Tag Archives: financial

credit

Wells Fargo Offers Free Credit Scores to Customers

In an effort to help customers succeed financially, Wells Fargo (NYSE: WFC) is offering its customers their free consumer credit score and complimentary credit report through Nov. 16, 2014. For more information about this limited time promotion, visit https://www.wellsfargo.com/freecreditscore.

“A recent Wells Fargo survey  said 27 percent of Americans are more worried about their financial health than their physical health,” Pam Conboy, lead region president for Wells Fargo in Arizona. “In much the same way an annual check-up helps us stay physically healthy, consumers can take control of their financial health by regularly checking their credit and taking steps to improve it.”

About the Free Consumer Credit Score Program

From Oct. 1 – Nov. 16, 2014, all Wells Fargo customers can access their free consumer credit score and complimentary credit report by visiting a Wells Fargo banking store and obtaining a unique personal access code from a Wells Fargo banker.

Since its inception in 2012, more than 800,000 customers and team members have taken advantage of the promotion and obtained their free consumer credit score and complimentary credit report. In its third year, the Wells Fargo’s Free Credit Score promotion coincides with the American Bankers Association’s Get Smart about Credit day, a national campaign of volunteer bankers who work with young people to raise awareness about the importance of using credit responsibly.

As part of the Get Smart about Credit program, Wells Fargo set a goal of reaching at least 60,000 people through volunteering in classrooms and community centers across the country to teach credit lessons.

Tips for Credit Health and Wellness
A strong credit profile can help consumers qualify for lower interest rates. Yet, many people wait until they need a loan to think about their credit situation. Wells Fargo offers these tips to responsibly manage their credit:

• Check your credit report annually. Make sure your credit report contains current and accurate information. Errors could negatively impact your credit score and even be a sign of possible identity theft. Request a free copy of your credit report at least once a year from www.AnnualCreditReport.com  or call toll-free 1-877-322-8228.

• Pay your bills on time. Your payment history is one of the biggest factors in your credit score – including things that may surprise you like on-time payment of your rent and cell phone bill. Using free online tools, often available through your financial institution’s online banking, can help you develop a budget and create an automatic bill payment schedule.

• Keep debt at no more than 35 percent of your gross monthly income. Lenders look at the amount of debt a consumer has compared to their monthly income when making credit decisions.

• Understand how strong credit impacts your bottom line. Your credit score influences the interest rate you qualify for. The lower the interest rate, the less you’ll pay in interest over time. Many sites, including Wells Fargo, offer calculators that help consumers understand how interest rates impact their payment and the total cost of the loan.

• Establish and maintain healthy credit – even if you don’t need a loan. Lenders aren’t the only people who use credit scores to make decisions – many insurance companies, cell phone providers and landlords do, too.

Tumbleweed Logo

Tumbleweed Center Relocates Phoenix Headquarters

Tumbleweed Center for Youth Development will expand and relocate its headquarters from Downtown Phoenix to Siete Square II, 3707 N. 7th St. in Midtown, according to Cushman & Wakefield of Arizona, Inc.

Tumbleweed was established in 1972 with a mission to provide a safe space for collaborating with youth and young adults in the community who are vulnerable or experiencing homelessness.  The organization serves more than 3,000 young people each year, ages 12 to 25 years.

“Tumbleweed made a very shrewd decision to expand and relocate its headquarters at this time, locking in to today’s historically low rates.  This allowed us to lower occupancy costs over the long term,” said Paul Andrews of Cushman & Wakefield.  “This strategy cut thousands of dollars in future rent expense that now can be redirected back into the organization’s much needed programs that serve Metro Phoenix’s teenage youth.”

The local non-profit has leased 13,047 square feet at the garden office complex and will locate from 1419 N. 3rd Street in fall of 2013.

Siete Square II is one of four buildings within the larger Siete Square garden office complex.  The Indiana Farm Bureau owns Siete Square II.  Paul Andrews of Cushman & Wakefield of Arizona, Inc. represented Tumbleweed Center for Youth Development in its lease negotiations.

Phil Breidenbach and Lindsey Carlson of Colliers serve as exclusive leasing agents for Siete Square II, representing the Indiana Farm Bureau.

WellsFargoLogo

Wells Fargo Plans 410,000 SF Expansion in Chandler

By Eric Jay Toll, Senior Correspondent for Arizona Builder’s Exchange |

Special to Arizona Commercial Real Estate magazine

 

Wells Fargo unveiled its 410,000-square-foot Chandler campus expansion to a neighborhood meeting in the East Valley September 16. Arizona Builder’s Exchange broke the story Monday night that the bank filed a rezoning application with the city to allow a pair of four-story buildings on the northwest corner of Price and Queen Creek roads in the Price Corridor.

More than 2,500 additional employees will work in the new Wells Fargo buildings, bringing campus employment to more than 5,000 workers.

