the DOD, many of them are veterans themselves.”

Rodriguez Financial Strategies is also now garnering more small business owners as clients since they also need retirement services and advice regarding 401(k)s and other special assistance.

“Once in a while we will be referred someone who’s not in this niche, and we certainly take care of them,” Rodriguez added.

“We don’t turn anyone away and we don’t have a firm minimum,” he emphasized.

“We are mainly a fee-for-service model, doing financial plans, coaching, and offering advice and guidance. For doing that, our hourly fee is $150 per hour, but if a person has assets they’d

like us to manage, we would have a separate advisory fee within the portfolio.”

In fact, the practice’s website name—www.askrafi.com— reflects its strength in providing retirement lifestyle solutions and sharing knowledge.

“I saw my parents having a hard time in retirement,” Rodriguez recalled. “And it opened up my eyes when I saw them sacrificing potential retirement savings so that I could go to college.”

He added: “It hit me pretty hard, and I thought maybe their misfortune was something other people also encountered. So, that was the motivation for me to become a financial planner.

I retired from the Air Force in 2004 and set about getting my certifications—becoming an independent fiduciary in 2009 when I launched Rodriguez Financial Strategies. And I’ve been at it ever since.”

Currently, Rodriguez acknowledges that many clients ADVISORS MAGAZINE / 29

2022 Golf Outing

Rafi Rodriguez Induction into Ohio Veterans Hall-of-Fame 2014

30 / ADVISORS MAGAZINE

SEPT 2022

are concerned about the current state of the U.S economy, inflation and the prospect of a recession.

“In these times, we’ve stepped up our engagement with our clients,” he said. “We are reviewing our clients’ risk tolerance to ensure that our portfolio we manage for them – or even within their own 401(k) for that matter—is on the right track.”

Rodriguez Financial Strategies is also encouraging its clients to beef up their emergency savings, as well as conducting and coaching budget reviews.

“We coach our clients to have three buckets,” Rodriguez said.

One is for savings, one is for emergencies and the other is for short-term goals—such as travel, a vacation, a down payment for a car, things like that.”

Part of the savings bucket is to have what Rodriguez calls a management reserve for their portfolios, which could cover any unforeseen variables due to

inflation.

“We’re now recommending, for example, that clients have between $200-$500 to manage the variability in their budget,” he suggested.

It could be more than that depending on each specific case, and if it’s not needed for an emergency, these reserves can be used to fund their portfolios.

“And it’s working. Clients are, in many cases, even putting more money into their own portfolios because they see the value of buying shares at a low cost,” Rodriguez said.

“Everything is on sale right now.”

Beyond his practice, Rodriguez is the current chairman of the board of the United Way of the Greater Dayton Area and spends a lot of time with those less fortunate. He runs an annual golf tournament called ‘Rafi Amigos Golf Outing’ with every penny raised going to local children. He also selects the junior ROTC at the local high school—partly because he’s an ROTC program alum, but also because he knows such students will be this country’s future leaders.

Indeed. From the Air Force to financial planning to his community, a commitment to service runs through Rodriguez’s veins.

For more information, visit: www.askrafi.com/”askrafi.com Securities offered through Securities America, Inc. Member FINRA/SIPC. Advisory Services offered through Securities America Advisors, Inc. An SEC Registered Investment Advisor. Rodriguez Financial Strategies LLC and the Securities America companies are unaffiliated.

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M. Shayne Ruffing, CLU, ChFC, AIF® Founder & Managing Director

BY JOE INNACE

WealthCare of Healthcare

Modern Solutions for Modern Physicians

T

here are some 8.8 million people working in healthcare in the United States, according to data from the U.S. Bureau of Labor Statistics (BLS). The figure includes physicians and surgeons, dentists, anesthesiologists, nurses, physical therapists, radiologists, and dozens more areas of medical specialties.

What’s more, the U.S. Labor Department has noted that five of the 20 fastest-growing industries over the next decade will be in the healthcare and social assistance sectors.

32 / ADVISORS MAGAZINE

SEPT 2022

That’s a lot of high-earners and high-net-worth individuals who already need sound financial advice in a sector with robust growth potential. Riding this healthcare wave is Integrated WealthCare, LLC, based in Durham, North Carolina.

“We have a very focused, physician driven client base,” Shayne Ruffing, founder and managing director of Integrated WealthCare told Advisors Magazine in a recent interview.

“We intend to work exclusively with physicians; I can count on one hand the number of non-doctors that we

have as clients.”

Ruffing, with CLU, ChFC, and AIF® credentials, added that the practice also serves a more narrow and innovative space in certain medical specialties.

“We’re so heavily involved in this one aspect of the professional world that I have long-term clients who have become long-time friends,” he said.

“We’re just really attuned to the culture of medicine.”

Ruffing founded Integrated WealthCare in 2006, following a speaking engagement with a national medical association that made him acutely aware of a developing opportunity, for the right business model. Integrated WealthCare was born as a result.

“Our client philosophy is built around physicians — their culture, their priorities, their language, their fears and concerns, their cash flow model, their debt model and more,” said Ruffing. “And we have deep focus in a few particular specialties and subspecialties.”

Ruffing noted that the practice will identify financial opportunities in the healthcare world that requires collaboration between multiple professionals and then integrate those partners to develop solutions.

