exclusive interview with robert herjavec amanda brinkman
SMALL BUSINESS REVOLUTION
New Federal Overtime Law
Impacts Small Business Owners
Wall Street Variable Expenses Turn into your Fixed Costs
Wells Fargo Scandal
A Mockery of Their Corporate Vision
ISSUE 75 | NOV 2016
Publisher Erwin E. Kantor Managing Editor Michael Gordon Editor in Chief Helen Moss Editorial Robert Jordan Sean Goldstein Rachel Feinstein Peter Greenberg Writer-at-Large L.A. Rivera Staff Writers Robert Jordan A. Marie Velthuizen Jude Scinta Amy M. Armstrong Annabelle Preston A.M. Lehner Contributors Steven Selengut John Swanciger Illustrators Paul Kales Steve Delmonte Steve Smeltzer Norman Jung Marketing / Advertising Sean Rome Eric Daniels For advertising inquiries, contact: firstname.lastname@example.org No part of The Suit Magazine may be reproduced or transmitted in any form of by any means, without prior written consent of the editor. Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore The Suit Magazine cannot be held responsible for such variation.
Corporate America Opened Path For Trump Victory
ow that Corporate America has given Donald Trump his victory. Let’s see how this corporate entrepreneur handles the White House come the new year. Obviously, the markets took pendulum swings, back and forth, soon after Trump won the election. The reports didn’t lie: The stockmarkets dipped as the results appeared, then quickly bounced back. The Republicans won the White House, and took the House and Senate. On Wallstreet, trading accelerated, particularly with gold and the Japanese yen. After the dust settles in 2017, and Trump takes over the Oval office—it’s all about performance. Can he deliver the goods? Meanwhile, the cover of The Suit Magazine has exclusive interviews with Robert Herjavec and Amanda Brinkman highlighting their new series, The Small Business Revolution. Watch the original eight-episode series about one small town’s revival, featuring Deluxe Corporation’s Amanda Brinkman and Shark Tank’s Robert Herjavec. Take a look at Jude Scinta’s inside story about the Small Business Revolution. We also have feature that a sharp look at how Wallstreet turned their variable expenses into your fixed costs. Who do you think took more business, economics, and accounting course in college, regulators or Wall Street executives? Read story on page 8. There are new federal overtime laws taking affect soon. John Swanciger CEO of Manta reports, the U.S. Department of Labor’s (DOL) has implemented new overtime rules, beginning Dec. 1, 2016, every salaried employee making less than $47,500 will
receive time-and-a-half pay for every hour they work in a week beyond 40. And then there’s the overtime woes of the Department of Labor, violating its own labor laws has cost the federal Dept. of Labor a tidy $7 million. In 2006, the American Federation of Government Employees Local 12 filed a collective action complaint against the DOL asserting that it had misclassified nonexempt workers as being ineligible for overtime pay. Read our reporter’s story on page 15. One of America’s biggest companies faces public scorn and embarassment. Apparently, the Wells Fargo scandal, involves America’s largest bank scams which has robbed the public of hundreds of millions of dollars. It’s a mockery of their corporate vision. Wells Fargo devotes a series of digital pages on their website to convey their commitment to their corporate vision which states: “We want to satisfy our customers’ financial needs and help them succeed financially.” That vision has broken trust. Read our reporter’s story on page 20. Good wishes to Donald Trump and enjoy your Thanksgiving this November.
Erwin Kantor Erwin Kantor, Publisher
How Wall Street Turns Their Variable Expenses into your Fixed Costs
who do you think took more business, economics, and accounting courses in college, regulators or Wall Street executives?
New Federal Overtime Law
Overtime Woes for DOL
John Swanciger CEO of Manta reports; The U.S. Department of Labor’s (DOL) new overtime rule is simple: Beginning Dec. 1, 2016, every salaried employee making less than $47,500 will receive time-and-a-half pay for every hour they work in a week beyond 40.
Violating its own labor laws has cost the federal Dept. of Labor a tidy $7 million. In 2006, the American Federation of Government Employees Local 12 filed a collective action complaint against the DOL asserting that it had misclassified nonexempt workers as being ineligible for overtime pay.
The Small Business Revolution
“It doesn’t matter where you’re from, it matters what you do with what you’re given.” said Robert Herjavec to the residents of Wabash, Indiana as he stood at the podium at a town meeting earlier this summer.
Wells Fargo scandal:
A mockery of their corporate vision. Wells Fargo devotes a series of digital pages on their website to convey their commitment to their corporate vision which states: “We want to satisfy our customers’ financial needs and help them succeed financially.”
pg4. THE SUIT MAGAZINE - NOV 2016
BUSINESS / FINANCE
23 Investing As Process
38 An Educating Fiduciary
24 Retiring With Freedom
40 Fiscal Literacy Builds Better Business
Don’t Go to Divorce Court without Coaching 26 Forging the way forward
Don’t Leave Risk to Chance 41 A Risk Number System Quantifies Date for Each Stage of Life
29 Try and Fail, But don’t Fail to Try
42 Put Your Clients First
32 Factor a Client’s Goals
44 Sheepskin Earns Entrepreneur
33 A Fiduciary Shift
45 Plan Ahead For The Unexpected
34 Giving Clients Their Own Board of Advisors
46 Coaching The Coach
37 A Steward of Good Faith
48 Honesty Is The Only Policy
Financial guru looks at long-term wealth building
Front-end planning prevents sleepless nights
Saving – the most crucial element of a successful retirement plan
Into the portfolio’s desired rate of return Fee-Based Planning Reduces Conflict and Assures Best Practices for Clients
Taking a strong cue from their counterparts, financial services practitioners in the medical field Investing with Christian-based Principles
Viewing his role as a client educator
Coaching Entrepreneurs in Money Management
Saving – the most crucial element of a successful retirement plan
Financial Adviory Career in Corporate World
A bread-winner spouse dies unexpectedly and a gaping hole is created
Sometimes the coach is the one needing some coaching , encouragement or a fresh perspective. Where quality begins and service never ends
THE SUIT MAGAZINE NOV p.5
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by steve selengut
How Wall Street Turns Their Variable Expenses Into Your Fixed Costs
ho do you think took more business, economics, and accounting courses in college, regulators or Wall Street executives? As a business major, one of the first things I was asked to wrap my head around was the difference between fixed and variable expenses. Simply put: Fixed costs and expenses accrue regardless of business revenue. Included are rents, interest, basic utilities, the Keurig, depreciation, insurance, government charges, and executive salaries. There is p.8
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only one (legitimate) fixed overhead item in a managed investment portfolio.... the management fee. Variable expenses occur as you attempt to produce revenue. They include employee salaries, office supplies, K-cups, utilities, marketing, inventory control, etc. There is just one (legitimate) variable expense in managing the inventory within an investment portfolio... commissions. Business revenue must exceed both forms of expenses for the firm to remain viable; in investing, the variable expenses are
included in the cost basis of securities owned; fixed expenses are not. If your total realized portfolio earnings exceed the management fees, you are operating profitably. Higher variable expenses decrease portfolio yield slightly, raise the selling price at which reasonable, targeted, profits can be taken, AND they increase the dollar profit of each trade. Fixed costs are direct deductions from working capital... similar to paying property taxes, tuition, & travel expenses by selling securities. The key to business success is the minimization of the fixed
expenses and control of the variable ones. This is why most "startups" start up in garages and basement offices, why entrepreneurs rarely pay themselves salaries for several years, and why businesses in general fight so hard to avoid government mandates that impact their cost structures. In personal portfolio management, rising fixed costs (i.e., management fees, SEC assessments, custodian fees, etc.) are direct withdrawals from your investment
wallet. Higher variable expenses (commissions and service fees), while increasing cost basis, have no direct negative impact on either market value or working capital. Wall Street is very good at channeling the costs of regulatory oversight into increased fees for you and me... they reduce their fixed costs by increasing our variable expenses, and in some instances, our fixed costs as well. Wall Street firms shift compliance and other government related costs to their customers in the form of transaction fees and service charges. All of these excessive (some-
times punitive) transaction charges are assessed with the knowledge, approval, and assistance of the regulatory agencies... BUT that's only the "cake". The "icing" is the subtle way in which the institutions have covered their variable expenses through the fixed revenue stream they exact from "managed account customers". Perhaps the sickest example of this is the "Wrap Account", where the managed account is simply a "one size fits all" mutual fund, where every participant has a proportionately identical portfolio. Not only have they brainwashed the American investor (great book title), they have also hypnotized the regulators... hmm, are lobbyist activities considered fixed charges, variable expenses, or just plain graft? Way back in 2007, an executive in the "managed money" department of our major full service brokerage firm invited himself to my "operation" in South Carolina. We talked about investment strategy, my disciplined trading style, and their select group of private account managers. He was afraid that the ROA (Return On Assets) of our individual client, commission based, personal portfolio approach, would raise SEC eyebrows, and he was quite clearly trying to coerce us into moving our entire book to their fee based programs. ROA compares the amount of trading commissions generated with the size of the portfolio... profits on the trading aren't even considered. Anything over 3% could incur the wrath of the regulatory gods... even if the resultant net/net profit was in the 7% to 10% target range.
MCIM (Market Cycle Investment Management) operationally speaking, the more total commissions a disciplined trading approach generates for the broker, the more net/net total profit is being generated for the client. You should repeat that. Isn't regulatory "math" fascinating? Today, the DOL is telling 401k plan sponsors that the "internal" costs of an investment product are more important than the amount of income the product produces... 1.85% income after .35% in fees is somehow better than 6.50% after "internal" fees of 1.85%. "Ya see Steve", the managed money guy had the 'bollocks' to say in front of witnesses, "we make a lot more money, with a lot less potential liability and actual overhead, when we work on a flat fee basis." Today, compliance executive "interpretation" of the regulations is pressing for all accounts to be fee based... commissions, eventually, will not be an option in managed portfolios. Management itself may not be an option in small portfolios, where logic tells us it is most needed. But, somehow, commissions are still OK in those portfolios... the "house", after all, always gets its "get". Compliance officers have no "bollocks" at all. They dictate counterproductive policy to avoid confrontation with regulators, and in doing so, have managed to turn variable expenses into fixed portfolio overhead... and a guaranteed annual revenue for "The Masters". Those creative folk in Wall Street executive suites are ROTF-LOL, as the regulators force investment managers to charge clients 3% per year, whether or not any trading takes place. No, the 3% doesn't include the fees within the products that populate most managed programs... and you still pay services fees, SEC and Custodian fees... now that's "bollocks"!
