Page 1

Issue 76

JAN 2017

2016 EDITORS CHOICE

The Real Deal

Tilman Fertitta: Billion Dollar Buyer

Rising Dragon Hidden Dangers

Investing in Vietnam Enormous Potential

Penny Parasites

Wall Street Institutions & Regulators

The Shaman of Wall Street

Redefining The Investment Experience


publishers note

ISSUE 76 | JAN 2017

Publisher Erwin E. Kantor Managing Editor Michael Gordon Editor in Chief Helen Moss Editorial Robert Jordan Sean Goldstein Rachel Feinstein Peter Greenberg Sam Jones Writer-at-Large L.A. Rivera Staff Writers Robert Jordan A. Marie Velthuizen Jude Scinta Matthew D. Edward Amy M. Armstrong Annabelle Preston A.M. Lehner Contributors Steven Selengut Illustrators Paul Kales Steve Delmonte Steve Smeltzer Norman Jung Marketing / Advertising Sean Rome Eric Daniels For advertising inquiries, contact: advertising@thesuitmagazine.com 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.

Tax the rich certainly, but leave the super-rich alone.”

How will Trump Elect lead us into 2017? A new president-elect stepping in on January 20th, has made promises to make America great again, a campaign slogan which he stole from Ronald Reagan in 1980 when the old Gipper ran for president. Now the old adage “Yes we can,” is a thought of the past. Yes, he does plan to “corporatize” the White House. But, will Trump take care of the small businessman in Corporate America? Only time will time. We all look to progress which will impact our daily lives, marking a historic day in America, when Trump Elect steps into office and grabs hold of the economic and political reins of this country. Leadership is often overlooked! The media, social platforms train us how to think and how to creatively attack problems, but not so much in how to steer our companies in bold directions. Throughout the issue you will learn about many people the editors chose that have inspired, innovated and contributed to the workplace. Our cover story highlights Tilman Fertitta on pg 24, a successful entrepreneur who wants viewers to learn marketing, operations, and financial aspects of running a business from his new show, The Billion Dollar Buyer. On pg. 20 read about how Penny Parasites, Wall Street Institutions & Regulators siphon roughly $200,000,000 pennies per day from our investment and retirement portfolios into Wall Street’s already deep enough, don’t ya think, pockets. Take a journey with us about how digital and technological advances in the banking industry forced one of the largest bank check supply

companies in the U.S. to adapt and grow, on Pg 16 The Quiet Rise of the Deluxe Corporation. If embracing innovation could be written on a prescription pad, Stephen Klasko’s pen would go dry doling it out as the treatment plan for what ails today’s medical systems. Embracing innovation article can be found on pg 12. And last but not least the Shaman of Wall Street shares his story about how redefining the investment experience, being present is to be mindful of one’s actions and impact and if we’re not present to realize our true potential then we are selling ourselves short and not truly sharing our gifts. The Master Plan: The realization of a visionary drive to redefine America and foster opportunity by innovating businesses. Throughout 2017, America will embrace the changing physical, financial, technological, and cultural landscape of America to position current and future generations to achieve and succeed. Ladies and Gentlemen, a leader is one who can better lead us into the future, as well as respect and be responsible with the power bestowed upon them. True leadership requires vision, focus, advocacy and many other attributes, some of which are highlighted in this issue and on our cover.

Happy New Year,

Erwin Kantor

Erwin Kantor, Publisher


Issue 76

CONTENTS

JAN 2017

JAN 2017

2016 EDITORS CHOICE

The Real Deal

Billion Dollar Buyer

Rising Dragon Hidden Dangers

Investing in Vietnam Enormous Potential

8

Penny Parasites

Wall Street Institutions & Regulators

The Shaman of Wall Street

Redefining The Investment Experience

The Infrastructure of The World Jmmy Wales, founder of the world’s most popular online encyclopedia “Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge.” That’s how Jimmy Wales describes his vision for Wikipedia, one of the Internet’s most popular and frequently visited sites.

FEATURES

10

Shark With A Heart

Mark Cuban, billionaire investor and philanthropist balances investing with giving. Self-made billionaire and Dallas Mavericks owner Mark Cuban might have built an empire through shrewd business acumen, but the Shark Tank co-star’s brash bite often hides his softer side.

12

Stephen Klasko Embracing Innovation

If embracing innovation could be written on a prescription pad, Stephen Klasko’s pen would go dry doling it out as the treatment plan for what ails today’s medical systems.

14

22 24

30

20

The Rise of the Deluxe Corporation

Penny Parasites

Wall Street Institutions & Regulators Class Action Suit: Cause of Action Number Three

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The Shaman of Wall Street

Redefining the Investment Experience

Sustainable Lifestyles

Everything was going fine between banks and their customers for years.

The Real Deal: Tillman Firtatta

Tilman Fertitta, CEO of Fertitta Entertainment, Inc. and Jim Ackerman, executive vice president of CNBC’s evening line-up, had been talking for some time about creating a concept

A california real estate firm goes green, attracting international investors. Fifty percent of carbon emissions in this country come from buildings. Not coal-fired power plants or factories, but the regular glass and steel office buildings people work in, and the concrete and wood homes they inhabit.

16

Rising Dragon Hidden Dangers

Investing in Vietnam holds enormous potential, but can trap the unwary

10

8


BUSINESS / FINANCE

34 Taking Money Off “THE STREET”

Wisconsin wealth managers build true relationships with clients

37 Ramen and Peanut Butter Dreams: Helping his clients live their dream

38 Conscience - Based Investing

Investing in sustainable, ethical business doesn’t kill returns

40 Transitioning Within Retirement

It’s not just about a comfortable beach chair, it’s about supporting change

44 Retirement Planning? Think Taxes

Western New York advisors take unorthodox approach to help clients thrive

48 Technology to The Rescue

Wisconsin firm uses early warning system to protect client wealth

50 Retirement Planning Beyond the Numbers Funding the nest egg is only the first step to a successful retirement

52 Does Your Advisors Really Know You if not, neither one of you are stepping up

Every Dollar Counts 54 Don’t leave any possible monetary gains on the table

56 Adapting to a Changing World A concierge boutique-type services

57 Presenting The Case Schuyler Roche Crisham LLP

Trump Vs. Trump


THE SUIT MAGAZINE EDITOR’S PICK

THE INFRASTRUCTURE OF THE WORLD JIMMY WALES

FOUNDER OF THE WORLD’S MOST POPULAR ONLINE ENCYCLOPEDIA BY ANDREA LEHNER

“Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge.” That’s how Jimmy Wales describes his vision for Wikipedia, one of the Internet’s most popular and frequently visited sites.

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wned by Wale’s nonprofit organization, Wikimedia Foundation, Inc., Wikipedia thrives because of collaborative editing. That means a vast community of volunteers, donors, and users keep the content fresh, informative and accessible. For Wales, keeping the content free was of paramount importance. Wikipedia’s free licensing model allows anyone, including entrepreneurs to repurpose site content for their own benefit. Overcoming the digital divide — the gap in Internet connectivity, device ownership, and technological fluency between the rich and poor — empowers people to make better choices regardless of background, education, wealth, or location. Free, accurate content can help the poor overcome the divide. Wikipedia currently has more than 41 million articles available and is published in 288 languages worldwide, although English articles are most common. “Wikipedia is part of the infrastructure of the world,” Wales said. Considering that Wikipedia was founded in 2000 — the same year most of today’s high school juniors were born — we are now seeing an entire generation raised on a diet of collaboratively edited articles and information pages. Wikipedia has become their go-to for homework assignments and research. Wales, a 50-year-old Alabama native who now lives in London was educated in the self-directed Montessori approach, which gives students a choice of learning activities within a “prepared” environment. For Wales, this included reading encyclopedias — lots of them — and created an appreciation for the value free access to knowledge can provide.

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Wales studied finance before founding Wikipedia, entering a doctoral program but later withdrawing before graduation. He has since received several awards and honorary degrees, and serves on a number of research and academic advisory boards. TIME Magazine included Wales on their 2006 “100 Most Influential People” list of scientists and thought leaders. Wales has overcome continued doubt over Wikipedia’s validity, with critics charging that a collaboratively edited site will be infested with bias, factual errors, and false information. “There has been lots of research on the accuracy of Wikipedia, and the results are mixed — some studies show it is just as good as the experts, other show [that] Wikipedia is not accurate at all,” Harvard Business School professor Feng Zhu told Forbes in 2015. Zhu, a technology and operations professor, chronicled in a paper the rise and fall of the Encyclopedia Britannica, which many argue Wikipedia supplanted. While critics claim the site cannot be accurate, Wales’ vision of a peer-reviewed, volunteer-run model has proven far more reliable than naysayers care to admit. The scientific journal Nature compared Wikipedia and Britannica in a 2005 study and found them both to contain roughly the same number of factual errors. That’s because a devout community of contributors takes pride in ensuring the website provides factual information, accurate and thorough source citations, civil discourse, and above all, fun. The site’s editing processes and protections have undoubtedly contributed to its success, which currently

boats 5.6 million page views per hour. Beyond managing Wikipedia, Wales also remains an ardent advocate of freedom of information and expression. He continues to fight speech and Internet restrictions under oppressive governments through his UKbased non-profit, the Jimmy Wales Foundation. Wales started the foundation in 2015 to assist imprisoned bloggers and activists. When speaking about Wikipedia’s global web presence at the BBVA Compass’ Bright Perspectives Forum, Wales jokingly pondered what people who don’t visit the site at least once a month are doing online. “How do you avoid it? It’s right there with almost every search in Google,” Wales said. Much of this, Wales explained, is attributed to non-information seeking web users — those who only use the internet to communicate with friends and family or to make online purchases. The greater concern, he added, is increase in mobile technology and users who predominantly only use mobile devices to access the web. The challenge, he explained, is not in reading Wikipedia on mobile devices, but rather from the contributor side — writing and editing for mobile is a different game from desktop publishing. Wales said the site still needs to adapt more effectively to mobile technology. “The shift to mobile is huge,” he said, adding that Wikipedia recently saw a landmark moment when over half of its daily visitors came through mobile browsers. “Fortunately for us that’s mostly been additive. We aren’t losing desktop traffic. We are getting more traffic.” www.immywales.com


JIMMY WALES, CEO AND FOUNDER OF WIKIPEDIA

THE SUIT MAGAZINE JAN p.9


THE SUIT MAGAZINE EDITOR’S PICK

SHARK WITH A HEART - MARK CUBAN

BILLIONAIRE INVESTOR AND PHILANTHROPIST BALANCES INVESTING WITH GIVING BY ANDREA LEHNER

Self-made billionaire and Dallas Mavericks owner Mark Cuban might have built an empire through shrewd business acumen, but the Shark Tank co-star’s brash bite often hides his softer side.