“I think where we’ve done a good job overall is in creating business models out of fact patterns,” Ruffing explained.

“For example, the lifecycle of medical training produces a fact pattern, with defined opportunities and pitfalls.

This enables us to create specific roadmaps that really communicate our understanding of our client base.

That deep dive into the facts and assessing the common denominators of being a doctor allows Integrated WealthCare to better create finely tuned financial solutions.

“We’re able to identify all the components of a plan, put them in a process, and just make it very clean and easy to understand how to move from point A to point B,” Ruffing said. We also have revenue models in multiple

areas such as asset management, insurance brokerage, retainer and planning work, other so whatever the client needs, we can work on a solution.

Most recently, Ruffing says Integrated WealthCare has seen a big push by several physician specialties toward independent contractor structures.

“Doctors are very narrowly focused and faced with multiple demands on their time,” he explained. “They are

to go from clinical physician to business owner, more or less overnight.

Of the nearly 9 million healthcare practitioners in the U.S., about 300,000 are located in North Carolina, according to BLS data. But outside of its home base, Integrated WealthCare counts clients in 46 other states. The practice has seven team members in addition to Ruffing and has offers out to two more.

“We have a couple people in our main

“OUR CLIENT PHILOSOPHY IS BUILT AROUND PHYSICIANS — THEIR CULTURE, THEIR TIMESENSITIVE PRIORITIES, THEIR LANGUAGE, THEIR FEARS AND CONCERNS AND MORE.” – SHAYNE RUFFING very good at practicing their particular specialty of medicine, but they don’t often have as much time or experience to run a business.”

He added: “So, we’ve created a process that sets up physicians as independent ‘solo-preneurs.’

We essentially create the business framework, the accounting structure, the employee benefits structure working with their CPA firm, and so on. It’s a onestop shop for independent contractors

office,” he said. “The rest of the folks are based up and down the Eastern Seaboard. So, we’re accustomed to working remotely, which was very helpful in 2020 and 2021.”

He added that the pandemic reinforced the need to keep a sharp focus on the firm’s core offering, but also highlighted the importance of being nimble and flexible.

Like most other financial advisory practices, Integrated WealthCare is big

on educating clients. But since the firm is collaborating mostly with doctors, it is educating the already highly educated and does so in a unique, financerelated manner.

“Physicians are students of science” Ruffing explained. “They live and breathe in an educational environment every day.”

He said that after serving the medical space for almost 20 years, Integrated WealthCare has learned to communicate with and educate clients in ways they are most familiar.

“We use physician phrases; we use the same language that they use,” Ruffing said. “I have regular speaking engagements at hospitals and clinics and am kind of surrounded by the medical community and medical terminology.”

In a relaxed environment, Integrated WealthCare will guide their clients toward a financial solution. “It’s essentially four steps—we articulate, then educate, then guide them through informed decision-making, and then finally we execute in every facet that we can take on for them.

In terms of planning for future financial well-being, Ruffing’s approach is not to invest someone’s money.

“We focus on lifetime cash flow as opposed to investment performance or other transactional data,” he said.

“Performance is certainly an important consideration; but how relative performance impacts individual success is a more valuable metric. For asset planning, we tend to use conservative returns; 6.5% as a pre-retirement return on investment, and a 4% postretirement ROI”.

We separate lifetime from scheduled inflow and outflow and apply reasonable rates of inflation in various categories so that the actual cashflow needs are met.

For more information, visit: iwcglobal.net Advisory services offered through Integrated WealthCare, a SEC-Registered Investment Advisor.

ADVISORS MAGAZINE / 33

made for you

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In a world of fast food and one-size-fits-all sensibilities, how often does something feel made especially for you? The "Made for You" section celebrates those items that are created with such high quality of hand workmanship and degree of customization that they become individual to you. In each issue, our editors will endeavor to bring you special things from anywhere on the globe, choosing them solely on the basis of outstanding quality. Our goal is to give you guidance on the best of everything.

1 BRIGGS & STRATTON — PP10 HOME GENERATOR

The best protection against power outages is a home standby generator. When the power goes out, day or night, a home generator takes over within seconds, keeping all your important appliances including your HVAC system, sump pump, refrigerator and freezer running - Home standby generators such as Briggs & Stratton connects to a natural gas or liquid propane. BriggsAndStratton.com

4 BOWLUS TRAVELR TRAILER — BEST LUXURY RV Step into your Bowlus travel trailer for the first time and prepare to feel a little overwhelmed by all of the possibilities running through your mind. Wake up in the Zen Master Bedroom and make a coffee using the two-stage water filtration system. You can even bring a furry friend along, thanks to this camping trailer’s seamless features: remote temperature monitoring, bowls that slide out seamlessly from a drawer and a coordinated pet bed. bowlus.com

2 BREITLING SUPEROCEAN — HERITAGE II The Superocean Héritage II takes its name from Breitling’s original 1957 Superocean line of watches—iconic diving timepieces that have been catching the attention of watch enthusiasts for decades now. The ceramic bezel is unidirectional to ensure nothing messes up your measuring. And the sapphire crystal is domed and antireflective. It’s available in black as shown above, or silver blue. mrporter.com