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I once had the frustrating experience of explaining the difference between fixed and variable expenses to an SEC "it's da law" inquisitor. She was certain that my clients were being ruthlessly overcharged by the "advisor fee plus trading commissions" arrangement that was our standard way of doing business. What about this math is so difficult to understand? If I make a $100,000 investment in securities, including the commissions (cost basis = $100K) and sell the whole bunch for $110,000 after paying the selling commissions, the net/net profit is 10%. (One trade or 100, it makes no difference.) After an 0.8% annual management fee, the gain is $9,200, a 9.2% gain in Working Capital. If I do the exact same activity with a regulator acceptable flat fee of 3.00%, my final Working Capital is $107,000. What if there were no trades at all? Commission approach = $99,200 remaining at year end; Flat Fee approach, $97,000. So, when is the client the beneficiary of a flat fee arrangement? Absolutely never, and the "institution" always takes more than 3%, regardless of trading activity or performance. This is the (criminal) genius of Wall Street. They have brainwashed investors, investment professionals, and the regulators into believing that it is the variable expenses that need controlling, not the fixed costs of running the portfolio.... just ask Charles Schwab. As if this isn't enough, most "One Flat Fee Only" customers are punished with an assortment of service and custodian fee assessments that should turn regulator faces red with anger or embarrassment... and absolutely no one can tell you precisely what the "base" service fee is for. It's time you took a closer look at your electronic confirmation notices, and raise some questions. The service fee varies from $3.95 per trade to as
THE SUIT MAGAZINE - NOV 2016
much as $7.50; the discount brokers charge somewhere in between... but that is the subject of the next article. Yes, there is a relatively simple (and "fair to all concerned") solution, but the Wizards wouldn't be able to steal quite as much of our hard earned. They (the institutions) should be required to hold fixed expenses (management fees) to 2.5% per year, but they must include all service fees, SEC fees, handling charges, whatever... yes, there needs to be a lower fee for income purpose portfolios. As to the variable expense we call commissions, lower would be appreciated, but rates based on order size and dollar amount just have to be outlawed... one magic flat fee for all standard (broker assisted) trades... nearly all trades are done electronically these days. How much does it cost to hit a button on a computer screen?
AND, the ROA display of regulatory ignorance? Replace it with a rule that limits the commission to 25% of normal on the 1st five short term losses (after commissions), and to 0% afterwards. Next in the Class Action Suit series: Wall Street Institutions & Regulators, The "Penny" Parasites
Steven R. Selengut, MBA, has been in the financial services industry for more than forty years. He began investing while employed in a life insurer's pension investment department. He began his trading career using the working capital model as outlined in his book, The Brainwashing of the American Investor.
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by john swanciger
WHAT THE NEW FEDERAL OVERTIME LAW
MEANS FOR SMALL BUSINESS OWNERS The U.S. Department of Labor’s (DOL) new overtime rule is simple: Beginning Dec. 1, 2016, every salaried employee making less than $47,500 will receive time-and-a-half pay for every hour they work in a week beyond 40. By raising the minimum salary qualification from $455 to $913 per week, the DOL is securing overtime pay for an additional 4.2 million employees. The implications of the new rule are huge—especially for small business owners, many of whom depend on employees whose pay is under the new salary threshold. But with those employees soon entitled to time-and-a-half, that dependence may come with a big price tag.
espite the consequences, many small business owners aren’t actively preparing for the new rule—and a significant number don’t even know it exists. With only weeks remaining before the rule takes effect, it’s imperative that all company leaders know what the rule entails and how it will impact their business. From there, small business owners should follow strategic steps to develop a compliance plan that’s specifically tailored to preserving their organizations’ operations and financial stability. Unpacking the new overtime rule: History, scope, compliance and implications
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For small business owners, a significant part of preparing for Dec. 1 is understanding the fundamentals of the new DOL rule: why it was updated, who’s impacted and what compliance looks like. Although the rule’s scope of application is broad and leaves little wiggle room for exemptions, small business owners have a number of compliance options at their disposal. By taking advantage of a strategic compliance option, businesses can avoid negative consequences that might otherwise result from noncompliance. The push for updated overtime regulations grew out of an acknowledgment that existing rules are outdated for today’s workforce.
Originally established in 1938, the Fair Labor and Standards Act is the primary governing document for employee wages and hours. In its initial form, the FLSA established the federal minimum wage and the 40-hour workweek. Later protections were added mandating overtime pay of time-and-a-half to employees below a certain salary threshold who worked beyond the fixed workweek. The FLSA’s overtime rules were established to fortify the middle class by ensuring appropriate compensation for hours worked. But because its salary threshold was only adjusted for inflation once since the 1970s, the FLSA’s overtime rights
extended to a rapidly diminishing class of workers. By 2014, the FLSA’s threshold for overtime pay—$23,300—covered a mere 8% of the salaried workforce. As President Barack Obama argued in a March 2014 memorandum to the Secretary of Labor, it was time for the threshold to rise in order to accommodate white collar workers—an employee sector the original FLSA was designed to protect. The new overtime rule represents the DOL’s answer to President Obama’s memorandum. In addition to boosting the overtime threshold from $23,300 to $47,476 to account for inflation, the new rule will also automatically increase the threshold every three years to reflect collective wage growth. When it takes effect on Dec. 1, 2016, it will directly impact 4.2 million workers. For small business owners, the new rule’s scope of application is broad and concrete, and there are limited exemption opportunities. The summary of the final rule makes it clear that the update extends to full-time salaried workers making less than $47,476 a year. Based on the new rule, all workers who fall below this threshold are entitled to overtime pay unless an exemption is claimed. But small business owners can’t rely on exemptions dictating their new rule preparedness plan. As the DOL’s Wage and Hour Division points out, small businesses cannot claim special exemption from the new overtime rule. Apart from certain specific industry exemptions (outlined here) it will be challenging for small business employers to justify exempting full-time salaried employee below the $47,476 threshold from the new overtime rule. Because most small business owners won’t be able to circumvent the new rule, they must prepare to comply with it. Fortunately, there’s more than one avenue to compliance. Employers can decide among these approaches—or a combination thereof: Pay overtime per the new rule: The most direct way for small businesses to comply is to pay overtime to qualifying salaried employees beginning on Dec. 1. But despite its simplicity, this method can quickly become costly, especially for businesses that rely on employees under the threshold regularly working past 40 hours a week.
$ $ $ $ $ $ $ $ $ $
Raise employee salaries above the threshold: As an alternative to having to pay overtime, employers can raise their employees’ annual salaries above $47,476. For many employers—particularly those whose employees are already close to earning that figure—this may be the most practical and economical approach. It will ensure payroll consistency and create overtime surprises, particularly during high-demand times of the year. Institute 40-hour maximums for employees under threshold: Another way to remain compliant is to cap the workweek at 40 hours for employees who make under $47,476. This can be carried out via comprehensive time tracking and the implementation of a company-wide standard. However, businesses that go this route are still legally bound to pay qualifying employees overtime, and can’t cite a company policy as a reason not to pay. Furthermore, limiting qualifying employee hours to 40 may have a substantial impact on productivity, particularly for businesses that depend on employees to regularly work more than 40 hours. Businesses that find themselves in this situation may need to hire more salaried employees or part-time workers to account for losses in productivity. Alternately, they could consider taking on independent contractors and freelancers, particularly during busy periods of the year. Small businesses and overtime: An awareness and preparedness gap Regardless of what approach to compliance they choose, small business owners must be prepared to roll it out by the beginning of December. Despite the importance of being ready by Dec. 1, many small business owners aren’t actively devising a compliance strategy—and a significant number don’t even know the new FLSA rule exists. According to a Manta poll of more than 2,200 small business owners carried out in August, roughly 37% of respondents reported not being aware of the new overtime rule. And of the small business owners who said they had employees who fell below the $47,476 threshold, nearly one-third said they are not actively strategizing to comply with the new rule. Among small business employees, there’s even less of a sense of clarity about the new rule. As an August Manta survey of over 600 small business employees revealed, 57% THE SUIT MAGAZINE NOV p.13
of respondents making below the salary threshold said they weren’t aware of the impending change to the FLSA. Additionally, 52% of this group reported that they don’t currently receive overtime for work beyond 40 hours a week. The fact that the awareness gap surrounding the FLSA rule is more marked for employees than employers suggests that some small business owners who are aware of the new rule might not be communicating its implications to their staff. The steps small businesses must take to prepare With the implementation date for the new rule looming, small businesses need to be prepared for its impact. Here are some of the key steps business owners can take within the next two months to ensure a smooth transition to operating compliantly under the new rule: Decide on a specific compliance method: However you’re going to comply with the new rule—whether by raising salaries, paying the new overtime rates, implementing 40-hour workweek caps, or some combination thereof—it’s important to solidify your approach now and plan accordingly. Determining the best compliance method for your business will depend on your organization’s particular functions. If, for instance, you run a business that
only demands long hours during a particular season, it might make sense to either keep salaries as they are and pay overtime or implement a 40-hour cap and bring on temporary or contract-based workers during the busy season. If, on the other hand, you run a business that relies on employees regularly going beyond 40 hours, raising salaries above $47,476 may end up saving the most. One easy way to determine the best approach for your business’ savings is to use an FLSA cost estimate calculator. Implement efficient time tracking: Manta’s August survey found that of the small business owners who will be impacted by the new DOL rule, roughly one-fifth don’t track time. And of the small business employees Manta surveyed who fall below the $47,476 threshold, 30% said they don’t track and report time to their employer. For small businesses whose personnel will be impacted by the new rule, time tracking is an essential part of compliance. The most important consideration for small business owners is to implement time tracking that’s easy to oversee and not onerous for employees. That means avoiding methods like papers and spreadsheets in favor of time reporting software that’s designed for ease of entry and
administrative oversight. Promote awareness across the business: As Manta’s August survey revealed, small business employees are less aware of the impending rule change than employers. Without an aware and prepared workforce, small business owners will face greater difficulty planning for the change. By keeping your employees informed about the new overtime rule and how it will impact their workload, you can prevent confusion that may hinder compliance. Bring in a labor and employment lawyer or other expert: The DOL’s FLSA regulations are dense and voluminous, and small business leaders may find them difficult to navigate—particularly if they’re looking to claim very specific exemptions. In this case, it can be beneficial to consult a labor and employment lawyer or other expert to avoid any legal repercussions. With weeks remaining before the new rules take effect, all small business owners must prepare. While this requires time, resources and possibly internal restructuring, owners who start planning now will position themselves for successful compliance come Dec. 1.
John Swanciger, CEO
John Swanciger is a seasoned technology executive with vast experience in team building, product marketing and strategic partner development. As CEO, he leads
John toSwanciger, Manta strengthen itsCEO current offerings, while expanding products and services John Swanciger is owners. a seasoned technology executive vast experience working in team for small business John brings more than 15with years of experience building, product business-to-business marketing and strategic development. Ascompanies, CEO, he leads with high-growth andpartner business-to-consumer Manta to strengthen current offerings, while expanding products and services including Accenture, its Hotwire and Starwood Hotels & Resorts Worldwide, Inc. Most for small he business owners. John more than 15 John yearsisofaexperience working recently, was Switchfly’s chiefbrings commercial officer. board director at with high-growth business-to-business and business-to-consumer companies, Liftopia and received a bachelor’s degree in finance from Boston College. including Accenture, Hotwire and Starwood Hotels & Resorts Worldwide, Inc. Most recently, he was Switchfly’s chief commercial officer. John is a board director at Liftopia and received a bachelor’s degree in finance from Boston College.