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uban, a Pittsburgh native from a middle class home, made his first millions selling bootstrapped tech start-ups MicroSolutions and Broadcast.com in the 1990s. Now known for being an outspoken, keen venture capitalist and probing investor on Shark Tank, Cuban also is an active philanthropist. Cuban donates to a diverse range of charitable causes. Through the Mark Cuban Foundation, he provides support and funding for cancer research, disaster relief, education and patent law reform. Cuban’s support for wounded veterans prompted him in 2013 to found the Fallen Patriot Fund. The fund has awarded more than $5million in grants, and solicited donations from third parties, to assist the families of veterans wounded or killed during the Iraq War. Even before Cuban created his own foundation, giving back accompanied the entrepreneur’s growing success. One of his earliest philanthropic interests was Junior Achievement — a charity that partners with local businesses to teach financial readiness, entrepreneurship, and other skills to school children — which he credits with preparing him during high school to reach his adult goals. But writing checks isn’t Cuban’s style. Despite his considerable giving, Cuban told Reuters recently

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that he finds charities inefficient, and often burdened with too much overhead. Cuban prefers a more hands-on approach, he said. “Instead, I pay people’s bills and help solve problems,” Cuban said. “I think I’m able to more readily and directly help people who need it and not pay for the commercials and administration of all the duplication that exists across charities.” Cuban, known for being able to cut to the chase with would-be entrepreneurs, said he learned long ago to be wary of anyone trying to sell him a sure thing. In his experience, easy usually equates to scam. Very competitive by nature, Cuban stays at the top of his game by continuing to learn about rapidly developing industries — such as machine and deep learning — to inspire fresh business ideas. He strongly believes that success means holding knowledge and understanding how and when to use it. “The risk is to be prepared. The more prepared you are, the less risk there is,” Cuban offered advice to new entrepreneurs in a University of Common Knowledge interview. “If someone else knows more than you do about your business or industry, what are you doing? How can you think you’re prepared?” Having made his first millions in the tech sector, it’s not surprising that Cuban still follows technology trends. He recently, publicly urged

President-Elect Donald J. Trump to commit $100 billion to robotics research and development, as opposed to traditional infrastructure spending, something the incoming administration has said will be a priority. Robotics spending, Cuban claimed, is both forward-looking and necessary if America wants to maintain its technological and competitive advantage globally. “We have to win the robotics race. We are not even close right now,” Cuban wrote in a Dec 18 “Blog Maverick” blog post. America lags because policy-makers have underinvested in domestic robotics firms. China, in contrast, is currently spending $3 billion annually on robotics research compared to U.S. spending of $100 million, only half of which goes to domestic manufacturers. The cause closest to Cuban’s heart, however, is his family. A father of three, Cuban has said he works hard to raise his kids “grounded,” and ready to earn their way. And the television “shark” is not trying to instill a cutthroat mentality into his kids. Instead, Cuban prefers to involve his kids in his philanthropic ventures. “That’s not how I run my businesses, so no, that’s not what I pass along,” Cuban told Reuters. “Nice goes much further than mean.” www.markcubancompanies.com


MARK CUBAN, OWNER DALLAS MAVERICKS CO-HOST SHARK TANK

THE SUIT MAGAZINE JAN p.11


THE SUIT MAGAZINE EDITOR’S PICK

THE PEN IS MIGHTIER THEN THE SWORD

EMBRACING INNOVATION

BY AMY ARMSTRONG

If embracing innovation could be written on a prescription pad, Stephen Klasko’s pen would go dry doling it out as the treatment plan for what ails today’s medical systems.

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e is the president and chief executive officer of Thomas Jefferson University and Jefferson Health in Philadelphia, Pa., but his influence in terms of changing the way medicine is delivered and physicians are trained extends much further. Klasko is heralded as the loudest cheerleader for a bipartisan approach to healing health care. In his latest book, “We Can Fix Healthcare Now,” co-authored by Michael Hood and Gregory Shea, Klasko lists 12 disruptors that he considers key to repairing the nation’s health care system. Each disruptor begins with the “thou shalt” phrasing with its reverent tone to indicate the seriousness of the nation’s health care situation, but also provides a sort of Monty Python comedic relief to a topic that even Klasko himself indicates is draining the fun and life blood out of modern medicine. Some of those “thou shalts” include removing the volume incentive from the payment system and replacing it with incentives based on optimal outcomes, providing the right care for patients across a coordinated system taking the patient’s conditions, services rendered and time factors in to account and creating a vendor-driven, patient centric

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system of health-oriented apps that are derived from just as much research as goes into shopping on Amazon or selecting movies on Netflix. If it sounds as if he is bucking the traditional system, then your hearing is excellent. He took on the bureaucracy of Medicare at the nation’s largest retirement community – The Villages – in Florida where he created a model that made Medicare accountable to the patients versus doctors being accountable to Medicare. The result was an innovate geriatric model of delivering primary care that is patient-centric and assertive in helping senior citizens remain as healthy as their longevity rates increase. Today much of his work focuses on training physicians in medical school to be more than just accurate diagnoses’ of disease: Klasko wants them to be leaders in their industry and extended community. His book, “The Phantom Stethoscope: A Field Manual for an Optimistic Future in Medicine,” is standard reading at nearly every medical school in the United States due to its content addressing health care leadership and its support of technology in modern medicine. He is a trustee with the Certifi-

cation Commission for Healthcare Information Technology as well as being a faculty member of the Governance Institute and the American College of Physician Executives. He stays in touch with day-today medicine as a professor in the Dept. of Obstetrics and Gynecology at the University of South Florida College of Medicine. Klasko’s medical career began in obstetrics with his residency in obstetrics and gynecology at Health East Teaching Hospitals and became a diplomate of the American Board of OB-GYN in 1984 after receiving his medical degree from Hahnemann University in Philadelphia. In strengthening his support of the 12 disruptors, Klasko said, “Today what we’re seeing are the pressures of opening up access to an inefficient, ineffective and, in some cases, failed system, then being amazed that cost hasn’t decreased and quality hasn’t improved. These are things that could be changed that would really help solve that.” Read more about Stephen Klasko online at: www.leadership.jefferson.edu/about


STEPHEN KLASKO, PRESIDENT AND CEO

THE SUIT MAGAZINE JAN p.13


THE SUIT MAGAZINE EDITOR’S PICK

SUSTAINABLE LIFESTYLES REQUIRE GREEN BUILDINGS

A CALIFORNIA REAL ESTATE FIRM GOES GREEN, ATTRACTING INTERNATIONAL INVESTORS BY MATTHEW D EDWARD

Fifty percent of carbon emissions in this country come from buildings. Not coal-fired power plants or factories, but the regular glass and steel office buildings people work in, and the concrete and wood homes they inhabit.

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hris Jafarieh thinks that needs to change, and he’s working to make it happen. If people want to reduce their impact on the environment, inhale fewer toxins and drink cleaner water, they are going to need to live in eco-friendly buildings. Jafarieh’s California-based Green Diamond Group – a division of Blaqk Diamond Group – advises investors in how to put their money behind sustainable developments across California to deliver those buildings. The goals behind green building – or “living buildings” – include water and energy production on site (not yet completely achievable, as Jafarieh noted), considering the impact of a building on the land, mitigating climate change and promoting the health and wellness of those inside. “My goal is to work only with projects that make sense, not only financially, but for the environment as well,” Jafarieh said recently. He said that improving the environment, while the right thing to do, does not mean sacrificing the bottom line, adding that there’s a business case to be made in addition to the moral one. Jafarieh’s comments are backed up by the World Green Building Council – a network of national organizations encouraging sustainable construction in more than 90 countries – which wrote in a 2013 report that eco-friendly structures feature several unique benefits, including reduced operating costs and better health outcomes for the people inside with fewer toxins polluting the air inside. The report also noted that the WGBC expects real estate investors soon will see the value of sustainable buildings, which will give eco-friendly properties a boost in value relative to traditional structures. He was well-positioned to enter the green

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building market. Jafarieh spent years in commercial real estate, starting in 2007, just before the financial crisis sent shockwaves through the property market. As the crisis played out, Jafarieh realized he needed a change and left southern California to think for a while. He tilled farmland owned by his cousin, wellknown health and wellness author, David “Avocado” Wolfe. “It taught me that I really need to get into something, and learn something that wouldn’t give me too much exposure to the market dictating if I have a career or not,” Jafarieh said. At the same time, the 50 percent statistic regarding carbon emissions was stuck in his mind. “I couldn’t believe what I’d read. I had to fact-check it,” he said. The facts checked out, however. Most buildings are wasteful in terms of energy, and the materials used in construction often are toxic. These old, inefficient buildings pump carbon dioxide into atmosphere 24 hours per day, seven days a week. Jafarieh re-entered the commercial real estate market in 2012 and founded the Blaqk Diamond Group. He started cutting deals immediately, but took a careful approach to the clients he worked with. “You can’t just bring a deal to a client because it has a good cap rate or you think the market is going to shift that way … you need to make sure it’s something your client can handle,” Jafarieh said, noting that he’s pulled $50 million and even $75 million deals off the table because he felt the match between project and client wasn’t quite right. After establishing Blaqk Diamond, Jafarieh went back to being a financial green thumb, creating Green Diamond as a division within

the company. Green Diamond’s purpose was to jumpstart sustainable projects in southern California – which in recent years has faced severe drought, among other environmental challenges – and match investors with projects that consider more than just the bottom line. And although Jafarieh does work with investors from abroad (a large number of clients are EB-5 “investor” visa-holders who receive a visa in exchange for creating 10 jobs or investing $500,000), he believes a local touch is vital to ensure a good match between projects and funders. After all, the disconnect between developers and host communities is what can be partly blamed for the destructive nature of development. “We need to make sure we know who is investing in our area,” he said. “I can’t have a fund from New York or London building something in my community if they don’t have skin in the game long-term.” For foreign investors, Green Diamond goes through projects with a “strainer” and makes sure to get through the language barrier to fully answer all of the questions. “The EB-5 program is a great way to inject money into the U.S. economy,” Jafarieh noted. For 2017, Jafarieh’s goal is to spark a desire in more firms for building green. He said that he will work with anyone, anywhere, on projects that prioritize sustainability. Jafarieh also often writes on the subject, highlighting the need to put the planet first. In a recent Green Diamond blog post he wrote: “Earth is the only planet in our solar system with a sustainable ecosystem, providing us with every resource we need to survive. We are blessed to live here.”


Blaqk Diamond Group 19800 MacArthur Blvd, Suite 300 Irvine, CA 92612 Phone: 949.724.4535 www.blaqkdiamondgroup.com

Principal Chris Jafarieh is a Founding Member of Blaqk Diamond Group and the creator of Green Diamond, an environmentally conscious division of Blaqk Diamond Group.

THE SUIT MAGAZINE JAN p.15


The Quiet Rise of

Deluxe Corporation BY JUDE SCINTA

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verything was going fine between banks and their customers for years. Sure, things became routine and each took the other for granted at times, but that happens in relationships. In recent years, however, the “twenty-first century itch” set in when something irresistible strutted onto the scene; they called it digital technology. It had everything – intrigue, discretion, and convenience – and from that point on, banks and their customers wanted to try new things. Deluxe Corporation found itself in a precarious situation as digital technology

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continued to turn heads. Since they had invented the first personalized flat-pocket checkbook in 1915, they had grown into one of the largest bank check suppliers in the U.S., but the demand for their flagship product was steadily eroding. Lee J. Schram was new to Deluxe when he was named CEO in 2006. On his first day, he held a management meeting and asked for the financial report to be presented to the team. The monthly recap was not good; they were off 9-cents a share and the forecast for recovery in coming months was dismal. After the CFO delivered the news, an

awkward silence filled the room. Think cricket chirps. Or, Schram puts it a different way. “It was the longest ‘Jeopardy’ moment I've seen,” he said, referring to the classic tune played during the game show’s final round that poses the most difficult challenge to the contestants. It was at that moment, Schram saw that his team lacked accountability and though he was disappointed, he was not disheartened. Armed with his background as controller turned CFO of NCR Corporation, and having run a few tech businesses, he set out to direct the future of Deluxe by


using digital technology to transform two major business units, financial services and small business. Five Phases The close of 2016 marked the seventh consecutive year of revenue growth for Deluxe with the trend expected to continue throughout 2017. “On our cash flow, which is important to investors and to people that want to invest in the stock and the company, 2016 is our eighth consecutive year of growth,” said Schram. Often asked about the company’s transformation, Schram describes it methodically, much like his approach to leading the company. He packages the journey as the Five Phases. The first phase, Assess and Act, began immediately in 2006 with an evaluation of Deluxe's processes, products, and services to determine the company’s strengths and weaknesses. The Strategy and Focus phase followed.