5 250 GTO — ANTIQUE FERRARI In 1964, the 250 GTO won the Tour de France Automobile – marking the ninth year in a row that Ferrari won that race. Only 36 of these cars were made between 1962 and 1963; the specific Ferrari that’s the most expensive in the world, at an unbelievable $70,000,000 price point, was victorious not only in the Tour de France, but it also placed in the Le Mans. www.ferrari.com/en-US

3 LORO PIANA BOMBER JACKET — CASHMERE-TRIMMED SHEARLING

6 HEATNGLO — PRIMO SEE-THROUGH FIREPLACE Electric fireplaces like SimpliFire Electric Fireplaces by Heat & Glo can be operated with or without heat, so you can enjoy the ambiance year-round, even during the hottest months. On chilly days or cold evenings, if you want some heat, turn on the electric fireplace so you can get quick warmth in the spaces where your fireplace is located, often a living area of the home. heatnglo.com

Some men’s jackets are just designed to look expensive. Some of them might look incredible but not actually do the job of keeping you warm. Fortunately, Loro Piana’s Cashmere-Trimmed Shearling Bomber Jacket fulfils both parts of the deal: not only does it look soft and suave, but it’ll actually keep you just as warm as its buttery material would suggest. In fact, if there’s one brand that breezily guarantees top-notch quality it’s Loro Piana, thanks to its textile specialism. us.loropiana.com 34 / ADVISORS MAGAZINE

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By Joe Innace

PLANNING DOUBLING DOWN ON FINANCIAL

When two advisors are better than one

For the most part, individual investors and consumers have been encouraged to choose a single advisor to handle their finances.

“While this is certainly a good idea, some clients have taken this a step further by using more than one advisor to manage their money,” noted a recent article in Investopedia.

And what if the two advisors were at the same practice?

Consider the case of San Francisco-based Twin Peaks Wealth Advisors—a practice founded and run by two partners who happen to be twin brothers: Tushar Kumar ChFC®, CLU®, and Vishal Kumar.

“One personalized thing about our firm is that one client can have two advisors serving them, that can make for more productive meetings, faster response times, and more insight,” Vishal told Advisors Magazine in a recent interview. In addition to the brothers Kumar, Twin Peaks counts six other team members.

Vishal describes the current practice as one where clients can have a 36 / ADVISORS MAGAZINE

SEPT 2022

constant, ongoing dialogue with their qualified financial professionals in an easy-toengage manner.

“We predominantly work with young families and pre-retirees, helping them with everything from outlining their household’s cash flow to developing their investment and tax strategy,” he said. “An area of specialty for us is tax-conscious wealth-building strategies.

Our client service philosophy is to over promise and over deliver!” Vishal added. “We believe that in an industry that is constantly raising the bar, the old method of under promise and over deliver is a way of the past.”

The Past Shapes the Future The brothers’ own backstory is what motivates

them. In fact, it was a traumatic family event that opened their eyes to the need for financial planning.

They were only 14 years old when they discovered what a financial planner does.

“Our father, who was the primary breadwinner and financial decision maker of our household, was diagnosed with stage four cancer and only had six months to live,” Tushar recalled. “Prior to his passing, he hired a financial planner to help my mom with this aspect of her life.”

The brothers and their mom, when they first started working with the advisor, were very anxious about their financial future. They all had many questions, hoping to get answers and reassurances about what was

uncertain at the time.

Among the unknowns, according to Tushar: “Would we be able to live in the same house?

Would we be able to go to college without needing student loans? Could my mom retire in the Bay Area with her existing assets and the life insurance proceeds she would receive?”

Their work with the planner allowed them to put a structure and process around the family’s finances with key action steps that had to be taken along the way. By evaluating and modifying the strategy and investments regularly, the family was able to address their mother’s financial goals. The financial planner’s advice moved the family to action with clarity and confidence,

TUSHAR KUMAR PARTNER

Tushar explained.

“Our own story is what drives us,” he emphasized.

“We’ve seen, firsthand, the benefits of working with a planner and we want to bring that same confidence and clarity to the clients we serve.”

Education x Strategy = Clarity In order to provide such clarity, Vishal says each client is educated in a tailored manner.

“In 2019, we implemented an ongoing educational aspect to all of our financial planning engagements,” he noted.

“After we’ve addressed someone’s initial concerns and goals, we pivot ongoing meetings to a hybrid of ‘maintenance’ and education.”

Twin Peaks will develop a

customized education plan for each client, according to Vishal.

“This is where we teach them about financial concepts/strategies that may one day be relevant to them, even if they aren’t needed at that very moment,” he explained.

“This has been met with tremendous appreciation, as clients feel better equipped with knowledge and tools for their evolving financial situation.”

The firm’s approach to retirement planning is simple.

“First, we make sure our clients’ fixed expenses in retirement are covered by their fixed incomes,” Tushar said. “Next, we set up ‘buckets’ for different ages/ goals that our clients will utilize in their retirement.

And last, we help them

VISHAL KUMAR PARTNER

identify what their legacy plan looks like and how they can optimize this.”

With Americans enjoying increased longevity, Twin Peaks employs several strategies that help to build savings and aim to last longer.

“One thing we’re using is incomegenerating investments that offer appreciation potential,” Vishal said.