THE SUIT MAGAZINE - NOV 2016
by amy armstrong
Overtime Woes for the Agency Overseeing Labor Rules Violating its own labor laws has cost the federal Dept. of Labor a tidy $7 million.
n 2006, the American Federation of Government Employees Local 12 filed a collective action complaint against the DOL asserting that it had misclassified nonexempt workers as being ineligible for overtime pay. Turns out, the DOL’s misclassification of certain administrative employees based on their salary levels and duties left many employees working overtime hours for years without compensation, according to a statement by Snider and Associates, the Maryland-based legal firm representing the employee’s union. Under rules laid out by the Fair Labor Standards Act (FLSA), a federal statute that is under the oversight of the federal DOL, nonexempt employees “must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.” That reads like a clear cut guideline, but its application isn’t nearly as simple. It requires determination of which employees are non-exempt and which employees are exempt. As an example, the “duties” test designates a variety of administrative, executive and professional job duties that “can” exempt employees from overtime eligibility. A company can be held liable for overtime pay even if supervisors did not pre-authorize the overtime, but knew that the tasks at hand would require additional work hours to complete. Introducing a policy requiring supervisor signatures to approve overtime is one method a company can use to control mandatory overtime expenses. Beginning Dec. 1, 2016, new legislation increases the salary threshold for exemption from $23,660 annually to $47,476 annually.
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A SHARK, A MARKETING GENIUS, and $500,000 by jude scinta “It doesn’t matter where you’re from, it matters what you do with what you’re given.” said Robert Herjavec to the residents of Wabash, Indiana as he stood at the podium at a town meeting earlier this summer.
hat was the well-dressed, tech savvy Shark from ABC’s primetime hit, “Shark Tank” doing in the Midwestern city whose population hovers just above 10,000? He was kicking-off the Small Business Revolution Main Street, the brainchild of Deluxe Corporation and led by marketing maven, Amanda Brinkman, chief brand and communications officer for the company. For such a small city, often called a town, Wabash has a couple of firsts to brag about. Historians say that in 1880, it was the first city in the world to flip the switch for electric street lights. More recently, the community lit up again when it was named the winner of the first Small Business Revolution Main Street Campaign after surpassing runner-up Silverton, Oregon in votes. As the victor, Wabash received $500,000 to revitalize local business, and some of the city’s small business owners got the rare opportunity to be mentored by Herjavec and Brinkman on business operations, and sales and marketing strategy. Prologue When Deluxe Corporation celebrated its 100th anniversary in 2015, they used the occasion to spotlight small business owners and entrepreneurs throughout America by featuring them in a new initiative, the Small Business Revolution documentary led by Brinkman who also invited Herjavec to participate. He was moved
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robert herjavec co-host of shark tank
amanda brinkman chief brand and communications officer
by their mission, so he agreed. “We went across the country and told the stories of one hundred small businesses and created a documentary capturing the experience. One of the things we noticed when we were on that journey last year is that small businesses really are struggling in small towns, and we wanted to do something about that,” said Brinkman. The documentary series evolved into the 2016 Small Business Revolution Main Street Campaign where people across the country were asked to nominate their favorite small towns to receive a half-a-million dollars to revitalize their business district. Through a nomination and voting process, Wabash landed in first place. Deluxe created an eight-episode online docuseries that debuted in September showcasing six different businesses in Wabash that received guidance from Herjavec, Brinkman, and the marketing team back at Deluxe’s Minneapolis headquarters. The Main Event Arriving in Wabash, Brinkman and Herjavec met individually with business owners to hear their goals, challenges, and fears for their companies and their families. Herjavec soon realized that he was a shark swimming in a new territory. “‘Shark Tank’ is investment on steroids and you've got to add value right away. But when you go to Wabash, you notice how genuine and salt-of-the-earth and nice people are. Like anywhere, they want to do good. No town owns the rights to the American Dream. It's alive and well even in a small community,” he said. Immediately evident to Brinkman was the passion business owners had for their community. “They all really felt a responsibility for doing well in order to make sure that Wabash did well, and you just noticed their warmth and willingness to change,”
she said, also noting that she was struck by the strong sense of commitment owners have to their employees’ families. Herjavec agreed and added, “What we tried to instill in them is a certain discipline and passion for the business itself. The business is a living breathing thing, and you've got to feed it and you've got to take care of it.” Brinkman and Herjavec counseled Wabash business owners within their individual areas of expertise, but Herjavec feels his nice-guy image may have taken a hit. “The only problem was that Amanda is so nice, that I ended up having to deliver the bad news. So somehow, I ended up being the Kevin O'Leary of the series, which is incredible because I have hair,” Herjavec chided, calling out his “Shark Tank” colleague known for delivering blunt blows to people seeking a hefty investment from the Sharks. Oddly enough this has become part of O’Leary’s charm on the show. “The two things that we tried to help all the businesses with were to get their marketing in great shape and help them think through their business from a numbers perspective to make sure they had a healthy grasp on how they were making money and how they need to look at their business moving forward,” said Brinkman. For instance, in episode 2 of the online docuseries, when Herjavec saw that inconsistent accounting practices affected the profits earned by Harry and Judy Kilmer, owners of Harry’s Old Kettle Pub & Grill, he told them, “Today, you’re working to exist, you’ve got to start working to live.”
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“On the marketing side, we saw a lot of the businesses didn't have websites, or weren't using email marketing to bring back past clients – basic marketing best practices that we were happy to help them with.” Epilogue The Small Business Revolution Main Street not only delivered a $500,000 facelift and priceless mentoring to Wabash, it’s been a public relations dream. The city, its businesses, and its residents were thrust into the national virtual spotlight giving travelers a reason to consider the locale as a destination. Christine Flohr, executive director of tourism for Visit Wabash County, acknowledged that the impact of the revitalization also helped spawn new ideas on how local government can more fully support commerce. “The Small Business Revolution created a paradigm shift in thinking on how Wabash generates economic stability by supporting the small business sector and entrepreneurial spirit. Through conversap.18
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tions with thought-leaders like Amanda and Robert we readily recognized a significant gap in support-services to our small businesses. The Small Business Revolution program has done so much more than just change the aesthetics of our downtown, it’s changing communities and lives. It has given us hope that Wabash is on the right path for economic success and it reminded us of what can be accomplished when an entire community collaborates together for the greater of all.” The Sequel Like every great adventure, you hope there is more to come and Deluxe is not disappointing. Hopeful towns can vie for the top spot in the 2017 Small Business Revolution Main Street Campaign by entering their nomination at smallbusinessrevolution.org. According to Brinkman, Deluxe will consider what challenges the town and its small businesses face, how the town might utilize this kind of revitalization,
Mike and Maria Smyth-EclecticShoppe
and if can they benefit from not just the cash infusion but also the expertise of Herjavec and Brinkman along with the Deluxe team. “We all have the opportunity to use what we do for a living to help make other people’s lives better, and this is certainly a culmination of that in in the best form,” said Brinkman summing up the motivation behind the Small Business Revolution initiative. To view the eight-episode Small Business Revolution docuseries and learn more about how to enter your city or town in next year’s campaign, visit: smallbusinessrevolution.org
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VION Receivable Investments 400 Interstate North Parkway Suite 800 Atlanta, GA 30339 877.845.5242 phone 678.815.1557 fax Mesquite Corporate Center 14646 N. Kierland Blvd. Suite 122 Scottsdale, AZ 85254 480.729.6419 phone 866.260.1826 fax 123 North College Avenue Suite 210B Fort Collins, CO 80524 877.845.5242 phone 970.672.8714 fax 11921 Freedom Drive Suite 550 Reston,VA 20190 703.736.8336 phone VION Advisory Services 18017 Chatsworth Street Suite 28 Granada Hills, CA 91344 818.216.9882 phone 818.891.8738 fax VION Europa Paseo de la Castellana 95-15 (Torre Europa) Madrid 28046 Espanha +34 91 418 50 88 phone www.vioneuropa.es
RE CE IVABLE
IN V E STM E N TS
Atlanta • Phoenix • Fort Collins • Reston • Los Angeles • Madrid THE SUIT MAGAZINE - JULY 2016
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by jude scinta
WELLS FARGO SCANDAL:
A MOCKERY OF THEIR CORPORATE VISION
John G. Stumpf, Former CEO of Wells Fargo & Company p.20
ells Fargo devotes a series of digital pages on their website to convey their commitment to their corporate vision which states: “We want to satisfy our customers’ financial needs and help them succeed financially.” This simple and succinct mantra is said to serve as the foundation for everything they do as one of the nation’s largest financial institutions. Further they state: “Our vision has nothing to do with transactions, selling products, or getting bigger for the sake of bigness. It’s about
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building lifelong relationships one customer at a time.” While marketing teams and website designers took great care to develop and display content to tell customers how much they were valued, other departments within Wells Fargo were hard at work fulfilling another vision. But just whose vision it was is still under investigation. On September 8 of this year Wells Fargo was slapped with a $185 million fine by the Consumer Financial Protection Bureau, the Los Angeles City Attorney, and the Office of the Comptrollers of the
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” ― Henry Ford
Currency who alleged “that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015,” according to ABC News. Things moved quickly from there, at least by government standards. Beginning on September 20, John Stumpf, then chairman and chief executive officer of Wells Fargo was grilled at hearings in front of members of Congress. Senator Elizabeth Warren, D-Massachusetts, blasted Stumpf calling for him to resign and face criminal charges. Just a week earlier, Stumpf made his stance clear telling CNBC’s Jim Cramer during an interview, “I think the best thing I could do right now is lead this company, and lead this company forward.” On October 12, Wells Fargo announced Stumpf’s retirement effective immediately.