“I tell the story of who wanted to come to a dying check company other than me. Not a lot of people. And so, I had to create a strategy to focus on what we were all about – the idea that we were a growth engine for small businesses and financial institutions which today still is our vision,” said Schram. Phase 3 Concentrated on Leadership and Culture, and Schram recruited a management team that is still intact today with little turnover. By 2010 they were ready for Phase 4, Revenue Growth, and since 2013 and through 2018, Phase 5, Transformative Revenue Growth has been in full swing.

banks attract, acquire, and retain customers. Company acquisitions strategically and consistently made over the years have played a major role in providing these services. At the close of 2013, Deluxe acquired Destination Rewards, a leading provider of customer rewards and loyalty programs. Today, these programs have not only been embraced by banks, they have also helped Deluxe enter other markets. “Our largest company on the bank side is Citi, and we have a program with them that allows Citi customers to get rewarded from everything from using their debit or credit card, opting to recieve electronic statements, and other services that help consumers and Citi with efficiency. These are all online digital rewards that we’ve come up with for them,” Schram said, adding that Deluxe has also developed programs for Verizon, Allstate, and AARP. In 2015, Deluxe acquired Datamyx, a provider of integrated information, technology and analytics to help financial institutions target loan candidates. And, with a proprietary product called SwitchAgent, Deluxe makes it possible for consumers to switch banks electronically. To date, Chase Bank, Citi, and U.S. Bank rank as Deluxe’s largest banking customers, and since Schram has been at the helm, Deluxe has made some 20 acquisitions to support their overall strategy.

Financial Institutions As Deluxe challenged itself to create innovative digital solutions for financial institutions, they also had to figure out how to get banks to listen to what they had to offer. In a new technological era, why would banks think that their traditional check printer could also provide online banking services? Tough paradigm to shift. But Deluxe stayed on point and developed a suite of services to help

THE SUIT MAGAZINE JAN p.17


Small Businesses While financial services were evolving, an equal effort was fueling the transformation of Deluxe’s small business unit which traditionally provided customers with checks and forms. Through surveys and other touch points, Deluxe learned that business owners were struggling with areas of branding, promotion, and selling, so Schram decided to test-drive these services. And found a favorable response from customers. Company acquisitions followed and included businesses that provided logo design, website design services and hosting, email marketing, and search engine optimization and marketing. “Think of all digital services that are helping small businesses brand themselves, promote themselves, and sell to their customers. That was our initial focus,” said Schram, adding that Deluxe currently works with 4.5 million small businesses, and hosts over one million websites. Amanda Brinkman, who joined Deluxe in 2014 as chief brand and communications officer shared her perspective. “We’ve helped small businesses operate their business for over 100 years, and about ten years ago we wanted to evolve those offerings. We saw that they were struggling with the marketing side of their business. We wanted to give them the opportunity to have that one-stop service partner that p.18

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can help them operate their business with things like payment solutions, checks, and other services, but also help them market their business because we see how important that is and it can make such a difference in the success of small businesses.” Brinkman has been instrumental in directing Deluxe’s own rebranding effort using content marketing. With rich stories told through Brinkman's brainchild, the Small Business Revolution, Deluxe is forging relationships with small business owners online and in person by providing an innovative learning platform. The initiative is shifting the perception of Deluxe from a has-been to a company to watch. “For us, we were really struggling with brand awareness. People either haven't heard of Deluxe, or when they have heard of us they know us just as a check printing company. We're so much more than that,” said Brinkman. I was very proud that this idea could advance business goals of raising awareness about Deluxe, but do it in a very genuine way.” According to Schram, one of Deluxe’s leadership principles states, “It’s hard to look smart with bad numbers.” Considering their consecutive years of growth and future projections, the St. Paul, Minnesota based company is looking quite bright.

Deluxe Corporate Headquarters 3680 Victoria Street North Shoreview, MN 55126-2966 651-787-1068 www.deluxe.com Amanda Brinkman Chief Brand and Communications Officer Deluxe Corporation


THE SUIT MAGAZINE JAN p.19


BY STEVEN SELENGUT

PENNY PARASITES:

Wall Street Institutions & Regulators Class Action Suit: Cause of Action Number Three Did you see the 1999 comedy "Office Space"? It describes a software scheme to embezzle pennies from random financial transactions and funnel them into a hacker's bank account. A year later, Wall Street changed its pricing protocol from an ancient fractional system to a state of the art decimal methodology. "Watch the pennies, and the dollars will take care of themselves,� Ben Franklin. Some conspiracy theorists suggest this was a "front runner" for an institutional campaign to steal millions in decimal dollars from investors. But, why would the "Masters of the Universe" bother when they can perpetrate their larceny in plain sight, shamelessly, every trading day... and with regulatory blessing. Most "Office Space-ish" of all the insidious fees tacked on to commissions and One Flat Fee Only Accounts (OFFOAs) is the "Activity Assessment Fee" deducted from every "sell" transaction on Wall Street... Google "SEC Fee - Section 31 Transaction Fees" to learn how these "regulator and exchange fees" find their way onto your confirmation notice... even your OFFOA. At approximately five million "sell" trades per day, roughly $200,000,000 pennies are siphoned from our investment and retirement portfolios into Wall Street's already deep enough, don't ya think, pockets. Investors big and small (the largest bloc of taxpayers), are paying twice to regulate Wall Street...the regulatory posse stands idly by, approvingly, as the industry boomerangs SEC Fees targeted at the securities markets right back at consumers... two million bucks per day.

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Yes, we're just getting started. Most individual equity investors recognize the benefits of including top tier foreign companies in their portfolios. Individual MCIM portfolios, for example, may contain one or more of a select group of ADRs (American Depository Receipts)... those meeting the fundamental quality and dividend income requirements of IGVSI companies. The withholding of foreign taxes on dividends is as much a tax on the middle class as it is on the rich 'n famous, while the latter are most likely to benefit from an income tax credit. Foreign taxes paid may be used as such unless: You fail to file the proper paperwork, or (go figure), the ADRs are housed in a tax deferred portfolio (IRA, 401k, etc.). ADR dividends earned in your "deferred taxation" IRA and 401k accounts are taxed as ordinary income when taken at retirement, even though you paid the foreign income taxes upon receipt... Questions: When taxing the frugal, those who have planned for retirement, why do we punish them with 100% "ordinary income" tax rates when we have the technology to separate the distributions into lower tax rate categories. Should they and Social Security recipients be taxed at all? And then there's the Custodian's "Office Spacey" hand in your pocket.... If your ADR does not pay a dividend, your custodian takes a fee of from one to three cents per hundred shares (but never less than $2.00), directly from your investment account, pretty much just because they can. If there is a dividend, the custodian "pass-through fee" is deducted from it. One can only imagine how many billion pennies this process produces. Conservatively, I'm guessing that my average six figure client holds 200 shares of 5 different ADRs per year. If there are 25 million similar portfolios, that's roughly 50 billion more pennies annually to the "Masters". Why is it more expensive for more shares? Why can't these pennies be part of the total cost to the broker dealer of doing business with the custodian? For IRA accounts, custodians also charge annual maintenance fees, and

termination fees if you have the audacity to move your account... or die. Approximately 50 million households pay roughly 55 maintenance fee dollars each, per year, in custodial fees...275 billion more pennies for Wall Street, at $9,000 per second. So, in reality, there is no such thing as a flat fee only or a commission only arrangement... there is always another fee, just like the $34 I just paid for the checks used in my "no fee" bank checking account. Question: If we pay for every conceivable custodial action, shouldn't the custodian have fiduciary responsibility, at least as much as the generous employers who provide the benefit programs (how backasswards is this)? Observation: I'm beginning to understand how Wall Street Institutions can afford to pay executives as outrageously as they do... it's our damn pennies! Aren't you about sick of the "service fees and charges" that slap you around almost everywhere: utility bills, rental cars, hotel rooms, ad infinitum? If you added all of these consumption and usage charges to your federal state and local taxes, what would your actual income tax rate become? The king of England may not have been such a bad guy after all. Why not one consumption tax for each political subdivision, just think of the bureaucracies that could be eliminated, including the IRS! Wall Street, as you might expect, picks our pockets without any explanation whatsoever. Their creative and versatile "Service Fee" is paid by almost all investors, even those who have an OFFOA... I know of only one OFFOA arrangement that excludes nearly all "service" fees. No, these are not the "Postage and Handling" charges of the distant past (Google Investor Bulletin: Broker's Miscellaneous Fees): The SEC explains that these fees "help to reimburse the broker for expenses incurred in performing the transaction or a service for you." It says nothing of P & H, and your "broker" probably gets absolutely none of it. Shouldn't the flat fee or commission cover "expenses incurred to perform transactions and/or services"? Are "Service Fees" necessary because the

institutions don't know how to calculate management fees or commission charges accurately? Service fees vary from "as little as" $3.95 per trade to as much as $7.50... dependent, it seems, upon the size of the institution. All brokers (yes, discounters too) charge service fees and it is difficult to find evidence that they are, in any sense, "pass-through's" from custodians. They are charged whether or not you opt for "on-line" confirmations, quarterly reports, class action notifications, etc. If you get three paper confirmations stuffed into one envelope... how many fees should you pay? The only good news about them is that they are variable expenses, dependent upon account activity. I have been unable to find any information about the specific additional transactions or services we are paying for. There are roughly 6 million trades per day on the New York Stock Exchange. At an average $5 per trade, that's three billion more pennies a day, every trading day, variable expense or not, taken from your pocket and/or retirement account... with the absolute approval of Uncle Robin Hood, and his band of merry regulators. There are additional service fees that can be traced to actual client initiated expenditures, the $2.95 monthly charge for extra statement copies comes to mind, check fees, wire transfer charges, direct payment fees, etc. If the statement fee applies to you, why not just let your accountant/trustee/spouse access your information themselves on line, for free. Questions: Are all of these fees assessed as ruthlessly on transactions within Mutual Funds, ETFs, and other Wall Street products? How about when firms trade within their own accounts? NOTE: I purposely didn't include NASDAQ in the analysis... my calculator doesn't have enough zeros. The final two articles will deal with commissions, on-line trading within full service firms, institutional kidnapping of 401k accounts, and the impact of ten years of artificially low interest rates.

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BY MATTHEW D.EDWARD

Rising Dragon Hidden Dangers

A

Investing in Vietnam holds enormous potential, but can trap the unwary

forest of cranes rises skyward. The sight of the unfinished towers and neighborhoods – immediately seen by drivers emerging from the Thủ Thiêm Tunnel connecting the rest of Ho Chi Minh City to now-bustling District 2 – delivers a clear message. Despite the 2010 downturn here, Vietnam is growing again, and growing fast. “I think there’s still a good ten years of steady growth, simply because the base was so small to begin with,” said Matthew Lourey, founder and managing partner of Domicile Corporate Services, which helps companies