“Examples of such investments include real estate income trusts, annuities, and dividendpaying stocks. Because interest rates were low for so long, investors have gone up the risk spectrum looking for more yield.”

As far as risk management strategies, Vishal said the approach has been the same as before the pandemic.

“The strategies have been the same pre- and post-pandemic, but we’ve just been putting more into risk-managed strategies over the last two years,” he noted. “Risk-managed strategies include: life insurance, annuities, bonds, and CDs. People are more receptive to managing risk now that liquidity markets are tighter.”

At a macro level, the biggest risk is a possible recession.

“The clients I’m ADVISORS MAGAZINE / 37

actually most concerned about are those age 37 and under, because they haven’t been through a recession before while having a substantial investment portfolio,” Tushar said. “Investors older than 37 have seen at least one recession in which they had some money to lose — so to me, I feel that they are better prepared both mentally and financially for an economic recession.”

Nonetheless, Twin Peaks is taking action to help protect all clients in an inflationary environment and against the backdrop of a possible recession.

Among the measures, according to Vishal:

“Ensuring our clients have an emergency fund; making sure our clients have diversified assets that are lower risk (bonds, CDs, fixed annuities, life insurance), and setting up passive income streams (REITs, etc.).”

The brothers are also planning to take Twin Peaks to the next level by improving client deliverables and visuals even further while building its community.

“We’ve been polling our clients and they want even more insight at their fingertips,” Vishal said. “We’re evaluating more software providers that can provide detailed insight on their situation

“WE BELIEVE THAT IN AN INDUSTRY THAT IS CONSTANTLY RAISING THE BAR, THE OLD METHOD OF UNDER PROMISE AND OVER DELIVER IS A WAY OF THE PAST.” — TUSHAR & VISHAL

and how it can be improved.”

Vishal summarized: “Clients have told us they want the ability to tap into our networks and meet our other clients and professional

relationships. We’re building community through events, social media, email marketing, and introductions to qualified professionals.”

For more information, visit: twinpwa.com

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss. Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.

Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company. Tushar Kumar is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC

38 / ADVISORS MAGAZINE

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ADVISORS MAGAZINE / 41

By Joe Innace

FINANCIAL SUCCESS

FOR THE MASSES A humane approach to planning and advice

Much is written nowadays about income inequality in America. “The average net worth per capita among white Americans is roughly $437,000 per person, whereas this value is $105,000 among Black people and $53,000 among Hispanic people,” according to USAFacts.org.

Humanity Wealth Advisors, based in Newark, California, was founded and fronted by Harry Sherdil. And he’s on a mission to put a dent in such statistics.

Sherdil grew up in India, and at a very tender age saw Mother Teresa’s unconditional commitment to serving those less fortunate.

He also became greatly influenced by the civil rights dedication of Mahatma Gandhi. And after nearly 35 years living in the United States, Sherdil will tell you that Barrack Obama is a source of inspiration and motivation.

“He (President Obama) changed my thinking to think ‘big hope,’” Sherdil told Advisors Magazine in a recent interview.

“That’s what I’m hoping for; that 40 / ADVISORS MAGAZINE

SEPT 2022

maybe one day my small company can become a platform for thousands to break into my industry and do it the right way and earn a decent living.”

As such, Sherdil is a big supporter of engaging those from underserved communities to join the industry.

“One of the biggest challenges facing the financial services profession is a profound lack of racial diversity,” noted The American College of Financial Services in a recent report. “Some 13.4% of the U.S. population is African American, yet only 5% of financial advisors are Black.”

Women and other minorities are also under-represented. “Our industry is a growth industry, but

our head count for financial advisors is shrinking,” Sherdil said.

“There are many opportunities for others and for greater diversity.”

Sherdil’s career started in regional banking, and he then spent 10 years at one of the largest bank brokerages in the country. But there came a time when Sherdil realized his values no longer were in sync with the value of the corporation.

He set out on a path toward an independent practice and launched Humanity Wealth Advisors in May of 2021. “Through our RIA, We’re currently using LPL Financial as the custodian, and we recently signed an agreement with Schwab, so now

28.3% The financial planner industry has an age gap as well. In 2021, only 28.3% of financial planners were under age 40.

Diversity among financial planners has improved slowly. Still, 83% of certified financial planners in 2021 were white and 77% were men, according to the CFP Board.

we are multi-custodian shop,” he said. “Our practice is essentially an advisory- and a planning-based practice.”

After working at a big financial institution, Sherdil realized that the people who really need the help of a financial professional were terribly underserved or not served at all.

And that grated on him.

“To give you an example, at one major institution we were not allowed to take any household that had less than $250,000 with us,” he recalled. “And in 20-plus years in my industry, what I realized is a big chunk of the American populace does not, unfortunately, have $250,000 of investible assets available.”

With so many people still strug-

TO SUCCEED CONSISTENTLY YOU HAVE TO BE SUCCESSFUL IN BEING CONSISTENT

gling financially, Sherdil believes that it comes down to providing information in a straightforward manner: basic knowledge about investing, basic knowledge about retirement, basic knowledge about life insurance planning, and basic knowledge about estate planning and wealth management.

“To succeed consistently you have to be successful in being consistent,” Sherdil likes to say. He emphasizes that financial wellness, just like physical and mental wellness, requires discipline to build good habits consistently over time.