The bank has selected an architect, but has not named the contractor for the project. A formal announcement with construction schedule is expected shortly. AZBEX reports sources saying the project could cost as much as $90 million.

The building shapes, design and materials are intended to mirror Phase I of the campus. The offices will rise to 64 feet. Three more buildings and parking garages are projected for future phases. The city has not set a hearing date for the zoning. Wells Fargo has not yet announced its construction schedule.

Read the original story here.

 

Eric Jay Toll is the senior correspondent for Arizona Builder’s Exchange. His freelance work appears in a number of regional and national publications, including upcoming stories in AZRE and AZ Business.

Kirk McClure

McCarthy Building Companies Hires Kirk McClure As Director Of Business Development

 

McCarthy Building Companies recently hired Kirk McClure as Director of Business Development for the Southwest division. His primary focus will be on municipal, higher education and commercial construction projects.

In this position, McClure will play a key role, providing more than a decade of industry expertise with a diverse, well-rounded background in project management, commercial development and planning, and strategic planning.

He has been engaged in a broad range of business development and project management positions throughout his career, most recently as Vice President of Business Expansion for the Arizona Commerce Authority (ACA), the state’s leading economic development organization.

McClure, a LEED accredited professional, has a critical understanding of the commercial real estate industry. Prior to his position at the ACA, he worked in land planning,project management and business development for Langdon Wilson, Atwell-Hicks, Graef and The Brooks Companies.

“Kirk has a passion for the commercial real estate industry and is extremely active within business circles here in Arizona,” said Bo Calbert, president of McCarthy Southwest. “The relationships he’s built through his previous positions and his volunteer activities will serve him well in his new role at McCarthy.”

McClure serves on the board of directors for the Arizona Association of Economic Development (AAED), and is the chair for their annual golf tournament. He is also a member of National Association of Industrial and Office Properties (NAIOP), SouthwestChapter of American Association of Airport Executives (SWAAAE) and has been an active member of CoreNet Global, Valley Partnership, the U.S. Green Building Council (USGBC), the American Planning Association (APA), and the Urban Land Institute (ULI).

He is also the founder and organizer of the monthly A/E/C Golf Invitational at Grayhawk Golf Club,which includes a league of professionals that work and support the development industry. He is also a USA Hockey-Certified youth hockey coach and has been coaching for more than 13 years, most recently with Desert Youth Hockey Association (DYHA).

He earned his MBA from the W. P. Carey School of Business at Arizona State University (ASU) and also holds a bachelor’s degree in Urban Planning and Design, also from ASU.

 

Greg Guglielmino

Investment Specialist Greg Guglielmino Joins Colliers' Phoenix Office

 

Colliers International in Greater Phoenix announced that Greg Guglielmino, senior associate, has joined the Phoenix office.

Guglielmino specializes in the acquisition and disposition of single- and multi-tenant office and medical investment properties for private and institutional clients. He partners with Marcus Muirhead, associate vice president of investments. Guglielmino is also a member of Colliers’ National Healthcare Services Group.

“Greg is a skilled professional and a great addition to our team,” said Bob Mulhern, managing director of Colliers. “His experience in office and medical investment sales will complement and enhance the capabilities of our established investment professionals. We are pleased to welcome Greg to Colliers.”

Guglielmino has more than 5 years of experience as an investment specialist, focusing on medical office property sales. He is an expert in financial modeling, property evaluation, detailed market research, and submarket trend analysis.

His experience includes working on behalf of private investors and institutional lenders in the sale of REO assets and investment properties involving closed listings and buyside opportunities. Prior to joining Colliers, Guglielmino was an investment associate with Marcus & Millichap’s Phoenix office.

“There are a lot of great individuals at Colliers and Marcus Muirhead is one of those individuals,” Guglielmino said. “With our similar investment backgrounds and the team approach encouraged within the organization, it is a natural fit to team with him. Together, our abilities and skill sets will add value for our clients and expand on Marcus’ positive track record for success and client satisfaction.”

He adds that the strong camaraderie within Colliers provides a positive, collaborative environment that reflects a commitment to achieving clients’ goals.

“The Colliers’ culture, management and people are refreshing and I am excited to be a part of the team.”

Guglielmino holds a Bachelor of Interdisciplinary Studies in Small Business and Psychology and graduated Magna Cum Laude from Arizona State University.

 

profound financial

Profound Financial Helps Develop Plan For Disabled Children’s Futures

Dani Gardiner, Founder of Profound Financial, PLLC will host a free workshop on Saturday, April 28, called “Plan Now For Your Disabled Child’s Financial Independence.”

The workshop will be held in the office of Profound Financial, PLLC at 7121 W. Bell Rd., Suite 130, Glendale, from 9:30 am – 11 am. RSVP’s are appreciated.

Gardiner strongly believes in giving back to the parents of disabled children because she was born into a family that is ravaged by the hereditary disease Fragile X Syndrome, a genetic condition involving changes in part of the X chromosome which can cause extreme learning disabilities. Fortunately, Gardiner is not a carrier and is one of the only people in her family to not suffer from the disease. Her mother and three brothers are affected.