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enter Vietnam. With less than half of nearby Thailand’s per capita GDP (about $2,100 versus $5,800, according to 2015 World Bank figures), Vietnam only recently began moving toward “a needsand wants-based society,” Lourey said. Exports, real estate, insurance and consumption all are growth sectors, said several market watchers interviewed by The Suit Magazine. Those same people also cautioned that Vietnam, in many ways, remains a highrisk investment. Investing in this complex market takes

careful planning. The next big thing? Vietnam often draws comparisons to China circa 2000. Fast growth, low labor costs and rapid development all characterized the middle kingdom 15 years ago, until everything slowed down. But many experts dispute the inevitability of the country repeating China’s mistakes. “Vietnam, I’d like to think, can learn quicker than China, and evolve,” said Eddie Thai, venture partner with 500 Startups, a leading global venture capital seed fund and startup


accelerator. Thai recently spoke at a December forum titled “Is Vietnam the next big thing?” The answer? It depends. Vietnam relaxed limits on foreign ownership in recent years, but local idiosyncrasies often confuse foreign investors. “For example, an LLC in Vietnam lacks shares, and accounting procedures differ from the developed world,” Lourey said. Government bureaucracy, while moving in the right direction, still a “one step forward, two steps back” mentality, often with an inexplicable “no” given in answer to foreign business proposals. “Those are becoming rare, however,” Lourey noted. Locals have recently become quite pessimistic about the economy. Foreign experts, meanwhile, describe a brighter, wealthier future. Domiciles’ Lourey said that both are right. That’s because Vietnam’s growth potential remains locked in foreign-dominated sectors like exports, creating two perceptions of economic performance. “The local view tends to see Vietnam in a vacuum as well,” said Sven Roering, managing partner of Tenzing Pacific Investment Management, a financial services provider in southeast Asia. “The mid-2000s saw annual GDP growth above 8 percent until a downturn in 2010 pummeled the economy. Post-rebound expectations of returning to unsustainable growth fuel frustration,” Roering said. “If I’m Vietnamese and I know that in the mid-2000s we had a major expansion, and then a downturn and now we’re at 6 percent, I’ll be disappointed,” he explained. “It’s still a fantastic growth story.” Frontier market “Investing in Vietnam’s two stock exchanges – Ho Chi Minh City and Hanoi, the capital – requires active management,” Roering emphasized. And investors need to know they’re buying more than just stock. “The biggest issue when you invest in any emerging market, especially Vietnam, is that you’re investing in the market and the currency,” he said, adding that the U.S. dollar’s post-election surge prompted Tenzing Pacific

to divest from the Market Vectors Vietnam ETF as the Vietnamese dong plummeted [as of this writing, $1 equaled 22,727 VND]. “That’s the big issue foreigners need to take heed of, you are buying a currency as well as a stock.” The Vietnam dong is pegged to the dollar, meaning the currency gradually depreciates, averaging about 2 percent annually. Entering the Vietnamese securities market currently means going through an ETF like Vectors, which declined significantly last year, down 26.8 percent from 2014-2016. Vectors has been criticized in the past for exposing investors to Vietnam’s largest, and most inefficient state enterprises. Other ETFs, such as the DeutschBank Extractors ETF, have fared somewhat better, but investing there requires double currency conversion for U.S. investors, creating extra complexity. “Unfortunately, the ETF universe here remains small,” Roering noted. “It’s very hard to get access to these markets directly,” he said. “You could invest directly in these markets through a Vietnamese broker, but that’s a huge leap of faith.” Trading directly in Vietnam requires a locally denominated account. The market here, for foreigners, also trades on a T+2 model, meaning trades go through two days after they are made. That’s one reason why Tenzing keeps its Vietnam-related trading in New York, where trades are immediate, and in dollars. Roering pointed out that the liquidity in Vietnam’s market make it a “stock-picker’s dream.” The opacity of information – the market is rife with insider trading and speculation – also allows people to come in and beat forecasts. And major brokerages have set up reliable research operations in-country, Roering noted, adding that analysts often see through the exaggerated information common to Vietnam’s market. Real property, real problems Booming development in recently gentrified District 2 – home to affluent expats and Vietnamese elites – is just one sign of progress. Other areas, such as District 7, another expat haven, has seen prodigious growth over the past decade. Meanwhile, real estate speculators are snapping up tracts of land on the city outskirts near Long Thanh, where a new international airport is planned. Woodland Realty sales manager Long Phi said that an unfinished metro system (slated to open in 2020) and infrastructure projects also are driving up property prices along the city’s eastern edge.

Beyond Ho Chi Minh City – still “Saigon” to the locals, who never accepted the hub’s post-war name – the country has seen industrial expansion in suburban towns and non-stop real estate development in coastal communities such as Danang, the country’s third-largest city, and Nha Trang, a centrally located beach town. Hanoi’s market, meanwhile, was described as more complicated; the city also is less central to the economy than Ho Chi Minh City, Vietnam’s commercial hub. Long Phi remains positive about the property market, despite 130,000 new Ho Chi Minh City apartment units reaching completion over the next four years. “Prices might dip temporarily,” he said, “but those apartments still won’t meet demand.” Real estate ownership pitfalls abound for foreigners. While Vietnam began allowing anyone with a valid visa to buy property in 2015, foreigners often fail to understand Vietnam’s definition of ownership. Vietnam is still a communist state, meaning that technically property cannot be owned. Buyers instead receive what amounts to a 50-year lease on the property, with the option to extend. The property can be sold during that time. This kind of information asymmetry puts buyers at a disadvantage in Vietnam. “Most of the real estate information comes from developers and agents themselves … so I believe that you can find quite a lot of information bias,” Roering said, adding that Vietnam’s demographics and rising incomes are positive signs for the real estate market, but that housing over-supply will be a serious problem. “Still, the profit potential can be high,” Long Phi said. Owners can expect a 5 percent-of-value annual average return on rental properties, and “condotels” – a developer-managed but owner-rented serviced apartment – can return 50 percent over the first five years, although the returns drop significantly afterwards. Walk, don’t run Vietnam’s tremendous growth potential can benefit foreign investors greatly, but navigating the country’s bureaucracy and culture can be difficult. Domiciles’ Lourey said that local expertise is essential to success in the country. Still, the growing southeast Asian nation of 90 million has much to recommend it. “It’s still growing more than most places,” Lourey said. “Vietnam is one of the few hubs in the world that is really exciting.”

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CNBC MAKING IT

THE REAL DEAL BY JUDE SCINTA

TILMAN FERTITTA: BILLION DOLLAR BUYER p.26

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ilman Fertitta, CEO of Fertitta Entertainment, Inc. and Jim Ackerman, executive vice president of CNBC’s evening line-up, had been talking for some time about creating a concept for a business show starring Fertitta that would fit the cable news network’s alternative primetime format which includes such shows as “The Profit,” “Jay Leno’s Garage,” and “American Greed.” Fertitta, who describes himself as “a serious Wall Street guy” also wanted the show to fit his approach to business. After all, he has serious Street cred as the sole owner of Fertitta Entertainment, Inc., which owns and operates Golden Nugget Casinos and Landry’s Inc. with over 50 restaurant brands including McCormick & Schmick’s, Bubba Gump Shrimp Co., and Morton’s The Steakhouse. With revenues of over $3.4 billion, Fertitta is viewed as an international dining, hospitality, entertainment and gaming industry expert and ranks as the world’s richest restaurateur. Offering customers the best-of-thebest at his venues is just one way Fertitta stays on top, but it comes at a hefty price. A peek at some of his annual expenses shows that he spends $11 million on vodka, $7 million on t-shirts, and $1 million each on bedding and soap. The idea arose to create a reality show where businesses could vie to make a deal with Fertitta and place their products within his empire. In collaboration with Endemol Shine, a production company behind such shows as NBC’s “The Biggest Loser” and FOX’s MasterChef franchise, CNBC and Fertitta developed the “Billion Dollar Buyer” which debuted last March. With season two currently airing, a more confident and rhythmic stride is apparent as the show come has come into its own and has developed a loyal audience. In each episode, Fertitta meets owners from two different small businesses who are hoping to receive a purchase order from him. “If I think they can deliver, I’ll place an order that can change their lives forever,” Fertitta is heard saying as the voiceover during the show’s opening credits. As the show unfolds, he questions the owners and tests their products, but he doesn't let first impressions get in the way of his final decision to make a deal or not. Often, he makes

Tilman Fertitta is the sole owner, chairman and CEO of Fertitta Entertainment, Inc., which owns both the restaurant giant Landry’s, Inc. and the Golden Nugget Casinos and is recognized today as a world leader in the dining, hospitality, entertainment and gaming industries. The Company today has revenues over $3.4 billion and assets of more than $3.5 billion. Landry’s operates more than 500 properties in 34 states and owns a number of international locations. It is also one of the country’s largest employers, with more than 60,000 employees. Landry’s owns and operates more than 50 different restaurant brands, including McCormick & Schmick’s, Chart House, Landry’s Seafood, Rainforest Cafe, Saltgrass Steak House, Bubba Gump Shrimp Company, Claim Jumper, Mitchells Fish Market and many more award-winning concepts. Landry’s Signature Group of restaurants includes some of the world’s premier fine dining concepts, like Mastro’s Steakhouse and Ocean Club, Morton’s The Steakhouse, The Oceanaire, Vic & Anthony’s, Brenner’s Steakhouse, Grotto, La Griglia and Willie G’s just to name a few. What is further unique about Landry’s is that it operates all of its locations and doesn’t license or franchise any of its domestic units.

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up his mind at the final meeting that takes place in his boardroom. “It's real, when you see me make a deal in the boardroom. That product, if it can be, is in the restaurants, hotels, or the casinos the next day. Our deals are real deals.” Some of those real deals are doing quite well. From season one, Liber & Company offering cocktail syrups, and hot sauces by Bravado Spice Company are a big hit within Fertitta Entertainment venues. Season two is off and running with high performing deals from swimwear creator Nicolita, Rossmore jewelry, and cosmetics from KISMET. Fertitta wants viewers to learn marketing, operations, and financial aspects of running a business from the show. Each episode includes supporting charts and illustrations that he summarizes to help make it a more complete learning experience. “It’s a great feeling, it’s part of giving back,” he said. “We decided we were going to make it more of a mentoring show this season where we’re teaching people more, instead of just getting up p.28

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in their butt. I think it’s coming across that way and people like it. I have entrepreneurs walking up to me everywhere telling me that that they love watching the show because of what they learn.” Asked about his outlook on the upcoming Trump administration, Fertitta is quick to shut down the rhetoric surrounding political correctness, or moreover, the lack of it by shown by President-elect Donald Trump. He chooses to view the issue strictly from a business question: is America going to be better off? “Let's just talk about it from having a business guy in the White House, nothing else. Let's get rid of all the other noise. There's nothing like having a business person, we look at things differently. We know how to deal, and we know how to make a deal,” he said. Fertitta has met President Obama and describes him as a “nice gentleman,” but as someone who only had experience in legislation when he was elected, not decision making. “That's why governors make better presidents. They’ve been a chief executive and

the buck stops with them,” he said. “Everything that is good for everybody is if you have good American capitalism. Take all the other noise away from Trump. What's best for what's going in the pockets of Americans is having a president who knows how to make a deal and understands American capitalism.” So to help entrepreneurs make it in our capitalist society, Fertitta offers this advice: “Most people in small business fail, not because they don't have a good product or a good location, it is because they don't know where they are financially. Everybody underestimates the numbers from every aspect; from the budget to build something, to the amount of working capital they need, to understanding their financials and knowing if they're making money or not in the first sixty to ninety days. So, the one thing you better do if you're an operator and you have a good product, is get a partner that knows numbers. Somebody on your team better know numbers.”


by matthew d. edward

THE

SHAMANof WALL STREET – Redefining the Investment Experience

Many people live as though they are asleep, drifting through life unaware of their purpose, their reason for being and thus missing their true impact to society and to those around them. Daily activities and obligations are done as if on autopilot and they spend all day in an office with their thoughts constantly leaving the present moment. Being present is to be mindful of one’s actions and impact and if we’re not present to realize our true potential then we are selling ourselves short and not truly sharing our gifts. “Stop and look at what you are thinking,” said Lawrence Ford, AIF, known as the “Shaman of Wall Street.” “Our minds are obsessively thinking about the past or the future – so we are literally not here,” he explained.