“My goal is not only to impart financial education but also to help build sound financial habits such as budgeting, saving, investing, contributing to retirement plans, taking ADVISORS MAGAZINE / 41

AM spoke with Harry Sherdil, Founder of Humanity Wealth Advisors, to get his take on why diversity lags and what his company is doing about it.

42 / ADVISORS MAGAZINE

steps towards home ownership, and more,” he added.

With this in mind, Sherdil developed a way where he can provide real value to those who are underserved or neglected entirely.

“My answer to this is subscription financial planning,” Sherdil explained.

“Hourly advice, which a lot of the big financial institutions don’t offer.

America is getting comfortable with subscription services. We have subscriptions to Netflix, HBO, so why not a subscription for financial planning?”

Because the practice is subscription-based, there is no firm minimum investment required. “In my new world, I don’t care how much money you have,” Sherdil said. “I want to help people just starting out. If you have little to almost no money, but you have the intent of building a financial plan, you have the intent of working towards financial wellness, then you can simply subscribe.”

At Humanity Wealth Advisors, monthly subscription fees for financial planning can vary based on complexity and periods of time. Typically, however, they start as low as $50 per month and can be as high as $500 per month.

“The beauty is you drive the subscription,” Sherdil explained the

SEPT 2022

appeal to customers. “You pay $50 a month—that gets you two hours of financial advice per year.”

That time can be broken down into 15-minute sessions, half-hour sessions, one hour, or it all can be taken at the outset.

“I believe two hours is just fine,” Sherdil said. “You can at least get a roadmap of who you are, where you think you want to go, and what it would take to get you there.”

He emphasized that he is determined to change the belief that most financial advisors are just salespeople. “I want to break that perception and reach out to Mr. and Mrs. or Ms. America to simply get the conversation started,” Sherdil said. “I am here to start at the ground floor. I will share with you what a basic financial plan looks like. I’m going to help you with simple exercises around budgeting flow. I’ll help you evaluate any retirement plan available at your current employer.”

Sherdil added: “People need to know saving is not a choice. Investing is not a choice, it’s a necessity. Financial planning is not a choice.”

He wants to be a strong advocate for financial literacy—and getting the youth of America excited about all things financial.

Sherdil maintains that he can do that for all like-minded people—while offering his flexible subscription-model services at a reasonable price point.

He genuinely believes this is his best way to use his talent and expertise to help others. And subscribers also get a wealth of data, insight, updates and other value-added content on the Humanity Wealth website.

“If you don’t plan your finances, your whole life – including your health – is going to suffer,” he summarized.

And after being inspired by the likes of Mother Teresa and Gandhi, Sherdil just can’t bear to see people suffer.

For more information, visit: humanitywealth.com

STRAIGHT TALK

by joe innace

Recipe for Financial and Civic Service

M

PLAIN, SIMPLE, AND STRAIGHT TALK

M

any Americans nowadays take part in some form of community service.

The career-expert website Zippia.com, in fact, estimates that there are nearly 122,000 community service volunteers working in the United States, based on U.S. Bureau of Labor Statistics and Census data.

Meet Mike Perros, founder of Encompass Financial Advisors who took community service to the nth degree. He’s also Mayor of Danville, Kentucky—having served nearly eight years with fewer than six months to go.

“After my term as mayor, that will end 40 years of some form of public service,” Perros told Advisors Magazine in a recent interview. “I think I’ve served my time, but I encourage others to give of their time and their intellect.”

He emphasized that involvement is crucial and there’s a need for good citizens to serve on school boards, city councils and other civic organizations.

“People need to get involved

44 / ADVISORS MAGAZINE

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at such levels, but many don’t,” Perros added. “They need to think hard about the sacrifices made by their parents to make things better for their children and communities.”

In the heart of the Bluegrass State, Danville’s population is about 17,000, and in years past has been ranked as one of America’s best places to retire—a perfect location for a financial advisory practice.

Kentucky, in fact, is considered a tax-friendly retirement state.

“Kentucky is wonderful and beautiful,” Perros beamed. “It’s a state of 4.5 million people, which is one-fourth the size of New York City. Many of its communities, like mine, are tightly knit.”

As such, clients of Encompass Financial Advisors do not have to invest a minimum amount in a portfolio.

“I’ve been told by mentors and coaches that I should have a firm minimum, but I cannot bring myself to do that,” Perros said. “Living in a smaller part of the country, word gets around

ADVISORS MAGAZINE / 45

fast. And if you’ve done right by somebody, you’ll get referrals. But the opposite can also happen.”

Perros says he became a financial professional by accident.

He graduated in 1981 from the University of Kentucky after majoring in agriculture and minoring in agriculture economics.

“It boiled down to my fraternity (Delta Tau Delta) experience, which opened up the doors for me and I was smart enough to walk through them,” he said.

Immediately after graduation from UK, Perros worked full time as a Delta Tau Delta chapter consultant. His national focus, involving visits to more than 40 chapters in a single year, led to a broader perspective that still serves him well.

He’s also a graduate of the Securities Industry Institute, a three-year program held at the Wharton School on the campus of the University of Pennsylvania.