If you would like more information about the workshop or any of Profound Financial, PPLC’s services please contact info@profoundfinancial.com or call 623-566.9821.

For more information on Profound Financial, visit their website at profoundfinancial.com.

Dad working from home

Do Men Care About Work-Life Balance?

In a word, yes! When it comes to work and family, men and women are more alike than different, according to a new research study of employees around the world. This finding conflicts with a widely held assumption that male identity is rooted in work, whereas women place a higher priority on personal and family life.

The Global Study on Men and Work-Life Integration (WorldatWork and WFD Consulting 2011) sought to understand how organizations can remove the stereotypes and barriers that prevent men from utilizing work-life offerings, as well as what prevents leaders and managers, who are often men, from supporting the use of work-life options.

Findings include:

Work-life programs are not as effective as they can be because managers still cling to the notion that the “ideal worker” is an employee with few personal commitments. A majority of managers still believe that the most productive employees are those without a lot of personal commitments.

Financial stress is a top work-life issue across country and gender, and the top issue for most. Employees increasingly spend part of their on-the-job time addressing financial concerns. Employers can ease this stress by increasing employee assistance programs, offering financial counseling programs, and being as transparent as possible about the corporate financial situation and job security.

“Working men and women around the world seek the same holy grail: success in both their work and family lives,” said Kathie Lingle, WLCP, executive director of WorldatWork’s Alliance for Work-Life Progress. “The assumption that male identity is rooted in work and not family is a major impediment to the effective integration of employees’ work and family lives.”

Added Peter Linkow, president of WFD Consulting: “Leaders must give voice to their own stories of work-life integration, warts and all. This would be a powerful step toward reducing employees’ fears that utilizing the benefits they have been given will jeopardize their careers.  This is especially important in a climate where financial stress and job security are top-of-mind for workers.”

Rommie Flammer President and CEO China Mist Tea Brands - AZ - Business Magazine Nov/Dec 2010

China Mist’s Rommie Flammer Talks About Her First Job

Rommie Flammer
Title: President and CEO
Company: China Mist Tea Brands

Describe your very first job and what lessons you learned from it.
At 12 years old, a friend and I got together a bucket, soap and a sponge, then went door to door asking if we could wash our neighbors’ cars. When they would ask “how much,” we would say “whatever you want to pay us.” I quickly learned my first business lesson, which is have an idea of what your service is worth before heading out. This job was short lived after we knocked on the door of Vern and Claudia Lipp, who bred and showed Himalayan cats. When we asked if we could wash her car she replied, “No, but I have a bunch of litter boxes that need cleaning and cats that need grooming.” …  For the next three years I cleaned and groomed cats, a job that could have definitely earned a spot on the Discovery Channel’s “Dirty Jobs with Mike Rowe!”

Describe your first job in your industry and what you learned from it.
My first industry job was at China Mist right around the time I turned 16 years old. Over the course of 26 years, I have learned an incredible number of lessons and I still learn something everyday. … The most important lesson is to surround yourself with truly great people because your team is your greatest asset. Average employees don’t last long at China Mist. Next, is to always challenge the norms of your industry. … Indeed, it is the people who continually strive for a better product, better process, etc., who set themselves and their companies apart from the rest. Finally, focus on what you do best.

What were your salaries at both of these jobs?
When I started at China Mist, I earned minimum wage, which was around $3.35 per hour at the time. I cannot recall my hourly wage at Hotlipps Cattery, but the memories are priceless.

Who is your biggest mentor and what role did they play?
I have had many mentors along the way, but would have to say that Mignon Latimer has been the biggest in my career. Mignon is the wife of a consultant hired by China Mist some years ago. I was an 18-year-old general manager at the time I started working with her. She taught me how to read and interpret financial details important to the company and precisely why they mattered. She gave me a truly sound financial base from which to build.

What advice would you give to a person just entering your industry?
While the barrier to entry is quite low, the competition is strong, so be sure you have a strong point of differentiation.

If you weren’t doing this, what would you be doing instead?

I really cannot imagine doing anything else, but if I had to pick a new industry it would be something in real estate.

Arizona Business Magazine Nov/Dec 2010

Health Care Reform in Arizona - AZ Business Magazine Nov/Dec 2010

Business And Community Leaders Are Trying To Figure Out What Health Care Reform Will Mean In Arizona

For government and business, providers and patients, the U.S. health care reform legislation promises a new world of costs and care.

Most individuals without insurance will be able to get it. Those who have insurance already probably will have to pay more for it. Hospitals, doctors and others in the front lines of health care will begin to change long-established ways of doing business. State governments and many businesses, already battered by recession, will face new costs and possibly some benefits.