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F

ord, the founder, CEO and Whole AdvisorTM of Conscious Capital Wealth Management, awakens clients to the power of money and how to use money to make the world a better place. To Ford, money is just a tool. It helps people achieve “true wealth.” He added that, beyond meeting basic needs, money is “useless.” “Money is there to power our dreams and passions; to fuel us, but not rule us,” he said. Conscious Capital works with clients to build more than just money, it is about understanding and developing dreams, wellness and a person’s whole life. The firm is revolutionizing the industry with their whole approach to investing, which focuses not only on building wealth, but also supporting all aspects of a person’s life and wellbeing. “Our philosophy is based on “Souls First,” states Larry, we work with clients through our Live WholeTM process to better understand how they align their doing with their being and their being with their purpose.” Ford noted that the Glastonbury, Connecticut based firm is poised to grow across the country and, uses a “Connect - Dream - Empower” model to help determine what clients truly want and they train their advisors through the same process thus insuring the culture is strong and relational to those they service. Ford's unique proprietary methodology represents a bridge between the intellectual, emotional, relational and spiritual worlds. It’s a coming together of “Wall Street” and an individual’s awakening and renewal into their purpose and direction. Ford has stood with a foot in both worlds for some time, having spent a career in financial advising before discovering within himself a gift for healing. He studied shamanism in Nepal, only to return later to the world of finance. He explained on NPR in 2008 that there’s no contradiction in this. Quoting Lao-Tzu, he said, “Before enlightenment, chop wood, carry water. After enlightenment, chop wood, carry water.” This concept may be best explained through a story of an old monk who was sweeping a floor in the hot sun and a student saw the master and asked “why after 87 years and all that you have mastered are you still sweeping a floor in the hot sun?” The monk smiled and responded, “because the floor is dirty and the sun is here.” “Many of us get caught up in the end results of what we're working toward or the way things will be when we finally achieve something. But the truth is it’s the journey, not the destination that brings happiness,” says Ford. And remaining true to your soul’s longings along the way, is the way.” There's a Zen philosophy that says the way a person does one thing is the way they do everything. As the 2008 financial meltdown tore through the financial markets, investment portfolios and lives, Ford lent his shamanistic power for healing to Wall Street. Pictured in the Washington Post blowing a conch shell to help awaken

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the New York Stock Exchange of its addiction to “fear and greed,” Ford attracted numerous media mentions and some derision from former industry colleagues. Ford gave his detractors little credence, however. “What is cuckoo, you tell me … Helping people as a shaman?” Ford told The Post. “Or creating intricate financial vehicles to perpetuate greed and corruption … They’re caught up in their own paradigm.” From between these two worlds, Ford insists that he can help guide clients to both live in the present, and build their future, while they live in the now. Conscious Capital maintains no firm minimum to invest, since Ford believes the “high-touch, high-tech” firm has a p.32

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model scalable enough to accommodate a wide variety of clients and that is not in his nature to turn away people in need. Typical clients include those in transition like - empty nesters, recently divorced, aging couples, widows, newly found money due to a death, personal injury settlement or lottery winnings. In addition people come who are tired of lacking a “full life” and those wanting to align investments with their own values. “Being naturally different has attracted attention as Conscious Capital has clients nationwide,” Ford said. In addition to his shamanic training, Ford holds numerous licenses and registrations including FINRA Series 63, 66, 7 and 24, Variable Annuity, Life and Health,

Investment Advisor Representative and Accredited Investment Fiduciary (AIF). After graduating college, Ford took the unusual step of striking out on his own instead of signing on with a major Wall Street firm. “I decided when I got out of college that money controlled people and it should be the other way around,” Ford said. Mr. Ford has had a long estimable career as an entrepreneur, financial advisor, and consultant, helping both large organizations and individuals through transition and crisis. In 1998, Ford was named one of six people to form the Citigroup Advisors Committee, which was tasked with overseeing the marketing and cross-selling challenges result-


ing from the $70 billion merger of Travelers and Citibank. He also served as an executive of Direct Advice, one of the nations first “robo-advising” models created in the early 2000s. At the same time, he built his advisory practice to nearly five thousand clients, he enjoyed working with the esteemed Dr. Harry Markowitz, the Noble Prize winning Laureate for Modern Portfolio Theory, and served as the Co-Chair Membership Committee and consultant to the Governance Board for the Retirement Income Industry Association. “All at the same time as I was flying in to do this kind of work, I was doing an exploration of my own longings and what I wanted in life,” Ford said. With that, he “surrendered” and moved with his family to St. John, in the U.S. Virgin Islands. The move was one of the most “difficult and exhilarating” decisions he ever made, Ford recalled. In St. John he began to embrace his calling as a shaman, serving clients at the Rockefeller Resort. Later, he traveled to Nepal. But after finding enlightenment, it was back to chopping wood. “It was the last thing I ever thought I’d do,” Ford said. Over the past four years, Ford

has managed Conscious Capital, an RIA that is redefining the investment experience, in fact the life experience. The firm’s philosophy of live a life of passion and purpose and that each of us are ‘Here for a Reason’ stands at the core of their service model. Through the Live Whole process individuals understand how to connect to their true self and find they can talk about money, meet with wellness coaches, therapists and receive massages all provided at each center as well as virtually when possible. “One cannot have true wealth without overall health,” stresses Ford. “Clients often feel deeply moved and thrilled by Conscious Capital’s approach,” Ford said, “people often say that they had no idea that someone like Conscious Capital even existed.” This new paradigm earned Ford the 2016 Business Person of the Year award from The Peace Island Institute. He also received a commendation from Connecticut Senator Christopher Murphy for his work at Conscious Capital. Murphy called Ford’s work, "Remarkable, both for the financial prosperity it has helped so many peo-

ple achieve and for the unique spiritual vision that he has brought into this field.” But it’s not about accolades for Ford, who believes this mission is much bigger than him and that his firm’s biggest success is yet to come. “We are a movement, not just a business, we exist to help make the world a better place by using the power of money, explains Ford. It’s about awakening people to the reality around them and moving them into their own power. It’s about pursuing life’s works and realizing the totality of who we are.” Transitions, “wake ups”, or “initiations”, stir us from our slumber and give us a gentle tap, or not so gentle slap, to remind us that there is more to life than the mindless march from work to home. “When we are gifted with a life event that wakes us up, we often see ourselves in the world for the first time and it can be a shock; hence, our reason for creating a model to support individuals through this journey,” states Ford. For more information about Conscious Capital see: www.consciouscapitalwm.com

Advisory Services offered through Conscious Capital Wealth Management, LLC (CCWM). Securities offered through J.W. Cole Financial, Inc. (JWC) Member FINRA/SIPC. JWC/JWCA and CCWM are unaffiliated.

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by matthew d. edward

TAKING MONEY OFF “THE STREET”

wisconsin wealth managers build true relationships with clients Middle America’s unease with Wall Street fat cats and seemingly unpunishable big banks leaves many asking the question – whom can I trust to invest and protect my money?

T

he answer, for many, is Heck Capital Advisors, a suburban Wisconsin firm that holds “small-town values” near and dear. “The biggest key is that we’re not affiliated with any bank or brokerage firm or custodian or mutual fund,” said Kenneth Heck, CFO and senior director of portfolio management for Heck Capital Advisors. “The investment we select for clients is what we believe is the best for them. It’s not because we’re getting a kick-back from the firm.” The firm – a Registered Investment Advisor (RIA) descended from the firm founded by Kenneth’s father, Robert Heck – provides portfolio management services and financial guidance tailored to investors’ goals. The firm provides three types of portfolio management: asset allocation, equity and fixed income securities, and indexing. The firm works with each client to match their goals and needs to an appropriate strategy. Robert Heck began his financial career on Wall Street in 1958, starting as an analyst and eventually building up a client base across 30 states. In 1990, Robert Heck was joined by his son Kenneth and David in 1992 and they formed the Heck Group in 1993. At that time, the Heck Group was tied to a Wall Street company. The Hecks, however, developed a distaste for how Wall Street conducted itself and

decided in 2007 to found Heck Capital Advisors as an independent firm. Heck Capital Advisors serves clients across the country, but that service remains influenced by the small-community Wisconsin values the Hecks grew up with. The firm’s employees dedicate considerable time to community involvement projects such as serving on the board of a local hospital, the school committee and the municipal airport. The market moves at such a fast pace now that investors often want both up-tothe-minute information at the same time as simplification. “They want somebody to put it all together, and that’s what we’re trying to do for them,” Heck said in a recent interview with The Suit Magazine. “We’re looking for clients who really want that long-term guidance,” he added. “Trust and communication is one of the cornerstones of our firm and of our success.” Heck Capital Advisors recently launched a service called CapitalCENTRAL®24/7 that allows clients on-demand access to their financial information. “But that doesn’t mean the human advisor is out of the picture,” Heck said, adding that a client-advisor relationship is more essential now than ever as information overload presents the need for hands-on advising. “I don’t think you’ll ever get away from a true advisor. You can place things online as much as you want, but unless people understand it … you won’t be able to make

Integrated Financial Guidance and Investment Solutions delivered with the special care, attention and high tech resources needed to protect and grow your wealth. p.34

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the right decision at the right time,” Heck added. Heck Capital Advisors prides itself on giving clients that personal touch; it’s something they’ve done from the beginning. The industry, however, has only recently moved away from the old-school “alpha approach” to investing. The financial industry is in the midst of a paradigm shift, Heck noted, on a par with the previous sea change from commission- to fee-based payment structures. “Now you’re seeing the shift from true investment to true relationship,” Heck said. Their “true relationship” approach quickly collected accolades from financial publications. Heck Capital Advisors was rated in the top 100 U.S. independent advisory firms by Financial Advisors Magazine from 2009-2013, and was rated by Financial Planning Magazine from 2014-2016 as a top 100 RIA firm and among the top 50 Fastest Growing Firms in its class in 2015. Forbes also listed the firm among its top 50 wealth managers for April, 2013. Advisor One included Heck Capital Advisors on its 2012 list of the top 100 U.S. independent advisory wealth management firms and WealthManagement.com recognized Heck Capital Advisors as a Top 100 Retail RIA from 2014-2016. Additionally, in 2012, Robert Heck was also lauded by Conquest Press as one of America’s top advisors. Breaking away from Wall Street in 2007 proved prescient. As the financial collapse shook world markets, Heck Capital Advisors’ clients proved well-positioned to weather the effects. The firm acted defensively to stave off the worst of the crisis as well. Heck told Financial Advisor Magazine in 2009 that the firm’s strong bond portfolio helped it survive, and even thrive, during the crisis. “The key is don’t panic – remember what the money is there for,” Heck said at the time. Strong relationships with clients also paid off during the financial crisis of 2008 as the firm made adjustments while put-

ting investors’ needs front and center. Heck Capital Advisors eschews cookie-cutter approaches, and instead seeks a deep understanding of each client’s needs. Heck said the firm also acts as a fiduciary for clients. “You can have two clients who look very similar, but their needs and wants are different. What is the best strategy for them?” Heck asked. That is why they prefer to start with a financial plan.

That high-touch personal care might be a different paradigm than what investors find on Wall Street, but in suburbia, it’s just called “normal.” “Years ago it was alpha, it was investment, it was strictly based on those types of things – it’s not anymore,” Heck emphasized. “Now the relationship, guidance and simplification is key: What does that client truly need? What is that client truly investing for?” 833 E. Michigan Street Suite 1460 Milwaukee, WI 53202 414.509.6630 15 E. Anderson Street PO Box 738 Rhinelander, WI 54501 715.361.1500 www.heckcapital.com THE SUIT MAGAZINE JAN p.35


Amanda Brinkman

Chief Brand and Communications Officer, Deluxe Corporation

Amanda Brinkman

Chief Brand and Communications Officer, Deluxe Corporation

Robert Herjavec

Business Entrepreneur, The Herjavec Group

Robert Herjavec

Business Entrepreneur, The Herjavec Group


by amy armstrong

Ramen and Peanut Butter Dreams: Helping His Clients Live Their Dream

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onsuming buckets of ramen noodles and countless peanut butter-and-jelly sandwiches when he first launched his wealth management business, Michael C. Dickerson, CFP®, the CEO of Dickerson Wealth Advisers knows first-hand about economic hardship. At the time, he lived almost solely on ramen and peanut butter-and-jelly dreams, because that’s all he could afford. That is why Dickerson truly understands the struggles clients face as they negotiate the world of keeping today’s needs met while at the same time creating savings for the future. He also knows the value a dedicated Financial Adviser can bring to a client who is truly working toward his or her financial goals. “I want to work with people who are truly serious about working toward their goals – and not folks who just want to see what the market can do for them,” Dickerson emphasized. Financial planning has characterized his entire career. At age 39, Dickerson sits in the unusual position of having more than 16 years of experience along with the credentials as a