Wells Fargo has fired some 5,300 employees who they said were behind the fraudulent accounts that allowed employees to increase their sales figures and their income while bringing the bank unwarranted fees. What remains to be seen is how bank officials and managers within this mammoth financial institution that serves one-in-three households and employs one-in-600 working Americans – not to mention their vast global footprint – were unaware that this illegal activity was happening under their watch. Just who was aware of what, and at what level did they serve in the company is still unknown. Currently, Wells Fargo is the target of several investigations to determine the enormity of fraudulent activity within the institution. The California Attorney, General Kamala Harris has launched the latest investigation to de-
termine if bank employees committed false impersonation and identity theft. ABC news reports that “investigators have requested the names and other identifying information for employees and managers who may have opened or authorized the opening of accounts allegedly without customers’ permission.” According to CNN, Wells Fargo announced that the number of consumer checking accounts opened in September fell 25% below the same month in 2015. In October, the beleaguered bank answered by turning to their marketing team who launched a media campaign built restore trust in its brand. One 30-second television ad leads with, “Wells Fargo is making changes to make things right.” They must have gone back to their website and reread their corporate vision statement. THE SUIT MAGAZINE NOV p.21
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INVESTING AS PROCESS
Financial Guru Looks at Long-Term Wealth Building
ost investors panic during the major market corrections that lead to substantial losses. “Our view is that a more conservative portfolio will typically get the desired results without the stress of potentially watching one’s life savings being cut in half,” Rubinstein said. Joseph N. Rubinstein, President and CEO of DSI Wealth Management, is no rookie when it comes to investment strategies and solutions. With over 30 years of experience, he has weathered multiple market fluctuations and, after seeing all the outcomes, continues to advocate a moderate conservative planning approach for long-lasting success. Rubinstein’s philosophy is that investing should be treated as a lifelong process rather
than as an event – always keeping the end goal in mind over short-term windfalls. Even with a conservative approach, Rubinstein encourages clients to save as aggressively as possible while they can. “A lot of times, that means sacrifice in their younger years, but it has afforded many of our clients a very comfortable retirement,” he said. “Our clients don’t measure our success based on the performance of their accounts, but more importantly, our success is measured by our commitment to meeting goals and objectives,” he said. “As much as we can,” he added, “we use income investments that generate the level of income our clients desire without touching principal. This helps with longevity concerns and also creates a safety net for those who need large sums of cash for unexpected medical care later in life.”
With more than 75 years of combined planning and investment experience, the professionals at DSI Wealth Management stand ready to perform services for their clients, their clients’ families and employees and the community.
by a.m. lehner Generating a self-sustaining income stream during a financial climate of historic low interest is becoming more and more challenging, especially for those on fixed incomes. Rubinstein circumvents these challenges by looking to annuities, dividend-paying stocks, bonds and alternative investment solutions. He considers these on a case-by-case basis as to how they would benefit the individual. “We’ve always acted in the best interests of our clients,” Rubinstein said, adding, “There’s a huge push in the industry right now to act as fiduciaries. What this means in a nutshell is that, it is no longer enough for an advisor to merely recommend a product or service that is suitable. We scratch our heads all the time wondering if there were people out there not already doing this. Evidently they were not.” With an experienced team of licensed representatives, DSI Wealth Management has always held itself to a higher standard – even before acting as a fiduciary became politically popular. Rubinstein believes this is why so many of those who are now clients turned to them after having bad experiences elsewhere. “The only consideration that factors into our suggestions are whether or not it is the best thing for our client,” Rubinstein said, adding that this makes it easy for clients to take their recommendations seriously. Rubinstein also foresees the fiduciary shift bringing about huge changes in the industry, including a move to fee-based advising. While he believes acting as a fiduciary is the right choice, he’s concerned that on the whole, fee-based models could potentially cost clients more in the long run.
1000 Lakes Dr. #420 West Covina, California 91790 United States Toll Free: 800 365-7749 www.dsiwealthmanagement.com THE SUIT MAGAZINE NOV
RETIRING WITH FREEDOM FRONT-END PLANNING PREVENTS SLEEPLESS NIGHTS
Life is messy – that’s a given – but when it comes to retirement, people want to know that their money will last regardless of what comes along. Toni Hill, co-founder and vice president of Freedom Financial Group, knows this is the primary concern of today’s retirees and strives to make sure her clients can relax and enjoy their retirement. by a.m. lehner
ill explains how, when people are facing retirement, there’s a sudden realization that however much money they’ve accumulated is all they will have. “Now, you have to make all of this work for you in a way you’ve never had to before. You are asking it to start feeding you; you aren’t feeding it anymore.” “The loss of control can be very frightening,” Hill said, adding that her job is to eliminate those concerns through comprehensive planning so her clients can sleep at night. “We know that unexpected and unfortunate things are going to happen. But, if you plan really well on the front end,
you have anticipated the unexpected and have a plan to handle it,” she explains. By working multiple scenarios, including possible illness and spousal survival, contingency plans are always in place to give clients the space they need to focus on their emotional needs, without adding the burden of making sudden financial decisions. “It’s already devastating enough without having to worry about the financial aspects,” Hill added. Toni started her Alabama-based firm with a mission to make sure retirees were getting accurate information. After seeing her own aging parents being poorly advised, she became motivated to enter the financial industry to fill those gaps for holistic, cost-effective all-encompassing retirement and legacy planning so other retirees would be taken care of the way they should be. “We consider ourselves specialists,” she said. “We are working with people who are five to ten years out from retirement, or who’ve already retired.” Hill understands what it is that retirees need from a portfolio – longevity and stability as opposed to aggressive pursuit of growth through alpha and beta strategies. “Baby Boomers are retiring at a rate of 10,000 a day. It’s not that they don’t want growth in their portfolios; that’s not all they are looking for right now,” she explained. “in fact the most
Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Advisor.Insurance and Annuity product guarantees are subject to the claims-paying ability of the issuing company, and are not offered through Global Financial Private Capital. p.24
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important thing is not growth but to have an income plan designed to replace the paycheck they are losing.” Hill also believes that with the prevalence of online tools, abundance of information on the web, and often irresponsible messaging from the media, retirees need retirement specialists to help them weed out potentially damaging misinformation. “We don’t have a lack of information out there, we have too much information,” Hill said. “When people come in, they are confused. They don’t know how to filter out what applies to them and what doesn’t.” “Where we really become valuable,” Hill added, “is when we are advising them how to blend what they want with what they have, and with what matters to them – and then optimize it.” Selling products or investments is not Hill’s primary goal; ensuring that retirees remain fiscally sound and worry-free is.
4500 Valleydale Road, Ste 180 Birmingham, AL 35242 Phone: 205-988-0006 www.freedomfingroup.com
DON’T GO TO DIVORCE COURT WITHOUT COACHING Divorce is stressful. It is messy and full of a kind of legal speak that can easily confuse. That’s not exactly a news flash – or even a shocking headline. by amy armstrong
he reality is that those going through divorce need support to successfully get through the process. Yet, up until recently, the notion of employing a “coach” for divorce issues has been a foreign concept for so many experiencing this painful process. Not anymore – and not if one opts to work with any of the numerous divorce coaches being trained by Randall Cooper, owner of the CDC Certified Divorce Coach® training center based in Tampa, Fla. Cooper, who is a Supreme Court of Florida Certified Family Mediator, as well as a certified divorce financial analyst and a certified financial planner, said that, even though he had a lot of experience dealing with divorce and its financial ramifications, the actual idea of divorce coaching didn’t come to him until he took training as a life coach. “I was really involved in the process, but there was always something missing that I just couldn’t put my finger on,” Cooper said. “I looked around and realized that there was no actual profession known as divorce coaching. So I created it.” Even though divorce coaching is relatively new, the American Bar Association has not only defined it, but has also officially recognized its implementation as a contributing element in today’s divorce court.
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A divorce coach does what coaches in other aspects of life do: They help prepare participants for the actual game. In the case of divorce, that preparation often includes sorting through difficult emotions prior to visiting an attorney. Doing so gives the attorney more time to work directly on achieving a client’s goals for the divorce instead of working as a highly-paid therapist. “A divorce coach helps turn the story of the divorce into the business of getting the divorce,” Cooper explained. “Once a client is part of the business of their divorce, the attorney can better represent them. A divorce coach helps clients gain more clarity in regards to what
they want to accomplish from the divorce, and gives them confidence in what they are doing with their attorney. The divorce coach helps them shape their vision for what their lives will look like after divorce.” Cooper provides e-training and classes for a variety of professionals seeking to add certified divorce coaching to their resumes. The professions of Cooper’s students range from counselors to therapists to accountants and financial planners. They live and work across the globe. A recent sample class had students from Florida, Los Angeles, London, the Netherlands and New York, collectively working through the course developed by Cooper
and his wife, Pegotty Cooper. The training is a fully-interactive four-month electronic course. “The conversations going on in this course make it seem as if everyone were all in the next room together,” Cooper said. Coaching concepts are presented to the student. Every seven minutes of the course, students are asked for their thoughts on what was just presented. They are asked how the newly-presented information fits within what they already understand regarding divorce coaching. Students are challenged to personalize what they learn about divorce coaching to fit in with their main profession. Cooper then uses a series of quizzes to evaluate student comprehension. Students also practice the roles of coach and coached divorcee. “They practice what the coaching conversation that would go on during the divorce process is,” Cooper said. The course also provides training for marketing. Cooper realizes that not everyone who wants to become a divorce coach is a natural at marketing. In fact, he notes that few people actually are. One tidbit of information many students are surprised to learn is one that Cooper considers essential to
the success of a divorce coach. He points to several university studies documenting the fact that people in stressful situations – such as divorce – often unknowingly also experience a temporary drop in their intelligence quotient or IQ. The studies measured the IQ of CEOs of major companies during high-stress decision making. As it turns out, their collective IQ scores dropped significantly just when they needed to be at their best. Cooper explained that the same applies to people in the midst of divorce. When a divorce coach identifies this trend and then works toward slowing down the decision-making process to give the client time to re-focus, the coach is able to facilitate a lower stress level, giving clients the confidence they need to make better decisions. “Our greatest success is that we have professionally-trained coaches all across the United States, Canada and the world who are now helping people get through the challenge of divorce,” Cooper said, adding, “This new profession that has been created is being done in a highly professional manner.” Learn more about Randall Cooper and the CDC Certified Divorce Coach® online at www.certifieddivorcecoach.com
We are preeminent in the field of personal divorce coaching and we are thought leaders in the profession of personal divorce coaching.
CDC College for Divorce Coaching® 8729 Bay Pointe Dr. Tampa, FL, 33615 Phone: (813) 455-1134 www.certifieddivorcecoach.com
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Chief Brand and Communications Officer, Deluxe Corporation
Chief Brand and Communications Officer, Deluxe Corporation
Business Entrepreneur, The Herjavec Group
Business Entrepreneur, The Herjavec Group
TRY and FAIL BUT DON'T FAIL to TRY by amy armstrong
Saving – the most crucial element of a successful retirement plan – is also often the most difficult thing to do.
Saving money is painful, and I know of no game or mechanism that will entice people to change their personal habits other than knowledge and personal discipline,” John Essigman said. As the CEO of John Essigman Wealth Advisors, LLC, based in Cleveland, Georgia, the ability to save is a quality he looks for in potential clients. “I seek clients who are committed to actively participating in achieving their goals. This is evidenced by folks who have savings or are actively setting aside money for their own futures.”