But beyond these generalizations, little is certain about what health care reform will mean in Arizona and across the country. The bill is vague in many areas and leaves important details of implementation to be determined by federal regulators and other officials in the weeks and months ahead.

“Quite frankly, we won’t know the financial impacts until we move through the process and see what the federal government and insurance companies do,” says Donna Davis, chief executive officer of the Arizona Small Business Association (ASBA).

Barry Broome, president and chief executive officer of the Greater Phoenix Economic Council (GPEC), says it is too early know what the bill will mean.

“It sounds very good to be able to cover the uninsured, but what the costs are and how they are going to be distributed are still not clear,” he says.

Marjorie Baldwin, director of the School of Health Management and Policy and assistant dean at Arizona State University’s W. P. Carey School of Business, says it is important to note that the law’s primary purpose is to cover the uninsured.

“This bill is about access,” Baldwin says. “It’s designed to cover the uninsured. There is much less in it about quality of care and little about cost controls.”

On what the price tag for health care reform will be, Baldwin says, “The one safe prediction is that it is going to cost much more than anticipated.”

Hospitals and doctors
Whether the health care overhaul is ultimately deemed a success will be determined to a large extent by what happens inside the nation’s hospitals, clinics and doctors’ offices.

Peter Pavarini, a health care lawyer for Squire, Sanders and Dempsey and an adviser to health care organizations, believes hospitals are actually well-positioned to adapt to the new law.

“Hospitals have been anticipating something happening for some time,” Pavarini says. “Hospitals have the resources to prepare better than some of the other players in the health care system.”

Several provisions in the law are expected to lead to a dramatic shift in the way hospitals are paid by insurance. Under the existing system, providers receive set rates for specific medical procedures. The new law moves toward a system in which hospitals receive a set amount for treating an overall condition or a so-called “bundled payment.” This shift is expected to require more detailed treatment plans, coordinated care and closer cooperation among hospitals and physicians.

“With the bundled payments, you have to have a more integrated approach and an approach that aligns physicians and hospitals,” says Suzanne Pfister, vice president of external affairs at St. Joseph’s Hospital and Medical Center in Phoenix.

The hospital already has been moving in this direction, according to Pfister. St. Joseph’s has forged a series of partnerships with area health care organizations, including outpatient and short-stay providers United Surgical Partners and SimonMed Imaging
.
“We are continuing to look at moving from acute care to a continuum of care,” Pfister says.

Pavarini believes the new payment systems for Medicaid and Medicare will bring big changes to care at hospitals. When the system is in place, hospitals will get a set payment for delivering all of the care a patient receives from 72 hours before admission to 30 days after discharge, he notes.

“That’s a whole different model from what we have now,” Pavarini says. “This means it’s not good enough just to get the patient in and out of the hospital. It means testing can’t be duplicative. And it means patients better be ready for discharge when they’re released.”

Pavarini says doctors and hospitals will need to cooperate more closely as the law is implemented. He sees hospitals forging formal alliances with physician groups and appointing more practicing physicians to their boards of directors.
A more basic concern for hospitals is how much they will be paid. Because expansion of Medicaid is a key feature of the law, hospitals are concerned about long-term revenue.

“Payments are going to shift more to the level of Medicaid, and Medicaid has not been a particularly good payer,” Pfister says.

Officials at Phoenix-based Banner Health, one of the largest nonprofit health care systems in the country, are still examining the legislation to assess its consequences.

“This reform is primarily about health insurance, not health care reform,” the organization said in a statement. “It will result in expanded AHCCCS (Medicaid) coverage in Arizona and access to insurance, but the need remains to address reducing the cost of health care.”

The bill includes a number of provisions that will increase the role of primary-care physicians. Medicaid fees will go up for primary-care doctors, who also will be eligible for bonuses from Medicare.

St. Joseph’s is concerned about being able to find enough physicians as health care reform is implemented in the coming years, according to Pfister.

“Arizona has fewer physicians per capita than the national average, so we face that already. Arizona does not have enough primary-care physicians and even some specialists,” she says.

The larger hospitals that have formal ties to physicians and other providers probably will fare best under health care reform, according to Pavarini. But he believes smaller, more isolated hospitals will struggle and some will close.

“Arizona has a number of smaller hospitals in less populated areas,” he says. “I think the outlying hospitals in rural communities could have difficulty.”

Businesses
While all businesses will be affected by the health care reform law, some will feel it more than others. Probably least affected will be firms that already provide health insurance now and have a pool of employees large enough to allow the companies to self-insure.

“For most large businesses, fundamentally there’s not a lot of change,” says Keith Maio, president and chief executive officer of National Bank of Arizona. “For us, we’ll have to be a little more paperwork conscious.”

ASU’s Baldwin says the principal effect on large employers will be slightly higher expenses, as they absorb some of the cost of the system’s expanded coverage.

“For larger employers, the law is not going to mean a big difference, but they are going to see their costs go up,” she says.

Smaller businesses though will face new uncertainties, and, for some, significant new costs.