Certified Financial Planner to back up the advice he gives to clients. Operating his business in a fiduciary manner is a paramount principal for Dickerson. He isn’t bothered by new fiduciary definitions and regulations the Federal Dept. of Labor plans to introduce in April 2017. “It combines the Golden Rule with legal enforcement,” he said. “Hopefully, it will get rid of the bad apples out there.” He sees some improvement in the way clients are informed regarding the costs associated with their financial transactions. But he still does not believe the current 401k fee disclosures are enough to fully inform clients of the expenses associated with their accounts. Dickerson said, “The companies have found ways to build the fee into the account in other ways, and have

figured out ways to hide the fees. Even when the fees are disclosed, the clients do not realize what these fees actually mean anyway.” But he isn’t bothered so much by all of that, especially since he thinks the fees are fairly low for what the client is receiving in most cases. The only exception may be in the case of smaller plans where costs are spread across fewer participants. Dickerson’s main concern is with building authentic and strong client relationships that will weather market events such as the 2008 to March 2009 Great Recession, and personal events such as the death of a spouse, which can send a client’s family into a tailspin. “Your job as a financial advisor is to tell them how it is going to affect them, what the alternatives are, and to give them advice and listen to their needs during these difficult times,” Dickerson

said. “These types of events are going to happen – things from a spouse passing away to an adult kid needing money, which is a big problem nowadays. As their advisor, you just have to listen to what they are going through and talk them through it, knowing that you have their best interest in mind.” Learn more about Michael C. Dickerson and his firm, Dickerson Wealth Advisers, online at www.dickersonwealthadvisers.com

CEO Michael C. Dickerson Dickerson Wealth Advisers

www.dickersonwealthadvisers.com

THE SUIT MAGAZINE JAN p.37


by matthew d. edward

CONSCIENCE - BASED INVESTING investing in sustainable, ethical business doesn’t kill returns

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. Benjamin Bingham lets one thing guide the investments he recommends to clients — his conscience. “The standard we set for ourselves is to achieve market-rate returns … while having as much of a positive impact on society and our environment as we can,” Bingham recently told The Suit Magazine. Bingham’s firm, 3Sisters Sustainable Management, LLC, practices socially responsible investing that prioritizes aligning clients’ values to assets. Socially responsible investing considers the impact of an investment on the environment or society — for example, big oil companies are typically “out” along with defense contractors. Often called “ESG” for environmental, social, and corporate governance investing, this brand of asset allocation is becoming more common among large financial firms and a cottage industry of consultants have sprung up to advise on which investments make the cut. Socially responsible investors usually pursue one of two options. They either invest in socially responsible companies or products, or they put their money into companies that create a negative social or environmental impact, and then work to change them from within. Activist investors pursue the latter option. Bingham, who’s written a book on the subject entitled Making Money Matter: Impact Investing to Change the World, pointed out that socially responsible does not mean a lower return. A metaanalysis of 100 studies on

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the effect of ESG by Deutsche Bank found that just 2 percent of the reports concluded socially responsible investing hurts returns. In contrast, more than 50 percent of the studies Deutsche Bank considered showed ESG investing may boost returns (the remainder showed no difference). 3Sisters helps clients invest sustainably through its Scarab Funds, which offer short duration microfinance, high yield private debt, a diversified real asset fund, public impact stocks and a developing series of private equity strategies. These diversified funds serve philanthropic and traditional advisors whose clients who want to see strong returns, and high social impact, within their risk profiles, Bingham said. Bingham’s reliance on conscience made traditional finance work difficult, he said. At Citigroup in 2006, he “couldn’t believe” the firm’s attitude toward mortgages, and saw hard times ahead. He left the firm for an RIA where he could match client values to investments — and his portfolios only lost 5 percent, on average, during the 2008 crisis. Investing off “the street” also complicated protecting clients, he said. Bingham described Hansen’s Natural Soda as one of his best investments in the early 2000s; the company wasn’t tracked by analysts, but grew 2000 percent in two years. It took considerable convincing to get Legg Mason to approve putting Hansen’s in clients’ portfolios, Bingham said, adding that it’s an example of how powerful analysts and the “Wall Street Universe” are. The prevalence of ESG investing will only grow as a new generation of investors consider their conscience before sinking money into an asset, Bingham said. “I would say the whole market is thinking about this right now. It’s a multi-trillion dollar market and there’s multiple opportunities for innovation,” he said.


INTRODUCTION TO

MAKING MONEY MATTER BY G. BENJAMIN BINGHAM

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ay 2014 marked the end of the world as I knew it. Along with a number of economists and thought leaders, I traveled to St. Augustine, Florida, for a gathering called Finding Ethical Alpha. Hazel Henderson, the grande dame of new economic thinking, had brought us there. After predicting much of what has unfolded since the 1970s, now Hazel beams out rays of hopeful data from her website (www. ethicalmarkets.com ), where she tracks the new Green Economy— global spending is already in the trillions and accelerating.

www.makingmoneymatter.cash

But the news in the room that day was not all warm and fuzzy. We realized that we are witnessing a time of global change that could prematurely end what Hazel calls the Age of the Anthropocene. Humankind may become as extinct as the dinosaurs. It seems there are two ways out of this dilemma: one following the simple wisdom of nature and Hazel’s “exponential growth in consciousness,” and the other employing a plethora of technological solutions. This is a time of global reckoning. The future is not known, but is more than ever in our own hands. The question is whether we will support the proliferation of ready solutions or continue to invest in the problems like “prudent lemmings” heading for a cliff. If we embrace the energy of the sun, the

wind, and the rising tides (together able to provide twenty-four times the energy we currently consume), will we do it in a way that remembers the soul? Will the future of humanity be wedded with the living and dying rhythms of nature? Or will we be mechanized and digitized to the point that human error becomes redundant—and cyber- biotic beings replace our gentle genus? Katherine Collins, the former head of research at Fidelity and author of The Nature of Investing, elegantly demonstrated that there is too much uncertainty about the future to depend on data from the past. We had better order our investments with policies, procedures, and processes that are in harmony with Nature—in the “how” and the “why” of our investing. It is abundantly clear that our relationships define the quality of our life, especially our relationship with nature and “spirit,” however we choose to define it. Because we have lost touch with nature, we find ourselves in the current predicament: destroying our own home planet. Dennis Bushnell, Chief Scientist at NASA Langley Research Center, brought our attention to the chilling fact that natural disasters are likely to wipe us out unless we act now. In fact it may already be too late. In the 1980s, he predicted that, given the rate of global warming, all Arctic ice would melt by 2100. So far, his theories have been proven correct. Moreover, the global buildup of methane is increasing the likelihood that tsunamis will form. But Bushnell claims we already have the means to solve most of our prob-

lems. For example: 1. Halophytes, plants that are prolific when irrigated with seawater, could green the Sahara and provide sufficient biomass to replace all fossil fuels, feed the hungry, and provide fresh water for human use. 2. Hydrogen power is ready to go, with the first large-scale utility already built in South Korea. 3. Joule Unlimited has created a synthetic gasoline alternative, produced cheaply by exposing CO2 in brackish water to sunlight. (Audi is a partner.) 4. LENR (Low Energy Nuclear Reaction) holds extraordinary promise, but is still risky and controversial at the moment. (Recently an explosion in the NASA lab melted the glass in the windows.) We have the means to power the world harmlessly, yet 85 percent of our current energy use is needlessly harmful to the planet, which speeds up the rate of global “weirding.” Will we wake up in time? Will we invest to survive, or better, for future generations to thrive? You will decide with your money! How it is spent, loaned, borrowed, gifted, or invested will determine the planet’s future. Welcome to the new economics: prosperity will only be realized if we take care of ourselves and the planet. www.3sistersinvest.com

THE SUIT MAGAZINE JAN p.39


by amy armstrong

transitioning within retirement

It’s not just about a comfortable beach chair, it's about supporting change

Gary P. Gardner President Life&Wealth Advisors

Life&Wealth Advisors® prides itself in helping our clients create lives full of possibilities. Through our processes we stretch your imagination to discover and create both opportunities and solutions. We help you overcome feelings of unease, confusion, or constriction that you might be experiencing on your journey.

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ife is full of transitions. Most of these transitions require us to figure out how finances will support that change while our emotional needs are met. Based on years of research and work a newly-introduced certification within the financial services industry – the Certified Financial Transitionist® (CeFT)™ – is all about training financial planners on how to guide clients through the various adjustments that life brings. This is a new concept. The idea is that transition – oftentimes with retirement being the most challenging one – should be included in the technical analysis and numbers crunching. But why not?

www.lwadvice.com

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Call it the financial industry’s reversal of the old adage that old dogs cannot learn new tricks. Who says that experienced financial planners cannot learn to use new tools to better assist their clients? Certainly not Gary P. Gardner, president of Life&Wealth Advisors based in Walnut Creek, Calif. After 40 years of working as a financial planner, Gardner earned yet another new certification in April 2016– the Certified Financial Transitionist® (CeFT)™ granted by the Sudden Money Institute based in Palm Beach Gardens, Fla. Earning the certification is in keeping with Gardner’s goal of staying on the cutting edge of what is available to the financial planning community. “There are two sides of financial planning – the personal side and the technical side. I am good at both, but I have a bias toward working with people, trying to understand what it is they really

want out of life and how to help them get there,” he said. “Now that I have the transition tools that come along with a CeFT™, I want to incorporate those into my practice more and more.” Life transitions, such as the death of a spouse, divorce, a change in employment or even the blessing of an unexpected windfall, can each bring stresses to a person’s life for which he or she is most likely unprepared. “Most men and women are not really ready to make significant life decisions when these types of events occur,” Gardner said. “And in every case, each person is going to react differently.” Getting a perspective on the range of reactions to change is a big part of what he values from the CeFT™ training. As the financial planner who pays attention to the larger picture of how life’s transitions impact a client’s finances, he serves his clients as the cool head and rudder in the storm. His training as a CeFT™ gives him insight into aspects of spousal death, for instance, that aren’t necessarily financial. He tells the story of a widowed client. She was a tremendous partner in her spouses life during their 55-year marriage, but she didn’t handle the finances at all. Now that she has to make those vital decisions, Gardner isn’t simply advising her – he is teaching her. “We are working on things that are


important to her as well, from an emotional standpoint,” he said. Some of those issues are issues not usually handled by a financial planner. “For instance, her husband was a do-it-yourselfer with five sets of treasured work boots in the garage. Their symbolic value made it difficult for the widow just to give them to Goodwill. I was able to help her work through the issues surrounding disposing of his boots and other items containing precious memories.” This concept of smoothing the path through transition applies to other life events as well. Market downturns, such as the one experienced in the Great Recession of 2008 to March 2009, are another example in which taking a long-term, calm viewpoint is the best strategy. During the period, Gardner had not yet become a CeFT™, but his approach to navigating that storm could be characterized as preparation for the coursework he would later complete. He didn’t lose any clients during that volatile time frame, because the strong relationship he built with each client was established long before the downturn occurred.