When Essigman finds that attribute in a client, he is then in a position to offer that client unlimited access to a robust service providing guidance on taxation, business, investing, insurance, private debt, real estate and trusts. Building a client’s financial literacy also plays an essential role in Essigman’s practice. “Traditionally, it has not been taught in high schools or in post-secondary schools. Somehow we have lost the mentoring from parents to children,” Essigman laments, noting the incredibly low level of financial literacy he sees amongst incoming clients and Americans in general. This troubles him, because the national trend of drifting from one financial predicament to another seems to continue with little improvement in the debt-to-income ratio of far too many American families. “Our society has gone from Depression Era fears, lifetime employment and pensions to immediate gratification and consumerism while world economies are seeking equilibrium.” He notes that residents of countries such as China and Pakistan continue to improve their standards of living, while the American experience remains on
a decline. While he couldn’t even hazard a guess as to how to change the national trend in America, he does know that working with one client at a time gives him the opportunity to effect change on an individual basis, which perhaps will contribute to a collective reversal of this troubling trend. Essigman sees the federal move within the Dept. of Labor toward a uniform fiduciary standard of care requiring all financial advisors, whether commission-based or fee-based, to operate always and only in the best interest of the client, as a step forward. “I believe that any person or organization that handles money should be held to this standard,” Essigman said. Not only does he know about high standards, but he also knows a thing or two about enduring temporary pain to produce more rewarding results. It took him some time to get his own career path settled and centered on financial advising. After serving in the U.S. Marine Corps, Essigman graduated college and started his civilian life working as a business programmer/analyst in the manufacturing industry. In the 1980s and 1990s, he rode the boom of information technology revolutionizing manufacturing. But by 2004, changes within the industry created a dissatisfaction within Essigman that led both
him and his wife, Glenda, to believe that the time had come for yet another career change. He went back to the early life lessons his father taught him: investing, saving and taxation minimization. His practice had humble beginnings as he worked prepping tax returns, selling insurance, and later earning his certifications and licensure for annuities and investments. He admits that the transition from manufacturing to financial work was horrible. To make ends meet, Essigman worked at UPS from 3 a.m. to 8 a.m. before a full day of meeting with potential clients. During this time period, he learned, “You don’t fail until you give up – and we refused to quit.” This mantra serves him well now, as Essigman inspires his own clients to endure the temporary pain of learning to save. “We just keep encouraging them to keep saving,” Essigman emphasized. “You don’t fail until you give up.” Learn more about
a Registered Investment Advisor
141 North Main St Cleveland GA 30528 Phone: (706) 865-0121 www.bluecreek.net
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by amy armstrong
Factor a Client’s Goals I N T O T H E P O R T F O L I O ’S D E S I R E D R AT E O F R E T U R N
ie the management of your client’s portfolio to the achievement of his or her goals, and the chances of success greatly increases in terms of creating a situation in which a client does not outlive his or her resources. This appears to be a straightforward, simple concept. Yet, it isn’t always working for clients being served by professionals in the financial industry. Not all financial planners make the connection between accumulation of wealth and the practical application of its distribution for purposes of fulfilling a client’s life goals. That is, unless that client engages Richard (Dick) J. St. John. As president and founder of St. John & Associates, Inc. based in Roswell, Ga., St. John has blazed a trail for the inclusion of life goals as standard operating practice in the management of a portfolio. p.32
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Portfolio management needs have to be tied into the client’s individual goals – and customized to meet those goals – or it simply does not work,” St. John said. He sees this as being best achieved through a friendly relationship with clients, characterized by regular face-toface meetings, Skype discussions and a continual exchange of email. All of these communications are filled with educational material for his clients to use to improve their financial literacy, and to remain updated on the impact that market and world events may or may not have on their individual financial situations. This is the approach that brought St. John and his clients through the Great Recession of 2007-2009. He ramped up communication with his clients, did a lot of hand-holding and reassurance that staying in the market and being poised to ride the recovery wave to the top was the best option, and he diligently kept
clients’ portfolios widely diversified. “When things are going badly in the marketplace, an advisor needs to increase communication with clients. They need to hear and know that you are concerned about the situation and are working on it,” St. John said. “That is the substantial element of trust. Our clients have to know that we are representing their best interests.” In fact, St. John refuses to operate his firm in any other manner. Fiduciary isn’t just a label at St. John & Associates. It is the only way of doing business. This is why he welcomes changes put out by the Federal Dept. of Labor regarding the definition of a fiduciary and its application to brokers, insurance agents and financial advisors but only applicable to retirement type accounts such as IRAs, Roth and 401(k) type accounts. St. John sees the new DOL Fiduciary regulations applicable to retirement type accounts improved, but still lacking, fee disclosures as somewhat of a disservice to the participants in retirement savings plans such as a 401ks. “One of the most basic and most common fees charged to 401k participants – the 12b-1 fee, paid by mutual funds to plan sponsors or custodians – is still not being disclosed in the fee literature for most 401k plans,” St. John explained, adding, “It is a fee charged against participants investment returns used to lower the administrative and service costs associated with offering the plan. But most participants never know they are paying it. “It will be interesting to see how fee disclosures are impacted by the new rules coming out,” St. John said. For his firm, though, he isn’t concerned. “We remain using the fiduciary standard in which our employees give their best efforts – acting in good faith and the best interests of our clients – by providing full disclosure in writing about any conflicts of interest before we engage. We do not receive or accept compensation for any transaction from a third party. We only work for and are only paid by our clients.” Learn more about St. John & Associates online at www.stjohnfinancial.com
A FIDUCIARY SHIFT
Fee-Based Planning Reduces Conflict and Assures Best Practices for Clients
oo often the financial industry is driven by product sales, which compromises the client’s interests. Shikha Mittra AIF©,PPC ©,CFP ©,CRPS ©,CMFC, president and principal of Retire Smart Consulting, a fee only wealth management firm, is an adamant supporter of fee-based advising, and says it’s the only way clients can be certain that the advice they receive is in their best interests – and not the advisor’s. “Whenever there’s a commission or revenue sharing arrangement and you are leaving the decision to a non-fiduciary for selecting investments whether in your personal investment portfolio or for your company’s retirement plan and your advisor is compensated based on that, it might create a conflict,” Mittra said, explaining why she supports the fee-only model. “When you are acting as a fiduciary, you have to provide a course of action which is in best interest of the client.” Fiduciaries, such as Mittra, are legally bound to work on the same side as clients, protecting their best interests. “We are not trying to sell any investment products – period. That takes the conflict of interest out of the relationship,” she added. We follow a prudent process of managing the retirement plan investment portfolios based on global standards of excellence. We have a strict due diligence criteria
THE SUIT MAGAZINE - JULY 2015
for selecting, monitoring and replacing funds which helps sponsors and foundations reduce their fiduciary responsibility. “As long as there is level compensation for the advisor, whether the client chooses one investment or another, there shouldn’t be a conflict.” Mittra explained that while pay-per-play was the industry norm, new regulations and a shift toward feebased planning is beginning to create a ripple effect of change in the product and services offered. As the deadline for compliance with the DOL’s (Dept of Labor) updated Fiduciary Rule is fast approaching (4/10/2017), and increased litigation by disgruntled employees, retirement plan sponsors of small to mid -sized companies are getting concerned if they are meeting the fiduciary standards. That’s where we can add value. “A lot of insurance products are based on commission, and that’s where we are seeing a lot of changes happening,” Mittra said. “Only time will tell, but that’s where we see the industry going.” Technology is also creating a shift in the industry, especially for younger investors, but Mittra cautioned that robo-advisors are only useful for the most basic investing needs. “For customized solutions, you still need personal interaction with
by a.m. lehner
an advisor. That’s where customization happens,” she said, adding that every situation requires unique customization. If a personal plan is what the client is looking for, Retire Smart Consulting aligns with their anticipated lifestyle, living and medical expenses during retirement. For company sponsored 401K, they start with an Investment Policy Statement(IPS)which defines the objectives, responsibilities, risk, return and due diligence criteria for selecting, monitoring and rebalancing the investment portfolios based on the unique needs of the employer. Although Mittra has received several industry awards, she measures her true success by the success of her clients, and says receiving thank you cards from clients thanking her for the difference she’s helped make in their financial lives is as good as any award. “I treasure each card I get from my clients. It is very dear to me.” For further info contact 609-955-3456 or firstname.lastname@example.org www.retiresmartconsulting.com
Giving Clients Their Own Board of Advisors by amy armstrong
Taking a strong cue from their counterparts, financial services practitioners in the medical field are capitalizing on coordinated care in the corporate world because it has a strong foothold as the best way to deliver services to their patients.
t seems the idea of a roundtable approach – one in which all the skill sets represented in a well-developed financial plan including accountants, attorneys, estate planners, financial planners, insurance agents, revenue managers and tax specialists work together – is gaining ground in the financial services industry as well. “The current trend in planning, and where we are seeing real value is in linking the relationships among asset protection, tax reduction, investments, insurance and estate planning professionals, with the experts in revenue cycle management,” noted Michael Scott Berry, founder and owner of Michael Scott Financial based in Newtown, Conn. “There is a critical link between
value the advice and input from experts in each field. It also works for financial services firms seeking to create not only a better experience for their clients, but also consistently flowing revenue streams as part of their business model. “It is similar to what has occurred in the medical profession,” Berry explained. The bulk of his clients are physicians and medical practices. They are professionals whose biggest obstacles aren’t related to their advanced training, enabling them to diagnose disease and recommend treatment. At this juncture, physicians who are solo practitioners, or in partnerships of 2-50, are more challenged with keeping cash flow and revenue streams moving along. This is especially true as we see
At MSF and FC we combine multiple specialists in the areas of tax reduction, asset protection, investment, retirement, benefit plans, insurances, corporate structure and estate planning into SIMPLE packages.