“I would say that there is a cloud of concern generally for small businesses,” says Maio, whose bank has many small business customers. “People who have been through the recession and are still slugging it out have learned to survive. But they still have trouble seeing how they can get back to where they were . That’s why something like the health care bill can have such an impact.”

The law offers a complex mix of incentives and penalties designed to spur employers to offer health insurance. In 2014, employers with 50 or more workers who do not provide coverage will face penalties of $2,000 or $3,000 per employee. Some employers who provide insurance and have fewer than 50 workers will be eligible for tax credits.

“In a sense there is both a carrot and a stick,” says Bradford Kirkman-Liff, professor in the School of Health Management and Policy at W. P Carey. “The idea is to create a very strong incentive to provide insurance.”

The tax credits could offset as much as half of the insurance costs for some employers, Kirkman-Liff notes.

“Arizona has a high number of small employers. Many of them don’t provide health insurance, but some do. This would give them a reason not to drop it,” he says.

The law also instructs states to establish insurance exchanges, where small employers and individuals can purchase policies from insurance companies. The exchanges are designed to bring down the cost of insurance by combining groups of buyers into large pools.

But even with government subsidies and insurance exchanges, some businesses will find the burden too large, according Maio.

“The greatest impact will be on those that employ entry-level employees,” he says. “Arizona has a lot of lower-wage businesses who won’t be able to afford to provide insurance. I think some will opt to pay the fine. Then what have you accomplished?”

Another problem that Maio sees is the 50-employee threshold for the coverage requirement. Employers with fewer than 50 can escape penalties for not providing insurance.

“Have you given them a disincentive to adding people?” he asks.

Davis at ASBA says most business owners are focused on short-term challenges and do not have a clear picture of how the law will affect them.

“For some small businesses who fit the prescribed requirements, it will help offset some of their costs,” Davis says. “For others, it simply won’t.”

Data Centers

i/o Data Centers Raises $200M In Two Integrated Financings

i/o Data Centers today announced the closing of $200 million in two financings, including a senior long term credit facility of up to $130 million led by Wells Fargo Bank and Wells Fargo Securities and a $70 million secured facility led by Caterpillar Financial Services Corporation.

“Demand for data centers as a service continues to be strong,” said George D. Slessman, CEO of i/o. “This new long term capital enables i/o to execute its Enterprise Class Data Center Roadmap. We will add 35 megawatts of data center capacity for our customers within the next 12 months.”

In addition, Jonathan F. Mauck, CFO of i/o, noted that “The next phase of our growth plan is fully funded.”

Steven Reinhart, senior vice president of Wells Fargo, said that “The strength of i/o’s customer base, balance sheet and cash flow are a testament to the strength of its business model and management. We look forward to a long term relationship with i/o.”

William Luetzow, managing director of Caterpillar Financial Services’ Global Power Finance-Americas, added, “We’ve enjoyed a long-term financing relationship with i/o since its inception. The high quality i/o power systems and their customer base of multi-national enterprises are an excellent fit with Caterpillar’s worldwide finance and distribution capabilities.”

i/o has grown rapidly over the past three years and recently announced the launch of i/o ANYWHERE, a modular data center service that allows it to deploy data center capacity anywhere a customer requires it.

“This latest financing, key additions to our management ranks, and our world class customer base position i/o for additional growth and success as the industry’s leading provider of enterprise co-location and data center solutions,” Slessman said.

Sluggish Demand for Office Space in Phoenix

Sluggish Demand for Office Space in Metro Phoenix Continues

The Phoenix office market continued to feel the effects of a sluggish and wavering economy, according to Cassidy Turley BRE Commercial’s 3Q 2010 office market trends report released today.

Economic indicators remain mixed causing uncertainty as to whether our economy is headed into a “double dip” recession or a period of slow growth. The best word to describe market conditions during the third quarter is flat. Net absorption was negative for the second time this year and the overall vacancy rate increased 30 basis points to finish at an all-time high of 27.9%.

Tempe/South Chandler and 44th Street Corridor posted the largest gains in net absorption; collectively they gained more than 257,590 SF in the third quarter. Downtown North and Airport Area were the two submarkets with the largest declines in occupancy; they collectively lost 221,927 SF during the third quarter. The majority of leasing activity has been in space that is an upgrade to the tenant’s prior location, otherwise known as “flight to quality.”

This has been a trend for several quarters, as nearly all positive absorption, both the quarter and year-to-date, have come from either Class A buildings or new construction. Class A average asking rates continue
to decline as landlords compete for tenants by offering heavy concessions and discounted rates. Class A rental rates dropped nearly 2 percent in the third quarter to finish at $25.07.

With the extreme over-supply of space, overall asking rental rates will continue to soften but at a slower pace and should reach bottom within the next 12 months. Office market leasing is likely to remain flat through 2010 and improve gradually into 2011 as businesses start to add jobs and tenants take advantage of reduced rates. Landlords that have weathered the recession, remained financially strong and adjusted to current market conditions should start to see some relief as tenant demand gradually improves.