Gardner likes to work with clients for whom he can make the most difference. It is his approach to being a fiduciary – a guiding principle to which he has adhered throughout his career. This is why the pending changes scheduled to be implemented in April 2017 by the federal Department of Labor regarding the definition and responsibilities of being a fiduciary don’t threaten his work ethic. When asked what he thinks the financial services industry would best change about its current operations, he immediately indicated that the fiduciary model should be implemented across the board to all individuals and institutions providing financial services to the public. He values increasing his client’s financial literacy – including teaching them what a fiduciary actually does and what nonconflicted value that brings to the client. He sees the myriad of online platforms waving the banner of financial education, but isn’t sure just how effective interacting only with a computer could be in terms of upgrading a client’s financial IQ. “I am not clear on how you can transmit wisdom via computer code,” Gardner said. “How

are you going to get people to connect to 40 years of experience and how does a computer work through the situations that happen in life with a client? How is a computer going to be able to do that?” For now, he realizes just how much the personal goals of clients have changed. The traditional life trajectory of education, followed by work and then retirement is no longer the mainstay. Clients often have what he calls a “second adulthood,” in which they may begin work in a field completely unrelated to their first career, start a business or take a non-career job to bring in some cash. He likens it to the lyrics by Tom Petty in the song, “Last Dance with Mary Jane,” in which the crooner delivers the words, “Well, I don’t know, but I’ve been told, you never slow down, you never grow old.” Just like those lyrics, Gary Gardner keeps moving forward and learning for the benefit of his clients. His goal is to work with clients well into his 80’s. Learn more about Mr. Gardner and Life&Wealth Advisors online at www.lwadvice.com

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by matthew d. edward

RETIREMENT PLANNING? THINK TAXES

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t can be difficult to find a wealth manager who treats clients like family. At Prosperity Wealth Management, that’s not a problem. “I began my career hoping I could help my clients achieve those dreams my dad was never able to — funding their children’s college educations, achieving financial independence, and leaving a legacy someday to their loved ones,” said Lauren Gidley, president of Prosperity Wealth Management. Achieving financial independence presents a serious challenge for even the most diligent retirement saver. But the freedom to enjoy life, travel, and deal with financial complications such as long-term care throughout retirement make overcoming that challenge an essential part of investment planning. But most savers, even the careful ones, often fail to consider one serious hurdle to effective retirement planning — taxes. After all, as Benjamin Franklin once said, the only certainties in life are death and taxes. Because taxes are a certainty, investors need to

think about how to reduce them. “People are missing the bigger picture of the impact of taxes,” Gidley said. “Taxes have a far greater impact on client’s ability to achieve goals than they realize. I focus on mitigating taxes and applying those savings to helping my clients achieve and enhance financial independence.” Gidley recently shared with The Suit Magazine her views on retirement planning, the need to reduce investor’s’ tax burdens, and how financial independence is within reach. Many of Prosperity Wealth Management’s clients are doctors or business owners — two groups that chafe under heavy tax burdens. The firm does not set a hard minimum to invest, but clients’ values should align to the company’s belief in integrity, genuine caring, and loyalty. The firm’s belief in loyalty means they safeguard clients’ money, even if it means explaining difficult or unorthodox changes to a portfolio. “One aspect of loyalty is protection,” Gidley said. “Those who work with us know that twice within the past

President Lauren Gidley Prosperity Wealth Management.

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two decades we proactively recommended for our clients to step out of the stock market when risk was high, avoiding two crashes in which the stock market lost half its value.” Another aspect of loyalty is Gidley’s insistence that client money be treated as if it belongs to a family member. This is non-negotiable for Gidley, who worked her way through college after a bad investment left her father unable to fund her education. Gidley gravitated toward finance at a young age, after her mother died of cancer. Gidley’s father invested his late-wife’s life insurance to fund Gidley’s education. Unfortunately, the investment collapsed. That experience left Gidley with a desire to help others achieve their goals through wise investment choices. Gidley began her finance career in 1989 after graduating from Texas A&M University. During Gidley’s nearly 30 years in the finance industry, she saw the stock market rise and fall repeatedly. When the market was hot from 1995 until 1999, Gidley prioritized portfolio growth. She did the same during mid-2000s boom.


western new york advisor takes an unorthodox approach to help clients thrive But when the market began falling apart after each growth period, she made sure to move her clients out of stocks and into safer investments. People fail to realize how difficult recovering money lost to a stock market crash can be; consider that if the market loses 50 percent, an investor needs to make back 100 percent to break even. For older investors, that’s a tall order. “Most of these investors will not be able to postpone retirement long enough to try to recover their losses and grow their money back,” she told Forbes Magazine in 2014. Gidley founded Prosperity Wealth Management in 2004 after realizing she could better serve investors if she was free from corporate mandates. “I wanted to be able to recommend the products and services that would best help my clients achieve their financial goals,” Gidley said. “I wanted my advice to be based on the unique needs of each client rather than the directives of my employer; affiliating with an independent brokerage firm gave me the freedom to put my clients’

needs first.” Gidley is a registered representative with First Allied Securities, Inc., a Registered Broker Dealer and member of FINRA/SIPC as well as a Registered Investment Advisor Representative with First Allied Advisory Services, a Registered Investment Advisor. She is also an Accredited Investment Fiduciary. Prosperity Wealth Management’s focus on taxes allows Gidley to unlock extra funds to reinvest into clients’ financial independence. Clients often remain ignorant of this model. For example, the required disclosures surrounding 401(k) accounts are “helpful,” Gidley said, but people rarely consider what the tax burden on those savings will be. Investors often lose a third of their 401(k) to Uncle Sam, which can be a huge blow for people expecting to fund retirement, long-term care, and other late-life needs. Lowering the tax burden on any investment frees up money that’s otherwise tossed down the drain as well, she added.

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Our Mission… is to develop long lasting, meaningful personal relationships with our clients by providing dynamic and effective strategies to safeguard their portfolios, grow their investments, and secure their income to help provide lifetime financial independence and a legacy to those they love. “I have not met anyone who thought tax rates would be lower in the future,” said Gidley, who started her career nearly 30 years ago. “Yet they choose to defer tax on a smaller amount of money at a known tax rate today for a relatively minor current tax savings, only to face a major tax bill at an unknown tax rate on a considerably larger expected amount in their 401(k) account in the future.” Gidley says, “At Prosperity Wealth Management, we focus on helping our clients by specializing in tax reduction and long-term planning.” Good investment planning is more important now as people live longer, with retirements stretching out to 30 or even 40 years. Prosperity Wealth Management considers the possibility that a retiree could live to 100 or need expensive long-term care and plans accordingly. One way Prosperity Wealth Management does that is by taking advantage of the tax-favored status of whole life insurance. Prosperity uses a special kind that grows tax-deferred while allowing clients to access their funds — meaning they can access their savings tax-free for large expenditures like a college education. These plans can provide tax-free income for life, when structured properly, Gidley said, adding that the guaranteed growth of a whole life insurance plan sidesteps the volatility of the stock

market. (These guarantees are based on the claims paying ability of the issuing insurance company.) Having access to their life insurance proceeds during their lifetime also allows investors to absorb the draining costs of long-term care, she said. “When a client entrusts me with savings that took them decades to build up … I will always put my client’s interests above my own in the management of their portfolio,” she said. New Department of Labor fiduciary rules — which mandate all conflicts of interest be disclosed to potential clients as well expanding the definition of fiduciary to include insurance salespeople and brokers, among others — are how Gidley has operated since the 1980s. She has always put the client first, even when that proves challenging. Prosperity Wealth Management might take a generally more conservative approach to wealth management than a traditional alpha approach firm, but the long-term gains can really pay off for clients. Gidley described her biggest professional challenge as countering “market exuberance” during boom times; communicating with clients that a bust is on its way can be a difficult conversation that requires courage. “My greatest challenge was persuading clients to lock in their

profits and safeguard their portfolios in 1999 after five years of the most outsized gains in stock market history,” she said. “My recommendation has proven prescient when the stock market peaked early in 2000 and then proceeded to lose half its value over the next three years.” Gidley’s careful approach has earned Prosperity Wealth Management a number of accolades. The firm has earned media coverage from Forbes Magazine, Business First of Buffalo, Buffalo Spree Magazine, and numerous television programs. Gidley also is publishing two books this year — 10 Most Expensive Tax Mistakes That Cost Business Owners Thousands and 10 Most Expensive Tax Mistakes That Cost Doctors Thousands. A third book, 5 Keys to Achieving and Enhancing Financial Independence, is in the works. Accolades are nice, but taking care of hard-earned money and helping clients meet their goals is better. “My greatest reward is being told that I made a difference in the lives of the clients I serve, that I assisted them with pursuing their financial dreams,” Gidley said. For more information see http:// prosperitywealthmanagement.com/

8201 Main Street, Suite 9 | Williamsville, NY 14221 | 716-633-8000 | Toll Free: 888-838-8688 | www.prosperitywm.com Securities offered through First Allied Securities, Inc. Member FINRA/SIPC. Advisory services offered through First Allied Advisory Services

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by matthew d. edward

technology to the rescue

Wisconsin firm uses early warning system to protect client wealth

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onitoring the market’s daily convulsions can leave investors stressed and overwhelmed – and bringing in a financial advisor on short notice to troubleshoot after a sudden loss isn’t always possible, either. Point Wealth Management, LLC, protects clients from unexpected market swells with WealthGuardTM, a powerful early warning system designed to detect drastic portfolio fluctuations and loop in an advisor when needed. The system often allows advisors and investors to communicate and act before losses accumulate. “It starts the conversation before [a downturn] even becomes a problem,” Jeremy Reif, founder of Point Wealth Management, LLC, told The Suit Magazine. Reif, who values the role technology can play in wealth management, believes WealthGuardTM allows his firm to shore up clients’ wealth faster than competitors can. Reif leads Point Wealth with partner Jere Smith, CFP®, CLU. The Wausau, Wisconsin, firm serves clients throughout the state, but Reif wants to expand their success to clients nation-wide. Reif and Smith specialize in creating financial independence for pre-retired and retired clients. The typical minimum to invest is $100,000. Reif – originally drawn to wealth management by a “fake stock market” game in his high school economics class – made his first investment during high school. The late-1990s dotcom bubble pushed Reif’s first few dollars through the roof – that is, until the market turned. “I thought I was a genius, originally. And then when I went to college and 2001 happened, I realized I didn’t know as much as I thought I did,” Reif said. Reif spent several years post-college successfully working for a large broker-

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age, a life insurance company, and a registered investment advisor. Experience taught him that technology can enhance the client-advisor relationship; success taught him to trust his own instincts. But to enhance doesn’t mean to replace, Reif is careful to point out. Younger, do-it-yourself types may gravitate toward robo-advising and online solutions. But even digital natives who grew up in the cloud will want questions answered – or life will become hectic enough that they need help. The older generation, meanwhile, still wants to speak to an advisor, but the technology is there to help. WealthGuardTM develops a risk profile for investors and creates a “red line” at the largest loss they are willing to take. Once a portfolio dips below the red line, alarms ring for both the advisor and client. The risk profile provides each investor

Point Wealth, LLC is an independent, fee-only company. We are specifically founded on helping retirees or soon-to-be retirees with their financial independence by embracing the latest technology by being smarter in their way of investing with a tailored solution – something Reif strives for. “Since every client is different, the advice for the situation should be equally different,” he explained. Technology remains just a tool, however. Reif – who prides himself on acting as a fiduciary to clients – said that creating custom retirement plans for clients, developing long-term care strategies and asking whether he would recommend investment choices to his parents, still require that human touch. “Yes, the technology is great, but it certainly has its limitations,” Reif noted.

For more information about Point Wealth Management, LLC, visit: www.pointwealthmanagement.com To learn more about WealthGuardTM see: www.pointwealthmanagement.com/ wealthguard


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by a.m. lehner

RETIREMENT PLANNING BEYOND NUMBERS

Funding the nest egg is only the first step to a successful retirement

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ith advancements in healthcare and lifestyle choices, today’s retirees face a real threat of outliving their finances. According to the Social Security Administration, a quarter of all 65-year-olds will survive past 90, and one in ten will live past 95. Unfortunately, for many the numbers simply don’t add up. According to Debbie Craig, CFP®, MBA, CRPS®, Branch Manager of Craig Wealth Advisors, we’ve reached a juncture where Americans can no longer rely on either the government or pensions from employment to fund retirement. “Neither of these things happen anymore, and everyone needs to be able to prepare and save on their own behalf,” she said. “In order to ask an individual to do that, you have to give them an education.” Craig, who strives to make financial conversations accessible and easy to understand for all involved, continually tries to educate her clients – not only on how to save – but also on why it’s so critical for them to be preparing for an eventual retirement. Client education also includes guiding them through making strategic decisions about when and how to make financial decisions that carry a greater impact, such as hitting the sweet spot in taking social security benefits. According to Craig, every individual and couple has a different “break-even” point when deciding if it’s more advantageous to take longer distributions of lower amounts, or wait and receive more money over fewer years. Twelve to 15 years is the average break-even point. Having entered the financial services industry during the tumultuous 2000s, Craig excels at managing risk and helping to ensure that her clients have the funds they need for retirement. Her p.50