Perros also completed a complex six-month curriculum accredited by the Estate and Wealth Strategies Institute of Michigan State University. The advanced courses covered financial planning, estate planning, risk management, and other wealth management strategies. In December 2002, he became an Accredited Investment Fiduciary™ (AIF®), a qualification offered through the Center for

Fiduciary Studies at the University of Pittsburgh KATZ Graduate School of Business.

For almost 30 years he worked with several fullservice firms who paid their financial advisors based on commissions.

“In 2013 I dedicated myself and made a conscious effort to become a registered investment advisor (RIA),” Perros said. “That was a result of a decision I really made back in 2000,” he recalled, “when I was sitting with a

fellow much more successful than me who was an RIA and he explained to me how he conducted his business.”

Perros knew then that an RIA was the way to go. “I saw it as the avenue for much of the industry because RIAs are fee-only and have a fiduciary responsibility to act in their clients’’ best interests. I saw it was a much more holistic way of doing business,” he said. Today, Encompass Financial Advisors is a division of Resurgent Financial Advisors LLC.

“I find that the more you inundate clients with the numbers and the charts and all that, the more of a disservice you do – the more you lose them.”

— MIKE PERROS 46 / ADVISORS MAGAZINE

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Keeping it plain, simple, comfortable Perros maintains that education is vital to his business.

“The more educated your clients is, the more comfortable they are,” he said.

“I find that the more you inundate clients with the numbers and the charts and all that, the more you lose them,” Perros said. “Besides, it’s really not all about the numbers as much as it is setting a course based on the client’s individual situation and goals and fears and dreams.”

Education can also be a two-way street. He noted that working with clients to define their goals and dreams is essential. Equally important though is to understand each client’s tolerance for risk. Investment plans need to incorporate client goals and client risk profiles. Both elements should be monitored and updated accordingly throughout the course of the client’s life.

“Sometimes things change in a client’s situation, and you need to just listen,” Perros said, “and make portfolio adjustments accordingly, if warranted.”

Over the years, Perros has consistently emphasized to clients the need to stay focused on their plan and how their plan will help them in the future.

“As a result, during times like now, the phone calls I get are not ones of panic,” Perros said.

“Client calls are more typically asking, ‘hey, am I still where I need to be?’ And the answer most all the time is yes – unless they have certain situations that occur in their life – a health issue, a major career change, a change in their domestic situation.”

In keeping it all simple, Perros maintains that there are just two types of investments.

“There’s debt and there’s equity. Everything else is just a derivative of those two things,” he said. “And I choose to keep it that plain and simple.

Regarding developing customized plans and solutions for his clients, Perros reiterated that it all starts with listening to the client’s hopes, dreams and even fears.

“It’s easy on my side to crunch the numbers,” he said. “The hardest part I find is getting clients to develop a future budget. I can’t do that for them. I can ask the

questions, but the answers require some long-term thinking on their part and the clients really must engage. I need them to give me a target I need to shoot for. An active and honest dialogue is critical to the process.”

Staying the course The future, in general, appears cloudy given the current state of the U.S. economy, the impact of inflation and the possibility of a recession.

“I think we have to recognize that we are in an inflationary period and anybody that did not see it coming doesn’t study ADVISORS MAGAZINE / 47

the economy,” Perros said.

“You cannot open the flood gates to easy money for years and not have that come back to bite you. Keep in mind, I got into this business in 1982 and I saw what Mr. (Paul) Volcker did in that inflationary period.”

He added: “It’s the same thing that we’ve got going on now—the Fed raising rates, which is the only tool in their toolbox. But Volcker doing that back then, that broke the back of inflation and we’re probably going to see something very similar.”

And does Perros have any special advice for clients in an inflationary environment?

“In my estimation they should do nothing,” he said.

“Some people argue for going to all cash. Well, the problem with that is, if you have a good portfolio and take everything in all cash, you may have just incurred a tax bill.

Thus, reducing the value of your assets. I don’t see much wisdom in that. Additionally, the implication when one 48 / ADVISORS MAGAZINE

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goes to all cash is they know the precise timing to get back into the market. I have yet to see this done successfully. The result is, they miss the markets upward movement if they even invested it back at all.”

Sticking with it also proved especially successful during the pandemic. “Lessons I learned many, many years ago were repeated in 2020-2021, and that is if you have a good portfolio, stay with that,” Perros said. “The negative news does not stay negative forever.”

Nonetheless, Perros doesn’t think today’s inflationary environment is going away any time soon, and that could have a significant impact on those close to, or already into retirement — especially as people are living longer.

“The challenge is to get people to understand that if they start to save at 30 and plan to retire at 65, that’s 35 years of accumulation of assets,” Perros said. “But then they are going to spend the next potentially 30 to 35 years – the same length of

time -- it took for them to build up that financial net worth to support themselves.”

And inflation will erode their spending power over those years.

“There is also the fallacy that people won’t need nearly as much money in retirement, that your spending decreases,” Perros said. “That’s pure fallacy, particularly if they want to have any kind of rewards that retirement brings in terms of travel or a vacation home, or whatever.”

He explains that when advisors and clients start running the numbers—looking at whether their assets can support 30 years of spending in retirement—those numbers often simply do not match.

“So, something has to give,” Perros said. “Either people will try to go back to work; they’ve retired too early, or they’ve got to lower their expectations for that 30-year period of retirement. Neither situation is desired,” he added.