these sub-specialties of planning, which requires crafting of a well coordinated plan to ensure an efficient outcome.” Coordinating these specialties is akin to creating a client’s own board of advisors, except that the board helps other clients as well. This approach definitely works for clients, especially for those who want and p.34
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increases in government regulation and the expenses of compliance, fee compression, employee benefits, competition and the basic costs of doing business. Also just as important and hovering in the background, are impending tax increases, threats to the US and global economies and a general lack of trust in financial services. “Today’s medical clinic is not the same
as your grandfather’s practice,” Berry said. “In the past, physicians made most of their money from clinical work. Today, they earn only a portion out of clinical. Today, they own the ambulatory surgical centers, the laboratories, the pharmacy, the dispenser of durable medical equipment – and they even own the real estate where they have their offices. They have created LLC’s and multiple streams of revenue based on these platforms from which they dispense medical advice.” Berry sees how the same thing is applicable to the financial services industry – and particularly to his firm, where the use of a team approach toward managing clients’ financial needs is already the norm. He knows that in today’s business environment, where instant communication and instant gratification dominate,
speedy responses to client concerns and questions must be the expectation and not the exception. “Clients expect response time to be quick,” Berry emphasized. “Response needs to happen immediately, and you must have enough infrastructure to do so at lightning speed.” That is where Berry’s partner, Lindsey Cruz, enters the picture. She is the firm’s executive director, and quite often is the one who delivers the “lightning speed” customer service that Berry refers to. Berry said clients often call just to talk to Lindsey, which is completely fine with him. “Every day, Lindsey and I work diligently to be more valuable to our clients than we were the day before,” Berry said. “Our firm cannot do what it does without good
employees, good colleagues and competent specialists – and Lindsey is a major part of what works here. It is imperative to have the right values-oriented people serving your clients the way Lindsey does.” Figuring the best financial plan of action in today’s volatile market place isn’t the easiest or simplest task. It becomes even more difficult when attempting to factor in a client’s longevity. There really is no “best
guess” as to how long someone will live. There is no crystal ball to gaze into that can determine if a client will need long-term care. “It is the biggest challenge that we have as planners right now,” Berry said in reference to the task of helping clients make their money last until their passing. “As a planner, the best I can do for a client is to put them in a position to make a better decision.” According to Berry, that “better decision” often is a move toward transferring the savings-draining risk of long-term care to an insurance agency. He explained how today’s hybrid life insurance policies with long-term care riders are “fine” tools for handling that concern, and provide flexibility and control. “These aren’t easy conversations to have,” he said. “No one really wants to admit they won’t live forever.” But, in Berry’s opinion, “good financial planners are having these tough conversations and then are using hybrid products to address what could happen under these circumstances.” It’s about giving the client peace of mind that life’s financial twists and turns will be taken care of. This is the same approach Berry takes toward fee disclosure with clients. He knows that increased regulation regarding fee disclosure can at times only further confuse clients. He also knows that some in the industry, in government and in watchdog agencies question whether current fee disclosures go far enough to inform clients. Berry’s approach is simply this: “When a client asks, tell them. When they don’t ask, still tell them. Put it out on the table. Get it out there. Be client-centric. Put it out there from the start.” Learn more about Michael Scott Berry and Michael Scott Financial online at www.mycpo.net or www.msf-advisors.com
154 Brushy Hill Road Newtown, CT 06470 855.449.7100 www.msf-advisors.com
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Breakthrough Actionable Strategies
Everest Consulting is a management and growth strategy consulting company that focuses on advising consumer branded lifestyle companies, from Fortune 500 companies to mid-sized organizations. With over 25 years of operating and management expertise, Everest Consulting provides the industry expertise along with the strategic and operational know how to help your brand achieve its fullest potential.
A Steward of Good Faith
Investing with Christian-based Principles
n the debate over mandated fiduciary standards, faith-based advisors like David Nielsen, owner of Nielsen Financial Services, don’t need government to tell them to act in the best interests of their clients – it’s inherent in their biblical beliefs and philosophy about helping others. “I am going to be held accountable as to how I serve people,” Nielson said while explaining that, according to the Bible, we are instructed to serve others as if we are serving Jesus Christ. “As a steward, I am to serve my clients in a manner worthy of their needs,” Nielsen added. This includes creating strategies that fit the unique needs of each client, teaching and guiding them, and walking with them through difficult times. “I believe strongly that people are in need of financial literacy, and I believe (with) what I have learned over the years,
I’ve done my best to guide these folks through that,” Nielsen explained. “Many of my clients are seeking fiscally responsible investing, but I also realize there are other people who have goals
and aspirations. We try to work for their situations as they need it.” One area Nielsen focuses on is helping clients analyze their investments and make sure their portfolios are properly diversified. Often, he noted, they have multiple investments but not a good blend
among investment types. “I find great value in knowing the entire financial picture of the client, and that allows for a client to have a welldiversified portfolio without the need for an excessive number of investment accounts,” he added. Nielsen likens retirement investing to a three-legged stool, saying that if one leg is short, the stool doesn’t work well. His goal is to ensure that the client’s retirement is balanced and that they are prepared for success in retirement, including having a plan for how to live well and with purpose. “I work to help my clients develop a plan that gives them a reason for living in retirement,” Nielsen said, explaining that success can come in many forms – volunteering, service, or new employment ventures. “That is important as the start to a successful new opportunity in life.” www.davidanielsen.com THE SUIT MAGAZINE - NOV
by amy armstrong
An Educating Fiduciary Viewing his role as a client educator
To those financial advisors who don’t believe a firm can make money on a fee-only basis, charging less than one percent of managed assets – think again.
Marty Watkins, chief executive officer and owner of TrueNorth Wealth, is doing just that. For potential clients wondering what type of services and what level of quality comes with a fee-only charge of less than one percentage point, the answer is this: all services resulting in complete financial management and a diversified portfolio achieved through the highest standards of fiduciary care available in the industry. “Our most practical strength is our average fee which, calculated on basis points, is just a little over half a percent per year,” Watkins said of his firm based in Salt Lake City. “And with that half of a percent, we write a two to three page summary of each client’s estate plan, we review their auto and homeowner’s insurance, their business insurance, their personal insurances including disability, health and life insurance on top of all of the investment advising, money management, portfolio creation and monitoring, and taxes. We can do all of this profitably at a half percent per year because we have put the whole thing through a process that is cost effective and tremendously beneficial to our clients.” Watkins has worked as a fiduciary since finishing college in 1993, long before the notion that a financial manager puts the client’s best interests ahead of his own became popular. He began his career in financial services by helping to create and subsequently grow the UMA (Utah Medical
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Association) Financial Services after the association voted to create a financial advisory association charged solely with helping member physicians handle personal and professional financial issues. Watkins functioned as the association’s chief financial officer and financial planner. He stayed in that position for 13 years, during which UMA/FS grew from nothing to managing more than $240 million in assets. In 2006, Watkins left to establish TrueNorth. What he didn’t have was a crystal ball to forewarn him of the Great Recession coming in 2007. “It was a very difficult time to start an independent fee-only practice,” Watkins recalled. “It was a really good thing I had a lot of money saved up, as it was much more difficult than I thought. Being properly prepared and having realistic
financial advisors had failed them. The failures by previous advisors may have been caused by a myriad of reasons; maybe it was a lack of communication during that time period when hand-holding was
At TrueNorth Wealth, commitment to our clients and integrity come first.
expectations is really important for people trying to create a business like mine.” Watkins gained clients by helping those people who, due to the 2007 recession, had become “a little bit shellshocked” about what happened with their previous advisor. Watkins was able to step in to help clients where other
a key factor for client comfort. Maybe it was a lack of coaching and reassurance that the market would rebound and the downturn was not the time to exit. Maybe it was the absence of a properly diversified portfolio. Whatever the reason, Watkins’ approach to financial management was different.
Watkins found a way to meet whatever need was being left unattended. In doing so, he grew his practice to include 220 families and numerous institutional investors, all seeking an advisor who was just as interested, or perhaps more appropriately – as invested – in their success as they were. Watkins’ slogan, “Building and Securing Your Wealth Through Evidence-Based, Academically Sound Financial Planning,” was his guiding light and remains shining. Today his firm is just shy of having 350MM under management, and advises on another $9 billion. He is a big fan of Modern Portfolio Theory, and factor based investing its focus on the use of a dramatically diversified portfolio as a tool for safeguarding clients’ wealth. From there, Watkins’ most important tool is his constant com-
munication with clients. He leaves the day-to-day running of the firm to the “brilliant folks” he hires, as Watkins describes them. Working this way allows him to do what he does best: interface with clients. “Really what I am best at is meeting with individual clients,” Watkins said. “I view my role as one of an educator.” While he does make recommendations to his clients that he, as their advisor, hopes they will follow, these are informed rather than blind recommendations. Watkins shows his clients how he arrives at recommendations he makes by providing extensive information on their options and on the possible results of various decisions. Working with the complexity running throughout the finances of high net worth clients such as the physicians and surgeons TrueNorth focuses on, is something Watkins thoroughly enjoys. “Successful people tend to create some financial complexity,” Watkins said. “Those are the ones we can help best. Inherent with complexity is the challenge of making all the right choices in each area. We look at each issue in great detail and help our clients make the best decision.” One of Watkins’ current goals is to
“replicate” himself by training others who can continue his work after he passes on. He isn’t interested in retirement; he intends to keep working as long as physically possible. But a brush with death a couple of years ago led him to consider succession planning. “I realized that there are so many people relying on me that I needed to build a backup,” Watkins said. “So I trained three other people to do what I do. Trying to replicate myself is a major goal for me, so that if something happens to me, the firm has backup.” But that recognition of the inevitable doesn’t mean a work stoppage for Watkins. Rather, it inspires him even more. “I have a missionary zeal to get this type of planning work out there,” Watkins emphasized, “because this is what people need.” Learn more about Marty Watkins and TrueNorth Wealth online at www.truenorthwealth.com
Marty Watkins, CEO and owner of TrueNorth Wealth TrueNorth Wealth Salt Lake City, Utah Office 1935 East Vine Street #120 Salt Lake City, Utah 84121 email@example.com (801) 274-1820 THE SUIT MAGAZINE NOV p.39
by a.m. lehner
Fiscal Literacy Builds Better Business Coaching Entrepreneurs in Money Management
Nearly half of new businesses fail within the first year, not for lack of owner dedication, but because many entrepreneurs and small business owners simply don’t have the fiscal savvy to navigate the many financial decisions that come with building a business.
There are so many small business owners who are great at what they do – creating a product or delivering a service – and wanting to sustain their livelihoods, but many of us, because we are not taught fiscal literacy in our personal finances, do not have that skill to translate into our small businesses,” said Sylvia Inks, CEO of SMI Financial Coaching. Inks, who grew up in a family of entrepreneurs, believes that financial literacy is at the core of successful living for everyone, but it’s especially true for the selfemployed and small business owners. “We are not teaching that skill set in the education system,” Inks said. “Now people are wanting and seeking out those skills in other places.” As a financial coach, Inks provides the knowledge and tools to educate and motivate her clients to make positive financial changes. More importantly, she acts as an accountability partner to help keep her clients on track with setting monthly budgets, cutting expenses and spending money only where it has been allocated. “People are increasingly tired of being unhappy and stressed because of their financial situations. They want to get out of debt and obtain financial freedom, but they just don’t know how,” Inks noted. With over half of the population living paycheck to paycheck, unable to save even $1,000 for emergencies, there’s no wonder why demand for financial coaching is growing. Unlike advisors, Inks says coaches don’t sell investment products. Instead, they help clients learn how to make wise fiscal choices and find alternatives to debt. p.40
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“Business debt does not have to be the norm,” Inks added. In fact, she explained how one client reported saving $50,000 in the first year of business by following her advice, creating a more profitable and self-sustaining business model. According to Inks, her primary goal is to “help small business owners find practical, low-stress financial solutions to building a business and making it a success.” Her new book, Small Business Finance for the Busy Entrepreneur, is a practical, step-by-step guide that shares the key components that have the biggest impact on creating and maintaining a solid, profitable business.