With large blocks of premium office space available, lower rental rates, a high quality of life, affordable housing and great weather, Metro Phoenix is positioned to attract companies looking to relocate or add to their current operations. These factors should improve leasing and owner occupant demand bringing some relief to the office sector.

Coins

Can the Savings Rate Save America?

The financial norms of our society have changed considerably over the past five years. Assumptions surrounding retirement, investment returns and job security have all changed 180 degrees.

Perhaps this recession has been so monumental that it will permanently change the old norms and embrace a new realistic standard. Will this crisis create a new generation of Americans that look at money and entitlement similar to those who lived through the Great Depression?

Prior to this current recession, many people were living a lifestyle that was beyond their means. The Bureau of Economic Analysis stated that in 2005, America was only saving approximately 1 percent of its income. For many, the need for consumption of goods and services dominated their paychecks, so much so that they exhausted their savings accounts, ran up credit card balances and stripped the equity from their homes. You could say that America was living an era of overindulgence.

Today, it seems that people appreciate and respect their money more than they have over the past few decades. If they are currently employed, they are grateful to be able to provide for their families, as well as make sure that every dollar is stretched to its full potential.

Consumers now realize that when economic times become difficult, they cannot depend on banks to lend them money. This is why America is now saving more that 6 percent of its income — we are preparing for the unexpected and unknown.

In my opinion, the more people save, the stronger our economic landscape will become over time.

Of course many economists and Wall Street banks would love for consumers to return to their old spending habits, which would create a quick and bliss recovery.  Our economy is dependent on consumer spending and statistics have shown that the American consumer represents approximately two-thirds of the nation’s Gross Domestic Product. Unfortunately, the fundamental problem of overindulgence would not be addressed if this were to happen. We would only be setting the stage for another crisis in the future.

Fundamentally, it is beneficial to our financial system that Americans are saving more. It is unrealistic to assume that the United States economy will bounce back quickly; it will most likely take a number of years and still produce a high level of discomfort.

A slow recovery is acceptable as long as the consumer continues to make smarter decisions financially and attempts to avoid past mistakes. Perhaps if this positive trend continues, could our country’s best years still be ahead of us?

Stocks

Charles Schwab Bringing Hundreds Of Jobs To Phoenix

The investment services company Charles Schwab announced today that it is expanding its operations in Phoenix, which could result in up to 900 new jobs over the next five years.

The company’s main Valley location is at 24th Street and Lincoln Drive. Schwab plans to hire 200 new employees by the end of the year, on top of the approximately 300 that were added last year.

“We currently have approximately 3,200 employees in Phoenix, which makes this home to the single largest population of Schwab employees in the U.S.,” said Joe Martinetto, Schwab executive vice president and chief financial officer. “Our corporate headquarters continues to be in San Francisco, but Phoenix is clearly a very important employment center for us.”

Phoenix Mayor Phil Gordan said the Charles Schwab expansion not only would add jobs, but also $22 million in capital investments.

Schwab currently is recruiting to fill client service positions with starting salaries in the $34,000 to $40,000 range.

“Our purpose as a company is to help people become financially fit — not only our clients and our employees, but the people in the communities where we live and work too,” said Bernie Clark, executive vice president of Schwab Advisor Services, and a Phoenix resident. “This partnership with the city of Phoenix is an example of that — by helping us bring this acquisition to fruition, we are in a better position to continue providing high-quality jobs and opportunities to the people who make Phoenix their home.”

Interested job seekers should visit www.aboutschwab.com/careers.

Pat Walz VP - AZ Business Magazine Sept/Oct 2010

Electronic Health Records And Cancer Care Are On Pat Walz’s Radar For Yuma Regional Medical Center

Pat Walz
President and CEO
Yuma Regional Medical Center
www.yumaregional.org

As the new president and CEO of Yuma Regional Medical Center, Pat Walz is looking to the future. Walz, who was named to the top spot at Yuma Regional in June, has several plans to make the hospital a leader in the health care industry, including implementing an electronic health record system throughout the community, creating a residency program and strengthening the hospital’s cancer care.

He says he wants Yuma Regional to “be leading edge for the whole state of Arizona” in 10 years.

“We don’t want our patients to feel like they need to go to Phoenix or Scripps in San Diego or Tucson,” he says. “We want to provide the same level of service in this community.”

Walz, who has been in the health care industry throughout his career, has been with Yuma Regional for five years, adding that he’d like to stay “as long as they let me. I think this is where I’m going to end my career.”

During his time at Yuma Regional, Walz served as chief financial officer, and the financial stability he attained for the hospital is one of his proudest career achievements.

“We have a very healthy balance sheet, a double-A bond rating and a lot of financial support that makes us able to invest in technology,” which allows Yuma Regional to provide the best health care to the community, Walz says.