Over the course of his 40year career, however, Perros has observed that those who’ve had comfortable retirements are individuals that had the right percentage invested in equities early on in their careers, stayed in equities, and maintained the right mix of equities and debt securities all through retirement.

For more information, visit: encompassadvising.com

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by regina johnson

The Push to Contain Inflation Will Continue Advisors brace clients for continued volatility

All eyes this week are focused on Wyoming as central bank leaders from across the world meet to discuss economic policy at the Jackson Hole Economic Policy Symposium.

The Chair of the US Federal Reserve, Jerome Powell, warned that the central bank’s plans to bring inflation back down to its two percent goal would come at a cost and burden those least able to afford it.

“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth,” Powell said in a speech Friday. “Moreover, there will likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing 50 / ADVISORS MAGAZINE

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inflation. But a failure to restore price stability would mean far greater pain.”

Powell noted that the campaign the central bank has laid out to restore stability is rooted in lessons in the past.

First, it is the central bank's job to take responsibility for delivering low and stable inflation. Second, the public's exceptions about future inflation can play an essential role in setting the path of inflation. It will if the public thinks prices will come down, barring major economic shocks. If the public thinks things are out of control, that feeds into the psyche and the broader economy.

According to Chairman Powell, the final lesson is that we must keep at it until the job is done because any delay is likely to increase inflation.

The Feds have raised interest rates three times this year. The most recent was in June by 0.75 of a percentage point to a range of 1.5% to 1.75%.

Since the Fed’s last meeting in July, inflation has eased. In July, the consumer price index was 8.5%, down from 9.1% in June.

As the markets consistently go up and down, Jon Shore, managing director of Shore Group Advisors, a Florida-based financial services firm, said the new issue is second guessing your long-term investment strategy.

Shore told Advisors Magazine that he keeps his clients focused on long-term goals and remembering their specific financial plans.

“We put our values in front of our decision making; when doing that, our “why” we invest becomes more intentional and less about the current news cycle – couple this with the smart money philosophy making sure you have a

smart place to make money when you need it so which might mean beefing up your emergency funds,” Shore said.

US markets reacted swiftly to the Chairman's speech hinting at more aggressive rate hikes. The Dow declined 3%, S&P 500 fell 3.3%, and the Nasdaq was down 3.9% at the close of the day.

Following the Chairman’s speech, some were asking, even if inflation goes down just a little, why would the Fed continue raising rates?

Economist and former chief executive officer of the Federal Reserve Bank of New York William C. Dudley who served during the Obama Administration said getting a little done wouldn't do the job.

“Because getting inflation down to 4% is not getting the job done,” Dudley said in an interview with Bloomberg. “If the Fed quits, let's say, with inflation at 4%, inflation expectations will become anchored, and then the Federal Reserve will just have to do more in the future.”

Given Chairman Powell’s belief that

the central banks still have more work to do, some financial advisors are continuing to prepare their clients for a volatile market.

Brook Scardina, managing partner, capital markets and investments at Michigan-based Oak Real Estate Partners, has been preparing his clients for such aggressive actions by the Feds.

The company’s investment process incorporates a proactive approach to anticipating best-case and worst-case market scenarios.

“As a result, we have already begun to discount between 5%-7.5% of the modeled exit values of the properties,” said Scardina. “This, coupled with the low loan-to-value, provides a high margin of safety against the permanent impairment of capital, which protects the underlying investor. Our assumptions and institutional level underwriting are designed for a 2008-type of market environment.”

Regarding the Feds, Scardina believes the trend of rate hikes will continue until it is in a position requiring it to cut rates based on slower economic growth and a recessionary climate.

According to David Clayman, Co-founder, and CEO of Twelve Points Wealth Management, a Massachusetts-based financial services firm, inflation is close to peaking, and prices will ease.

Clayman advises his clients to have a line of credit for the business and six months of operating cash available.

“This line will protect them if the US economy enters into recession and they need to cut expenditures to make it through to the other side,” Cayman said. “The line could also provide them with an opportunity to acquire competitors who were not so well prepared, allowing our clients to come out of any potential recession bigger and stronger than they are now.”

ADVISORS MAGAZINE / 51

By Merilee Kern

CRYPTO AUM: 4 GROWTH FACTORS ‘Beyond-the-basics’ blockchain assets under management strategies to spur sector growth

The proliferation of cryptocurrency investment products continues at a rapid pace, encouraged by burgeoning sector acceptance and adoption—seemingly in spite of this category’s famed volatility. Since the inception of cryptocurrency in 1990, the number of decentralized digital currencies has skyrocketed to more than 12,000—with more than 1,600 listed on major, middle-sized and specialist exchanges.

Today, crypto investment funds reportedly boast a staggering $30.2 billion collective total Assets Under Management (AUM), with international digital asset managers now holding $19.3 billion worth of Bitcoin and around $7 billion in Ethereum assets. While the fund manager market continues to lean on Bitcoin and Ethereum to drive sector stability, other coin types are capturing the minds, hearts and wallets of diversification-minded investors—individuals, businesses and governments, alike. This as the professional asset management community increasingly turns to lesser-known crypto options in search of sustainable DeFi opportunities that will resonate with both traditional and progressive investor sensibilities.