Don’t Leave Risk to Chance A Risk Number System Quantifies Date for Each Stage of Life
by a.m. lehner
Managing risk is not new to financial planning, but few advisors can pinpoint risk by using a scientific formula that maximizes results for each client’s individual life stage and circumstances. Stewardship Matters’ CEO, Scott Thomas ChFC, CAP, CKA, uses a unique Risk Number tool that aids in setting transparent expectations from the start, and is used to re-evaluate each client’s situation as life events unfold. “The risk scoring system that we utilize is based on Nobel prize-winning math and science to determine accurate and acceptable levels of risk and
ed,” Thomas said, adding that most robo-tools and marketplace discussions are geared toward younger investors. “While you are accumulating money, the alpha, beta, gamma conversation is nice and somewhat appropriate; however, the day you have to start spending that money, the rules change. You have to be savvy about the risk fluctuations in the portfolio,” Thomas said. As a retirement specialist who is very concerned about elder care issues, Thomas said that he doesn’t try to be an investment guru. Instead, he strives to meet the clients’ needs as an expert who understands strategy, tax implications and how to ask the right questions.
A cornerstone of financial planning is the recognition that everyone’s economic and life situation is unique.
reward,” Thomas said. “We align people’s investments goals and expectations with their scores.” Thomas is an advocate of customizing plans to fit the individual noting that what makes sense during the accumulation phase is vastly different from what needs to happen during the distribution phase. “The majority of the people I’m talking to are nearing retirement or are recent retirees. They have some unique challenges that are very different than the accumulators with young children who are just getting start-
Social Security and V.A. benefits are the two areas he specializes in, often uncovering thousands of dollars in benefits that clients never knew they had coming to them. “Most advisors have not spent the time to learn the rules and how to access these things,” Thomas said, adding that he talks to people on a weekly basis who didn’t know about benefits or have other income sources they’ve been overlooking. In some cases, he has found up to $34,000 in annual income that was previously missed.
The most overlooked, in his experience, is spousal benefits for wartime veterans. “A surviving spouse of a wartime veteran can receive benefits and long term care that was actually earned by the military person.” Today’s retirees face increasingly complex decisions about claiming Social Security benefits. “There are a lot of questions that need to be asked when dealing with Social Security,” Thomas
said. “People want to know that their Social Security is correct, about Medicare, healthcare and how they are going to pay for these things.” As a lifelong learner with 30 years in the business, Thomas is an expert who can help his clients navigate these complicated issues when they need it most. “I want to do work that is meaningful to others and improves their world,” he said emphatically.
511 N. Maitland Avenue , Maitland, Florida 32751 (407) 644-9411 ext 2 | www.stewardshipmatters.net THE SUIT MAGAZINE NOV p.41
PUT YOUR CLIENTS FIRST
he commitment to “paying yourself first” is one many financial advisors urge their clients to make. Professionals within the financial services industry have been repeating this mantra for so many years that it barely seems newsworthy. Unfortunately for the economic stability of many Americans, the overriding trend of “not” paying oneself first leaves many advisors touting the ideal, but with little or no client follow through.
Here are some scary statistics underscoring the lack of savings. A recent survey by the Fed showed that 47 percent of respondents indicated they would struggle to meet a $400 emergency. The Pew Charitable Trust found that 55 percent said they do not have enough savings to cover one month of living expenses. A 2014 survey by Bank rate indicated 38 percent of Americans could not cover a $1,000 emergency room visit. These numbers – and the economic lifestyles they represent – profoundly bother Jeffry J. Fruchtenicht, president of the Investment Center, based in Independence, Iowa. It is not what he wants for his clients, and it’s one big reason why client financial education plays an enormous role in the relationships he develops with clients. “We are doing a terrible job as a country and as a society in teaching our people how to be financially independent,” Fruchtenicht asserted. One of the first actions Fruchtenicht takes with new clients is to make sure that they even have a savings plan. Then, the notion of remaining invested – especially during volatile markets – quickly follows on the heels of savings as the next educational topic. He has already taken clients through two major market shakers – the DotCom flop lasting from 2000 to 2002, and the Great Recession from 2007 to 2009 that was the result of the bursting of the housing bubble. The secret to successfully getting through these p.42
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Jeffry Fruchtenicht and his team of advisors. Back row, left to right: Austin Sorg, Jeffry Fruchtenicht, Mikel Markey. Front row, left to right: Jordan Bathen, Ann VanEngelenburg, Stephanie Meyer
Jeffry J. Fruchtenicht, President Investment Center Inc. 231 First St E Independence, IA 50644-2808 800.332.0086
> events is to not avoid them. Don’t pull out of the market. “Perhaps adjust your position somewhat, but don’t pull your investments out,” he said. Stay in and stay positioned, in order to take advantage of the rebound. “One of my biggest successes in this business has been keeping clients invested in those tough markets,” he said. “It has paid them tremendous rewards to remain in the market. Every one of my clients who remained in the market are much farther ahead today than they would have been if they had exited the market when it turned volatile. They listened when I told them that now is the time to stay in and to add to your positions if you can.” Fruchtenicht has seen market ups and downs since he was a young child. His earliest interest in the investing world came at the tender age of five when his maternal grandfather – an avid investor– began teaching his grandson about the industry. Little did his grandfather know that he was fostering an interest that would grow into a lifelong career when he sat with the young lad, teaching him about how to select stocks and how to read charts. When Fruchtenicht’s full-time military career in the Army National Guard seemed threatened by budget woes, his first inclination was to follow his passion and put his economics degree to work and head to the financial services industry. After being told by a supervisor that there was no telling how many days of full-time employment he would receive in the coming year, Fruchtenicht remembers leaving the post and heading directly to the nearest men’s store to be measured for the uniform he’d need in a new career. He had his resume typeset the next day and by the end of the week, he had a job. Within a few weeks, he obtained the necessary industry certifications. Today he has seven offices within the firm he heads. Fruchtenicht did continue his career as an officer in the Army National Guard on a part-time basis and retired with over 20 years of service. “We’ve built a super team,” he said as he looked back on the nearly 23 years that the Investment Center has been in operation. Some of his team members include Ann Vanengelenburg, who has over 15 years of financial services experience. Additionally, with military service being important to him, Fruchtenicht hired Mikel Markey, who served as
Jeffry Fruchtenicht and his team of advisors in their office in Independence, IA
an aircraft mechanic in the Air National Guard and Jordan Bathen, who continues to serve as an officer in the Marine Corps Reserves. From the beginning, Fruchtenicht put the interests of his clients first. It may not have been an official fiduciary standard such as is being bandied about the industry now. But for Fruchtenicht, taking care of the client first was always a given. It’s why he isn’t particularly concerned about new regulations aimed at defining the role and the work of a fiduciary. “We always felt we were fiduciaries. Ethics say to put your clients first. We live by that,” he said. “At the end of the day, there will be further disclosures and further paperwork for the client to sign, but the overall operation of our business is not going to change – because we are already down the road anyway.” He hears the national discussion centered on whether current fee disclosure statements are adequate for informing clients of how much transactions will cost them. It’s an important question, he agrees, but
not necessarily the most important one when it comes to the accumulation of retirement savings or even the management of such. Fruchtenicht counters, “We are so worried about disclosing, but I see the bigger problem with the 401(k) industry being the lack of participation or the lack of full participation,” he said, adding, ”Most 401(k) plans have reasonable costs. The problem is that workers are not paying themselves first to create the wealth for their future. Rather than worrying about if they are spending an extra 11 cents in their fee structure, they ought to be worried about getting themselves actively involved in their plans and in building that wealth they are going to need.” Fruchtenicht has a passion to guide and educate his clients, who include pre-retirees, retirees, farmers and business people, to make these difficult financial decisions and looks forward each opportunity he is given to do so. Learn more about the Investment Center online at www.investmentcenter-inc.com/team.
Jeffry Fruchtenicht is a Registered Representative offering Securities and Advisory Services through UNITED PLANNERS FINANCIAL SERVICES Member: FINRA, SIPC. Investment Center and United Planners are not affiliated.Not a Deposit. Not FDIC Insured. Not Insured by any Federal Government Agency. Not Guaranteed by the bank. May go down in value.
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by amy armstrong
SHEEPSKIN EARNS ENTREPRENEUR
Financial Adviory Career in Corporate World
Teaching Difficult Financial Concepts To Her Clients
Straight out of college with sheepskin-in-hand, hungry and ready to take on the world in academia, Lynn S. Evans CFP® realized she couldn’t land a teaching position in Pennsylvania. Worried and concerned about finding a job, she curiously shuffled through a slew of business cards and discovered a card from an insurance salesman at Metropolitan Life Insurance. beginning in 2017 regarding fiduciary care within the financial services industry. “I am thrilled beyond words that this DOL ruling has finally come out,” Evans said. “I have been so upset with what I have seen going on in this industry by people who serve themselves more than they do their clients.” She believes the DOL guidelines will weed bad actors out of the industry. More importantly, the DOL ruling ought to shed more light on the types of commissions and fees that participants in 401K plans have been previously paying without having a clear understanding of what they’ve been paying for those services, Evans said. For now, her focus remains on helping clients prepare for retirement, increasing their financial literacy and building relationships that create a working environment in which her clients are more like partners. Learn more about Lynn S. Evans CFP® and Northeastern Financial Consultants, Inc., online at www.nefci.com
hen she quickly combed through Money Magazine regarding the “in” careers for the 1980s. That’s when she found her career path in life working as a financial advisor. “I read what it was and I realized that this was what I wanted to do,” Evans explained from her office in Pennsylvania. “I called everyone quoted in the article and they were generous enough
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to explain to me what it was they did.” She had a brief stint in the insurance business, spending a year selling insurance to pay the bills as she built her firm, Northeastern Financial Consultants, Inc., now based out of Clarks Summit, Pa., which is a fee-only firm using the fiduciary standard as its guiding principle. She’s delighted that the federal Dept. of Labor has announced new regulations
Abington Financial Center 3 Abington Executive Park, Suite 1 Clarks Summit PA 18411 O: (570) 586-1064 www.nefci.com
by annabelle preston
AHEAD FOR THE UNEXPECTED
A bread-winner spouse dies unexpectedly and a gaping hole is created in the emotional stability of the family left behind.
Insecurity as to how the family will support its needs looms large and all of the “what-if” questions are suddenly demanding answers that may not yet be available. It takes a huge emotional toll. But it doesn’t have to have the same effect on the financial health of the surviving spouse – especially when forethought and planning arranged by a prudent financial advisor occurs. “We always start with a plan,” Bob Dunlap said. As CEO of the Dunlap Gill Wealth Management Group based in Fishers, Ind., Dunlap said, “I’ve been to many funerals – some expected, some unexpected. One of the things that I love about this business is that we do the right thing in advance laying the right groundwork to make sure the family is taken care of. Just the feeling of gratitude from the surviving spouse knowing that we did everything we could possibly do to put them in a position that they could live the rest of their live without having to sacrifice is my greatest success in this industry.”
