Page 13

BANKING SPECIAL REPORT

& WEALTH MANAGEMENT

Blue Ocean’s Sarenski discusses how things have changed since recession, market downturn BY ADAM ROMBEL JOURNAL STAFF

SYRACUSE — Theodore (Ted) J. Sarenski, president and CEO of Blue Ocean Strategic Capital, LLC in Syracuse, says the 20072009 financial-market downturn, when stocks fell by more than 50 percent, caused substantial changes that still ring true today, including clients’ behavior. But other things, such as his firm’s approach to making investment decisions, have stayed the same. Sarenski, a CPA and CFP, discussed this and other topics on the July 17 episode of the “Financial Fitness” program on WCNY-TV, with show host Vicki Brackens, owner of Brackens Financial Solutions Network and a chartered financial consultant. Here are some of the highlights from that discussion. What’s different now than in 2007-2009?: “Our clients have a much different expectation of what can happen, since they’ve

been through this recently, than they had maybe prior to that. The 2000-2002 time period, when the market went down there, didn’t affect them as much as this 20072009 drop did,” Sarenski said. “[Clients] thought, oh maybe things were overvalued in the 90s. But the 2007-2009 period was such a drastic drop for unknown reasons if you will — that people have this uncomfortable feeling. And yet, [they] have now realized we can’t expect 10 and 15 percent returns in markets consistently.” What did you mean by the market fell for unknown reasons that people didn’t understand? “It wasn’t about the fundamentals of companies. The companies were still making profits. People were still going to work,” Sarenski said. “Nothing appeared to be different, yet the market was falling, because our underlying investment system, our banking system, our system of loans … got disrupted. [It caused] a dry-up of cash. It’s not

something we saw on a day-to-day basis.” What else is different this time? “People are actually looking into saving a little more than maybe they had in the past… Now there’s more of a concern of am I putting away enough money to have a retirement,” Sarenski said. Also, retirement is changing. “Maybe I thought I was going to retire when I’m 65, [clients say]. Then this happened, and I did lose money. Maybe now I’m not retiring until I’m 68 or 70. Then the concern is … am I going to be healthy enough to work until I’m 70,” Sarenski said. What is still the same? “What’s the same, in terms of what we’re looking at, is we’re

still analyzing companies and funds the way we did before,” Sarenski said. “It’s still are they making a profit, what’s their price to earnings ratio, how do markets affect [them]… Looking at the fundamentals of companies is the same as we did then.” “Again, the market fell for reasons that had nothing to do with that. What we did then in terms of analyzing investments is what we’re doing today in analyzing investments,” he added. What is the concept of the market “climbing the wall of worry” all about? Sarenski said investors have many concerns right now such as events in the Middle East, our economy pulling back in the first quarter, etc.

“The market is crawling on that worry to a higher level than it was at the beginning of the year. It’s that underlying worry that we have about all these things that could affect the market but yet haven’t affected the market… It’s that market rising despite the occurrence of “something that should really be bad news,” Sarenski said. “And in times when people are not worried, that they think things are great, that’s the time to worry,” he noted. To see the full discussion between Sarenski and Brackens, please visit http://video.wcny. org/video/2365291261/ q Contact Rombel at arombel@cnybj.com

Community Bankers group takes on regulatory burden One particularly cumbersome requirement is the “quarterly call report” BY TRACI DELORE CONTRIBUTING WRITER

L

ike its fellow community banks, Tioga State Bank is a locally owned and operated financial institution that reinvests, within the communities it

serves, the dollars people deposit. And just like its fellow community banks, Tioga State Bank is feeling the growing burden of regulatory requirements. One particularly cumbersome requirement is the “quarterly call report” required four times a year. The call report was the subject of a recent survey by the Independent Community Bankers of America (ICBA), a group representing more than 6,500 community banks across the country. Tioga State Bank participated in the survey. The ICBA released the results of its survey on July 9 and

the results were not surprising. Community banks report that the required quarterly call reports are taking up more time and resources than ever. “Main Street community banks do not have large compliance teams to keep up with increasing government red tape, which means resources they devote to those reporting requirements cannot be used to promote local economies,” Terry Jorde, ICBA senior executive vice president and chief of staff, said in a release announcing the survey results. “ICBA’s survey clearly demonstrates the need for a shorter

and simpler call report sure the report is done for smaller, less complex correctly, she notes. institutions.” With less than “This is a monster $500 million in assets, of a report to do four there are some questimes a year,” says Anne tions TSB doesn’t have McKenna, senior vice to answer, McKenna president of finance and adds, but the employcontrol at Tioga State ees compiling the reMcKenna Bank (TSB). In the past port still need to read six years, the report has through the entire packgrown from 40 pages of ques- et to learn which ones they can tions to 80 pages — with each leave blank. page containing about 20 quesThe end result is about 60 hours tions covering all financial aspects of staff time — just in the finance of the bank. On top of that, the department — four times a year call report comes with about 700 See SURVEY, page 10B pages of instructions to read to en-

080114 flip  

Digital Edition of the 8/1/14 Business Journal

Read more
Read more
Similar to
Popular now
Just for you