Given AUM represents the overall market value of investments overseen by a fund manager on behalf of their clients, it’s key for investors to understand the daily fluctuation nuances of this metric as it pertains valuation, flow, price and more. This kind of knowledge can fortify the investor mindset and resolve to stay the course in tumultuous sectors, in particular. This is why understanding AUM dynamics is especially important for more turbulent alternative investments like cryptocurrencies.

According to Devon Drew, CIMA, Founder and CEO of DFD Partners—a data driven distribution platform with ambitions to parlay crypto and other alternative investment strategies to accelerate diverse and smaller fund manager AUM by $1 trillion by 2030: “ Alternative asset managers gaining a more in-depth understanding of crypto-sector AUM impacts can spur both short term and sustained indi52 / ADVISORS MAGAZINE

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vidual and collective portfolio growth. There are a number of ‘beyond-the-basics’ AUM strategies that can help spur this alternative asset manager growth. This is especially critical since AUM is often a key consideration for firm fee calculations, with some using a fixed percentage factor tied directly thereto.”

Here are Drew’s expert insights on four areas he feels are especially impactful: Macro Sentiment The macro sentiment for crypto is arguably at its lowest point since 2018. All too many crypto-driven projects and smaller blockchain-oriented asset managers have run out of capital and marketing budgets have dried up in kind, causing many to close shop. But, as the old Warren Buffet saying goes, “... be greedy when those are fearful.” That philosophy might be prudent for those with a mid-to-long term mindset and can financially and emotionally weather the short-term storms. Amid the sector strife, now could be a very attractive entry point for investing in crypto funds. Institutions have already started providing access to crypto investment options, as evidenced by the partnership between BlackRock and Coinbase. Asset managers should still remain mindful of crypto sentiment indicators and keep close tabs, so portfolio allocations can be throttled in kind.

Emerging Tech The top trending emerging tech that will help attract future investments in crypto is Blockchain-as-a-Service (BaaS). Companies like Microsoft and Amazon have already implemented BaaS, which will act as a third party cloud hosting service enabling even smaller companies entities with limited IT resources to more easily create digital products using blockchain fundamentals. TrustRadius.com points out that, “Similar to software-as-a-service, blockchain-asa-service lets businesses get applications up and running with minimal hassle. This allows higher agility and quicker blockchain adoption.”

Patent Trends As asset managers and other financial industry professionals attempt to educate themselves on crypto dynamics, as well as that for the underlying blockchain technology, those “in the know” are leaning on the many-use cases for insights and inspiration. In 2016, there were just three blockchain patents—a number that was nearing 10,000, according to one 2022 report, and the applications just keep coming. IBM is reported to leads the pack with 345 blockchain patent applications and with both Bank of America and Capital One Services among the top 10. As more banking and finance companies substantiate crypto and blockchain use cases, category adoption will continue to escalate ... boding decidedly well for crypto VC fund ADVISORS MAGAZINE / 53

AUM growth. Uncovering and leveraging patent trends can also encourage maximized “first mover” advantage—a competitive edge that can prove mission critical for a developing crypto business and those who invest in them.

Inflation Impacts Similar to gold, which is often regarded as an “alternative currency,” crypto was similarly thought to be an inflation hedge. Results throughout 2022 have proved that assumption to be incorrect as crypto got crushed along with all other high-risk assets.

On the flip side, with the Consumer Price Index (CPI) at a 40-year high and inflation still sky high, investors are increasingly seeking “out-of-the-box” ways to drive risk adjusted returns that outpace inflation. Given the depths that the crypto market has fallen of late, and will likely continue to do so amid macroeconomic concerns, crypto investment funds can capitalize on the pricing opportunity to create well-diversified portfolios to add stability and serve as a foil against inflation when it’s predominantly caused by factors like 54 / ADVISORS MAGAZINE

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monetary expansion. In fact, amid the release of the Federal Reserve’s July meeting minutes citing inflation as still "unacceptably high" and indicating it would continue to raise interest rates to stem inflation, prices for both Bitcoin and Ethereum dropped 2.4% and 2%, respectively, for that day.

Drew certainly has front-line perspective on how to drive AUM, given his own impressive track record in financial services. This includes becoming one of the Vanguard Group's most successful executives in their financial advisor services business, having raised more than $20 billion from wealth managers, raising assets in Vanguard's ETF and active mutual fund categories. During his earlier tenure at American Century Investments and Alger, he raised over $2 billion from institutional and intermediary investors.

Prior to that, at JP Morgan Chase and Merrill Lynch, he managed the financial well-being of his clients and received exposure to traditional investment products, including alternatives such as private equity, hedge and real estate funds.

Now as the Founder and CEO of DFD Partners, the company’s SaaS platform is allowing smaller asset management firms to effectively scale by leveraging data, automation and machine learning tools that allow them to more effectively compete—both with larger firms and in the global marketplace at large. In many cases, the managers who are part of this platform identify as diverse in gender, background asset type and generation.

The management of crypto assets is distinct from other forms of financial management because these are digital assets that are tokenized via a blockchain and must be tracked, bought and sold based on real-time data to ensure successful portfolio performance. While cryptocurrency remains volatile and isn’t appropriate for every investor, the class does offer diversification and other wealth building and protection benefits. A truth that’s driving the fund management community to take on DeFi in droves.

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