Unexpected death is part of what brought Dunlap in to the financial services industry. His father-in-law was killed in an auto collision in 1990. He was only in his mid-50s. Dunlap helped his mother-in-law through the process of settling the estate and setting up a budget for her to live by. “It really piqued my interest in this. It was the reason for the foundation of my company,” he said. “I felt very strongly about making sure the planning process is taken care of to help people in case of premature deaths.” Now more than two decades later, Dunlap continues to seek clients that he can assist with their overall financial planning. He works in a fiduciary manner with folks approaching retirement or in retirement. He’s found that 95 percent of clients prefer the fiduciary standard of care once they understand its full definition. Dunlap believes in complete transparency regarding the fees his firm charges clients. He’s frustrated by the lack of full disclosure made available on today’s 401K plans. He knows the industry has taken
steps toward a greater detailing of the fees charged in these plans, but he also knows the industry has more ground to cover. The 401K plan he uses for himself and his firm still falls short of his mark of full transparency. “I know what fees I am paying for our 401(K) and I also know that not all of them are listed on the quarterly statements that I receive,” he said. For 2017, Dunlap plans to watch for opportunities to purchase other financial services firms that may exit the business as the new federal Dept. of Labor fiduciary standard guidelines kick in to play. Learn more about Dunlap Gill Wealth Management Group online at www. dunlapgill.com.
14074 Trade Center Drive Suite 110 Fishers, IN 46038 317-770-2266 www.dunlapgill.com
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coaching the coach Sometimes the coach is the one needing some coaching, encouragement or a fresh perspective.
hat’s the reason Damita Zweiback established Coaches Corner – an online resource to help life coaches find the connections and resources they need to better help their clients. Her new website is also designed to help clients find the right coach for their specific needs. “Coaches Corner is designed to help connect prospective clients to coaches, and coaches to other coaches,” Zweiback explained. “We are creating a community of support for coaches that can also help them with the business resources they need to grow their practices.” “The business of life coaching is largely a self-regulating industry, and the profession continues to grow.” In 2012, the International Coach Federation based in Lexington, Ky., estimated that there were 41,300 active professional coaches worldwide, generating nearly $2
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billion in annual revenue. The federation estimated the 14,060 coaches in North America generated $707 million annually. The idea of having someone else help one sort out hopes and dreams, aspirations and goals isn’t a new one. In the ancient world, Socrates used a series of methodical questions to engage those who came to him for advice. This dialogue, intended to help discover the knowledge needed to identify truth, also helped them make improvements in their own lives. Dale Carnegie’s famous book, “How to Win Friends and Influence People,” published in the first half of the 20th century, did much to shepherd people’s desire for self-improvement. Carnegie’s work continued, developing business training courses on sales and leadership. In 1968, Og Mandino wrote the book, “The Greatest Salesman in the
World,” which became a best seller, and deserves some credit for establishing the notion of business coaching as a valid one. As for Zweiback, her inspiration stems from a lifelong desire to help others. She was also inspired by the title and words of the book, “70 is the new 40,” by Barbara Penn-Atkins. In it, Atkins outlines the kinds of achievements people are securing in life’s later years. They are starting new businesses, finishing bachelor’s and master’s degrees, learning a sport they’ve always wanted to practice, and also dating again and getting married. “It is inspiring to read about the accomplishments people are experiencing at a time in life that our society has traditionally seen as the time to slow down,” Zweiback said. “It used to be that our 60s and 70s were thought of as a
Cultivate happiness, create harmonious relationships, feel less overworked and overwhelmed, and have a more balanced and fulfilling lifestyle. - Damita Zweiback
time to settle and reflect, but now, it is seen as a time to fulfill other goals and remain active.” Zweiback gives Atkins’ book both to coaches joining her network and to clients. This is one way to provide coaches with inspiring fodder for their clients, and also to create an entry point into the life coaching conversations she must have with her own potential clients. As with nearly every other industry, today’s technology has made an imprint on coaching as well. Enter the world of e-coaching or electronic coaching, where those seeking help can find connections online for either a private message chat session or a Skype phone call for answers to whatever challenges they are experiencing. “E-coaching certainly has its benefits. Electronic communication is part of the cultural norm now and is accepted as a standard business practice, saving time and travel expenses.” “It’s not as personal as a face-to-face session,” Zweiback emphasized, “so it’s important for coaches to establish an element of personal connection and trust with clients. Advances in internet technology are allowing this to happen through live video chat and other face-time applications.” Coaches Corner helps potential clients wade through the process of selecting the right coach for their specific needs. “It is essential to find a coach who has the ability to listen and build the trusting relationship that is needed to benefit the client,” Zweiback said. “A client will want to find a coach who has characteristics
they feel comfortable with.” Sometimes, the previous coach isn’t the right coach for the next life issue. And sometimes, they are. Sometimes it is best to find a coach with personal experience within one’s own industry, and sometimes that isn’t necessary. “Surely, it can be helpful if a coach has had success in a specific industry. For example, a coach with manufacturing experience will have some unique perspectives about that industry which another may not,” Zweiback said. “Yet, in my experience, the goal of a coach is to help clients permanently break through obstacles, and they do not necessarily need to have walked in the client’s shoes in that specific industry in order to pro-
vide tools and strategies that can help the client transform.” Coaches Corner offers guidance on life balance, work balances, relationships, money and career, and wellness. That is right where Zweiback wants to be: providing support and guidance for clients wanting to change their lives. “There is no greater feeling really, than when you realize that you have been a part – even if it is just a small part – of helping someone else to achieve their dream,” Zweiback said. Learn more about Damita Zweiback and Dr. Z’s Coaches Corner online at www.coachescorner.com
PO Box 15266 Arlington, VA 22215 +1 (517) 402-7471 | www.coachescorner.com THE SUIT MAGAZINE NOV p.47
by amy armstrong
JUST THE BEST POLICY; IT IS THE ONLY POLICY
f you ask Charles Cooper what he does as a financial planner, a big part of his answer will be: I have retired more than 150 times, buried 30 spouses and put 450 kids through college. The context is more about what he’s helped his clients achieve and thrive through, but its literal application is something he legitimately can use to answer the inquiry of a potential client when the meet and greet conversation turns toward what Cooper can do for that client’s long-term financial stability. His honesty is how Cooper, president of The Master’s Financial Group, Inc., with offices in Greeley, Colo., and Grand Rap-
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ids, Mich., builds authentic client-advisor relationships. “It is all about the relationship,” Cooper said. “It is all about me being honest with the client and the client being honest with me about what he or she can do and what he or she will do as we establish their plan and begin working on it.” He tells his clients straight up that the value of their investments will drop and the value will increase. It is part of being in the market. But what he also emphatically tells them is to follow his example. Cooper willing shows his own portfolio history and holdings to clients for their own review and more importantly, the improvement of their financial literacy.
He wants his clients to not only see, but to understand, that he is rowing in the same boat he’s put them in to. The old saying, “the proof is in the pudding,” has just one alteration in Cooper’s world where, “the proof is in the portfolio.” Clients looking for a rate of return that secure their retirement future pretty much cannot avoid the stock market, Cooper believes. Equities are a big part of the equation that results in the type of wealth accumulation prepares one for a financially secure retirement. “Equities is where they are going to have to be if they want to make their money last,” Cooper said. His approach to financial planning is straightforward: Tell him what the goals are and
that.” Another characteristic of Cooper’s financial planning is that he handles his client’s money as if it were his own. The meaning of fiduciary in terms of putting the client’s needs ahead of that which benefits the advisor isn’t just a
with children, grandchildren and great grandchildren of long-time clients in an effort to guide following generations. One of his client families is now has five generations being advised by Cooper. He laments the lack of financial education in today’s American public schools and hopes his work with clients and their subsequent generations helps improve financial literacy among younger Americans. He knows the American economy has its flaws, but he also sees it as the best hope for the future. “What I have learned the most is that in spite of everything that goes in the country we live in, capitalism is the worst economic system in the world except for all of the others,” Cooper said. “I went in to the business to be able to help people and I look back at all the kids that have gone to college because their
For over 130 years, we have been the embodiment of our motto “Where quality begins and service never ends.” how time is available to accomplish those goals. Tell him what dollar amount can be set aside each month earmarked for such and from there Cooper can map out a strategy. He feels most poised for client success when retirement’s fixed costs – housing being at the top of the list – are covered by a combination of Social Security benefits and pension payments. He then prefers to set up a five percent payout of savings to support the retiree’s other needs. “I like to keep it pretty simple,” he said. “I try to take away all of the minutia and the three-headed monsters.” He views the declines in a portfolio’s value as temporary and the advances in its value as permanent. “If you help your people understand that, it is just amazing what can be done with that approach,” Cooper said. “I have people doing that for 35 years now who are experiencing complete success with
spoken notion; it is how he conducts every part of the day-to-day operations at The Master’s Financial Group, Inc. With his clients enjoying increased longevity – just as much of America’s older generation is now doing – Cooper knows his role as their fiduciary is more important than ever. When he first started as a financial planner, the average client couple consisted of a husband at age 65 and wife at age 63 or 64. They both smoked at one point in their lives, thus cutting their longevity. The husband lived to age 69 and the wife to age 74, on average. Not anymore. “Take a look at what our landscape is today,” Cooper said, noting that most retirees have not smoked; most are far healthier than their parents were and many will live to see ages 90 and greater. “It is a different time now. More than ever, today’s retiree needs someone that works for them as a fiduciary.” While most of Cooper’s clients have assets of $750,000 plus, he also works
parents followed my advice and I see all the other opportunities that have been created in the lives of others and it makes me feel as if I have done something good with my life.” Learn more about Charles Cooper and The Master’s Financial Goup, Inc., online at www.mastersfinancialgroup.com
6500 29th Street Suite 210 Greeley, CO 80634 www.mastersfinancialgroup.com Securities offered through Securities America, Inc., member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. The Master's Financial Group and Securities America are separate companies. THE SUIT MAGAZINE - NOV p.49
THE SUIT MAGAZINE - JULY 2016
January Game Changers in the Financial Industry Bipartisan Budget Act of 2015 Key Economic trends to watch in 2016 Suitability Vs. Fiduciary Standards Choosing the right Financial Advisor
Small and Mid-sized Business Growth Educating our Kids Financial Literacy Markets & Personal Finance
Innovation and Leadership Estate and Succession Planning Inspiring Comeback Stories Small businesses have faced
Big Data and Cloud Monetizing the Web Information Privacy and Cyber Security Trends Do-It-Yourself Models Expand Role of Technology & Outsourcing
Business of Presidential Politics Reading Between the Lines PACK Money Misappropriated Recovery and Growth of the Middle Market
July Important Trends and Challenges for Executives Startups Overvalued Silicon Valley Bubble Retail Financial Advice Consumer Changes in Attitude & Behavior Wealth Concentration
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