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investment philosophy is summed up in three steps: income today, income tomorrow and flexibility. “You have to be able to generate a nest egg in a conservative and consistent fashion,” she emphasized, adding that the ultimate goal is to have a plan that generates enough income from interest, dividends and bank guaranteed products to replace the loss of a paycheck. But Craig’s retirement education plan goes far beyond straight fiscal facts and figures. As part of her client outreach, she is implementing a new educational series, including webinars, aimed at diving deeper into helping people prepare for the psychological and emotional impacts of retirement as well. “Emotionally, it’s really hard,” Craig said. Everything about a person’s life changes – routine, friends, income, purpose and health. “Work is not just about money,” she added. “There has to be something we are looking forward to that will fill in the blanks.” Time with grandkids, hobbies, charitable works

and travel are all good forward-looking goals. As a strong proponent of both education and communication, Craig appreciates the increased access to online information and tools now available to the public, noting how it helps clients and advisors have conversations with more meaning and impact right from the start. 10709 Coy St PO Box 369 Alden, MI 49612 231-331-5500 2915 Garfield Rd N Suite A Traverse City, MI 49686 231-943-2920

www.craigwealthadvisors.com

Craig Wealth Advisors is an independent firm. Securities are offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Any opinions are those of Debbie Craig and not necessarily those of RJFS or Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no assurance any of the trends mentioned will continue or forecasts will occur. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.


by matthew d. edward

DOES YOUR ADVISOR

REALLY KNOW YOU?

if not, neither one of you are stepping up

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inancial advisors may have thorough industry knowledge, but if they don’t have a full and complete understanding of you, your motives, personal plans and legacy goals, Craig Pesce, CFP ®, Vice President and Director of Marshall & Sterling Wealth Advisors says they’re simply not doing their job to the best of their abilities. “Fiduciary competency is a must. That

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goes without saying.” says Pesce. “But if we don’t take that knowledge and apply it in a specific and custom manner tailored to what our client has worked his or her entire life for, what good is it?” The Poughkeepsie, New York, firm is a division of a 150-year-old risk management company, currently ranked 33rd among privately held insurance companies in the US, according to Insurance Journal’s 2016


Top 100 Independent Property and Casualty Agencies report. Marshall & Sterling Wealth Advisors are a registered investment advisor offering financial planning, investment advice and Retirement Plan consulting. To be effective, investing and financial planning has to be a collaborative effort. Investors and advisors need to work together to develop tailored investment solutions. Pesce’s team is very hands on. Their client relationships always begin by asking a lot of questions. “We know each and every one of our clients.” he says. But you as the investor also have responsibilities . . . be open and speak up. As an investor, your input is essential for your advisor to properly guide you. “Leaving

your advisor to interpret what your goals are is a losing proposition for everyone involved. We look for individuals and businesses that are engaged in the process, recognizing it’s not just about earning. It’s about planning, growing, and protecting their wealth.” said Pesce. “When a client gets that and values our guidance and support, it’s a powerful combination.” Working with clients to find a custom solution recently has taken on new importance with the industry shift away from the “alpha approach.” “Many clients come to Marshall & Sterling seeking alpha, but the conservative approach delivers more consistent rewards over the long-term.” Pesce said. “And our team is in it for the long term.” Building customized solutions

requires knowing investors, particularly from one generation to the next. Approaching newer investors such as millennials — who grew up watching the market lurch up and down, often with disastrous consequences for their parents — requires new tactics like online tools. The industry is changing as well, with new Department of Labor fiduciary rules going into effect this April and additional 401k disclosure re¬quirements complicating compliance. Increased longevity also complicated the planning process as now clients must contend with 30 or 40 year retirements — something Marshall & Sterling deals with by projecting longer life expectancy and increasing medical expenses in its models to provide a “cushion,” Pesce said. None of the changes affect Marshall & Sterling’s basic promise to put investors first, Pesce said. A placard in his office lists the top three rules of wealth management; all three are: “Always do right by the client.” “It’s that simple,” he said. “If you look yourself in the mirror at the end of every day and know that you put the client first, then we all win.” For more information see: www.ms-wealth.com

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Securities offered through LPL Financial, Member FINRA/SIPC. Investment Advice offered through Marshall & Sterling Wealth Advisors, a registered investment advisor. Marshall & Sterling Wealth Advisors, Marshall & Sterling Wealth Management, and Marshall & Sterling Inc. are separate entities from LPL Financial.

THE SUIT MAGAZINE JAN p.53


by amy armstrong

Every Dollar

COUNTS

MARC AGEL, SUSAN HART, LORI MURPHY, KARI SALERNO, CHRIS KIRK, ROBERT AGEL

D

on’t leave any possible monetary gains on the table. This is the goal behind active tax loss harvesting, a technical financial maneuver allowing an investor to sell a losing investment, and then collect – or harvest – a capital loss which can be used to offset capital gain for tax savings. It sounds complicated, but for those who know how to use the formula, it is viewed as “just math” that needs to be completed in order to bring a more productive return to clients. Active tax loss harvesting could also be considered the financial version of the practice of gleaning, in which people go back through the fields to pick up any fruit and vegetables left behind after the main harvest is completed.

p.54

THE SUIT MAGAZINE - JAN 2017

The bulk of those fruits and vegetables have nothing wrong with them from a nutritional standpoint: It just takes some extra effort to gather them up. “I am just amazed at the number of advisors managing taxable funds, who just leave that money on the table,” Marc Agel, a partner in the Albany Advisor Group based in Albany, New York noted. As part of upstate New York, agricultural ideals like gleaning in the fields are not only understood, but are also part of the culture. In the past year, Agel and his team have saved the firm’s clients more than $95,000 by using the active tax loss harvest method. He says, somewhat jokingly, that perhaps it is better to be “lucky than good,” in terms of timing the buyback into the market after selling a loser. Either way, for Agel, “it just doesn’t make sense to leave those dollars

laying there. ”This is one aspect of the financial literacy of clients that he strives to improve. Agel sees it as part of his job as a financial advisor to not just help clients avoid mistakes, but also to teach them why certain choices aren’t good ones to make. It includes the amount of risk to take in a portfolio in order to achieve set goals. It also includes learning how to avoid debt – a step his Millennial and Generation X clients often mention to him. The advice he gives is best summarized by his firm belief in being a fiduciary for his clients first, before having any other interaction with them. Agel says it is easy for him to preach the fiduciary model because it is the only model he’s ever used. “I feel it has the highest propensity to alleviate conflict of interest on the client’s behalf,” Agel said. “Nothing is perfect as long as human are involved, but as long as money is changing hands, the fiduciary model offers the greatest amount of potential for eliminating any conflict of interest that can damage the client.” Learn more about Marc Agel and Albany Advisor Group online at www.albanyadvisor.com

18 Corporate Woods Albany, NY 12211 518-689-3577 AlbanyAdvisor Group is a division of PKS Advisory Services LLC, an SEC Registered Investment Advisory Firm. Investments and insurance products are made available through Purshe Kaplan Sterling Investments and are: NOT FDIC INSURED·NOT BANK GUARANTEED·MAY LOSE VALUE·NOT A DEPOSIT·NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY. Securities offered through Purshe Kaplan Sterling Investments, Member FINRA/SIPC, Headquartered at 18 Corporate Woods Blvd., Albany, NY 12211


Elite N.Y. attorneys with over 40 years of combined experience!

The Law Office of

Civil | Commercial | Financial Securities | Healthcare 140 Grand Street, White Plains, New York 10601 P: (914) 686-1500 • M: (914) 686-1504 E-mail: russell@yankwitt.com Please visit us a: www.yankwitt.com

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by amy armstrong

Adapting to a

Changing World

There aren’t a lot of concierge boutique-type services available for people with investable assets of less than a half million.

W

orking with those who have assets worth $100,000 just isn’t profitable for most wealth advisors who take the fiduciary approach and work on a fee-only basis. Yet, people who fit into the second category still need financial advice, and do indeed have assets that are worth protecting and growing. Fortunately, wealth advisors such as Leo Daprile ChFC, CLU., of Gem-Young Wealth Advisors, LLC, based in Youngstown, Ohio, not only recognize this need, but have also found a solution that creates a profitable avenue by which they can provide services for the everyday investor, but more importantly, also provide an entry point for those new to financial planning to begin investing with some level of professional guidance. Daprile and his team call their secondary distribution channel “gWealth Select,” and it offers online advice to investors with $10,000

or more. “We are very excited about this new opportunity,” Daprile told The Suit Magazine. “We call it our ‘light version’ of what we do for our clients in the gWealth Premiere program. There are many investors in the market today who do not need that level of full comprehensive planning, but still do require financial advice.” Daprile describes it as a hybrid between digital advice and a robo advisor. He is constantly on the look-out for opportunities to differentiate his firm and its services from the competition. In retrospect, that is how Gem-Young Wealth Advisors came into existence. Daprile recalls having lunch with a friend and two other wealth advisors when he suddenly had an “a-ha” moment. He realized that they each pretty much looked the same: they talked the same, they wore the same type of suit – they

Gem-Young Wealth Advisors LLC A family business doing business with individuals and families.

even walked the same. He thought to himself, “How does a potential client know which one of us to choose, as we all do the same thing and appear the same?” Daprile’s question was the genesis of the boutique firm he runs today. “That is how we morphed into the company we are today,” Daprile explained. “We wanted to provide comprehensive risk management to our clients for their wealth and their assets. Our clients want professional advice at a fair value. That is what we have become.” Today, his work is characterized by client education, including teaching how the concept of “buy low, sell high” actually works, and identifying emotional money triggers that often lead clients to

make financial mistakes. Daprile helps clients identify investments that best meet their individual plan goals, rather than the ones that beat the S&P 500 or the Dow Jones Industrial. He also makes liberal life expectancy estimates to give his clients a complete look at how aging will impact their finances. Daprile is poised to make necessary changes immediately on his clients’ behalf. “I no longer stay married to an idea forever just because it worked a couple of years ago,” Daprile emphasized. “We have to be able to adapt to our changing world.” Learn more about Leo Daprile ChFC, CLU., and Gem-Young Wealth Advisors, LLC, online at www.gemyoungwealth.com

Leo Daprile, ChFC, CLU President of Gem-Young Wealth Advisors, LLC 3792 Starr’s Centre Drive Canfield, OH 44406 P – (330) 533-6936 leo@gemyoung.com p.56

THE SUIT MAGAZINE - JAN 2017


PRESENTING THE CASE by frank graziano

A

s a young lawyer, charles cole was drawn to trials. “I liked being able to talk to juries and see the courtroom almost like a theater, a form of performance art,” he told The Suit. It’s a philosophy that, as a trained dramatist, he employs with success. In fact, 55 of the 60 cases Cole has tried before a jury have won favorable or projected outcomes. In his 13 years at Schuyler, Roche, & Crisham, he’s been instrumental in expanding the firm’s size and scope. In 2008 he spearheaded a merger that added 10 lawyers to the roster and opened the practice to medical cases. Now, in addition to commercial litigation, Schuyler, Roche & Crisham also handles malpractice defense for physicians, specialists, and medical device manufacturers. Cole is a shareholder in the firm and has been practicing law since the 1970s. He has also trained at Chicago’s famous Second City, a comedy club and school of improvisation. “It helped me greatly in terms of my courtroom

skills and being able to and entertain and stimulate jurors, keeping them engaged in the argument I’m presenting,” he says. Lately, there’s one change in the field of law that’s been bothering Cole: a growing lack of civility in the courtroom. As a man with unwavering faith in the judicial system, Cole believes that when opposing parties behave amicably and professionally, it’s a more efficient machine. “Maybe that’s a pie-in-the-sky kind of view, a very optimistic kind of view, but that’s sort of been my M.O.,” he said.

One Prudential Plaza | Suite 3800 130 East Randolph Street Chicago, Illinois 60601 312 565.2400 www.srzlaw.com

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THE SUIT MAGAZINE - SEPT 2011


2016 EDITORIAL

TSM

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

March

September

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

May

November

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

Editorial Department Michael Gordon The Suit Magazine 718.619.8520 editorialdept@thesuitmagazine.com www.thesuitmagazine.com

Issue 76  

How will Trump Elect lead us into 2017? A new president-elect stepping in on January 20th, has made promises to make America great again, a...

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