In addition to providing a stepping stone to his current position, Walz says one thing he has learned from his background in finance is to always speak the truth.

“From a finance standpoint, one thing I’ve always prided myself (on) is providing accurate information,” he says. “I think when you establish that with physicians, staff, community — anybody — then when you talk people believe you.”

Another way the hospital serves the community is by being a member of the Arizona Hospital and Healthcare Association (AzHHA).
“I think having that connection is really important,” Walz says. “It’s kind of a venue (for) when we have issues out in the rural areas.”

Speaking to the Legislature with AzHHA’s backing gives rural communities a louder voice that can compete with urban areas, he adds.

“(My job is) exciting to me in that we have a good medical staff, an excellent leadership team and some really committed employees,” Walz says. “(Yuma Regional) commits to the employees as well. We have a very good benefit plan. We stay competitive with the areas we have to recruit from … It’s a pretty exciting place to be and the board has a commitment to quality and patient safety.”

Arizona Business Magazine Sept/Oct 2010

money

Johnson Bank Closing 4 Offices In Arizona

Johnson Bank offices in Phoenix, Mesa Peoria and Rio Verde will close their doors on Jan. 8, 2011, it was announced today.

The closings come as a part of the bank’s plan “to maintain the health of the business in the midst of depressed economic conditions,” according to a company press release.

Arizona office closing are at 1850 N. Central Ave., in Phoenix; 1001 W. Southern Ave., in Mesa; 16155 N. 83rd Ave., in Peoria; and 18815 E. Four Peaks Blvd., in Rio Verde.

The bank has an additional five locations in Phoenix and Scottsdale that will remain open. Approximately 12 associates will be affected.

“These carefully planned branch consolidations will result in fewer locations, yet allow us to continue to provide good coverage of the Scottsdale and Phoenix areas and most importantly the same high level of service our clients are accustomed to,” said Russ Weyers, COO/incoming CEO. “We’re making the right decisions to remain a strong, long term financial partner for our clients.”

The banks will remain open until the closing date. Weyers said he expects the impact on clients to be minimal.

“Our client relationships are important to us, we appreciate their business and feel our five remaining full service financial services locations will continue to meet their needs,” Weyers.

Using Personally Owned Life Insurance - AZ Business Magazine June 2010

Using Personally Owned Life Insurance (POLI) As A Sinking Fund

Affluent families and individuals, successful business owners, and those engaged in certain occupations, such as the medical or construction industry, all face similar challenges when choosing to invest: They have worked hard to accumulate wealth, and now they want to keep it.

Wealthy investors are driven by the same concerns:
Preservation: Given the choice between risky strategies or preserving what they have, most affluent investors will choose to preserve what they have.

Liquidity: Without access to your money, wealth may not be maximized.

Protection from creditors and frivolous lawsuits: The legal risk posed to affluent investors in today’s society is extraordinary.

Control: Affluent investors value the flexibility that allows them to respond to changes in their personal and business lives.

Taxes: Although we can’t be certain that taxes will go up, the odds suggest they will — perhaps significantly so. Mitigating the bite of the tax man is a top priority for wealthy investors.

To address these concerns, affluent investors and their advisers have many investments to choose from, such as IRA and Roth IRAs, equities and mutual funds, tax-advantaged bonds, annuities and personally owned life insurance (POLI), to name a few. Each of these investments has advantages and disadvantages when addressing the concerns of affluent investors. But what is POLI? To answer this question, we need to look at life insurance in an entirely different way.

Getting the most out of your investment type
What if instead of shopping for the most death benefit for our premium payment dollars, we sought out the federal minimum required death benefit in our policy to keep our insurance costs low and our investment value high? What if we created a “sinking fund” by investing in personally owned life insurance to create a tax-advantaged retirement supplement plan, and much more?

People often don’t recognize the value of permanent life insurance as an asset in their portfolios. Cash value life insurance offers much more than simple death protection.

Consider the following asset characteristics:
Qualified plan and annuity assets, in addition to being included in the taxable estate of an owner, are also subject to income in respect of decedent (IRD) at death. Seventy percent is an estimate of the combined impact of estate and IRD taxes, as well as credits given in the high net-worth decedent’s estate. The number can be higher or lower depending on the applicable marginal brackets.

Death benefits of a life insurance policy are generally received income tax-free by the owner of the policy. In order to avoid estate inclusion, the death benefit must be received outside the estate, often by designating the “B” Trust as the contingent owner and beneficiary of a policy owned by a decedent. Certain types of split dollar and loan transactions used in conjunction with an irrevocable life insurance trust (ILIT) also can be used to exclude the death benefit from estate inclusion. These techniques may involve gift tax implications, such as using a portion of the annual gift tax exclusions.

The benefits of POLI
Structured properly, POLI allow unlimited contributions, tax-deferred accumulation, tax-free redistribution, tax-free withdrawals, total liquidity, no income or estate tax at death, and the possibility of asset protection. This is an extraordinary combination of benefits.

Put simply, when structured properly the investor retains control of all the assets in a POLI account, including the right to terminate the account and withdrawal of the cash value. There is nothing “irrevocable” about a properly structured POLI contract. POLI, when properly structured, allows for nearly unlimited withdrawals after the first year at rates between 1 percent and 0 percent.

Using POLI, unlimited after-tax deposits may be made by the investor to be deployed in the equity and fixed income markets in almost any combination. An additional benefit is that in many states, the assets in POLIs are creditor protected. Asset protection against the creditors of an insurance-based contract owner is a matter of state law. Some states offer no protection for annuities life insurance cash value, some offer some protection for a portion, and others offer complete protection (check with local counsel to determine the applicability of asset protection in a given jurisdiction). Finally, assets invested in POLI are removed from the investor’s estate, while still providing the investor control of the assets.

Life insurance: A cautionary note
Of course, federal tax law definition of “life insurance” limits your ability to pay certain high levels of premiums. In addition, if the cumulative premium payments exceed certain amounts specified under the Internal Revenue Code (IRC), your policy will become a Modified Endowment Contract (MEC). If your policy is a MEC, many benefits of POLI are removed.

An “optimized” life insurance policy involves several elements. First, the contract should pass one of two tests for the definition of life insurance, thus avoiding status as a MEC under IRC 72, which generally limits the amount of cash value or contributions relative to the amount of death benefit. To exceed these limits causes distributions to be taxable. Second, in order to avoid estate inclusions, the death benefit must be owned outside the estate.

These are highly sophisticated and complex investments, and you should discuss whether a POLI is right for you with a knowledgeable team of financial, legal and tax professionals.

Arizona Business Magazine June 2010

money, cash, hundred dollar bills

This Isn’t the First Crisis The Valley’s Banking Industry Has Faced

The Valley has come a long way over the past 25 years, and the banking and financial sector is no exception. Challenges, crises and legislation brought about dramatic change that has created a new era in banking and finance. In the mid-80s local banks dominated the sector, while regional and national banks were nonexistent. The Valley was home to the “big three” — Valley National, First Interstate Bank of Arizona and The Arizona Bank.

The financial sector was real estate driven, with a considerable concentration in housing and commercial real estate development. Second to real estate were the “Five C’s” of Arizona’s economy: climate, cotton, citrus, cattle and copper.

The savings and loan and real estate crises of the late-80s were the turning point in the Valley’s banking sector. At a time when Arizona’s “big three” were suffering, large banking corporations invaded. Bank of America’s first “real” presence in the Valley was assimilating five different savings and loans in the state.

In summary, there have been many milestones over the past 25 years that have shaped the banking sector. Such milestones include sustaining itself through the S&L crisis and the severe commercial real estate downturn of the late-80s; recovering from the infamous Lincoln Savings and American Continental debacle; weathering the “dot-com” implosion of 2000; and passing the Interstate Banking Act that led to dramatic industry consolidation of local banks into regional, national and global banking organizations. More recently, the securitization boom in both the residential and commercial real estate market revolutionized real estate lending.

Today’s “big three” — Chase, Wells Fargo and Bank of America — control the vast majority of deposits statewide and a much more dramatic concentration of banking resources overall. But more importantly, small and mid-size banks have reemerged. 
There is also now more proactive leadership in the business community.

Arizona and the Valley have a more diverse economic base due to the dramatic progress of our investment in education, as well as the high-tech, defense, life sciences, health care, biotech, telecom, optics, hospitality, entertainment and transportation industries. We now have an “alignment” of stakeholders, including the public, business, academic and philanthropic sectors, and therefore stronger initiatives for more diverse economic development, such as sustainable systems, solar and renewable energy and land management.

That said, in 2009 we are again faced with many economic challenges that will no doubt continue to shape our industry and affect how we operate. Banks need to grow wiser and smarter in serving their communities and Arizona’s businesses. We are resource constrained from a state revenue standpoint and by expenditures driven by our phenomenal population growth and federal-mandated programs. Arizona is a high-growth state and we need to strike the right balance between infrastructure “catch-up” and smart and balanced growth. The banking industry has and will continue to support a more knowledge-based and service-oriented economy.

What does the future hold for the banking and financial sector? Banks will need to play a transformational leadership role in public issues, specifically economic diversification and development, as well as public finance. The industry must become a recognized leader for innovative approaches to capital formation and connecting intellectual capital with financial capital.

We must also promote a diverse array of financial institutions from small local community banks and mid-size niche banks to larger regional and global institutions that promote cross-border trade finance and strategic alliances.

There is no doubt that the next 25 years will bring as many challenges and reforms as we have overcome in the past, but our state’s banks will regain their strength; the strong will survive, consolidate the weak and prosper with our state’s growth. And as Arizona’s banking industry continues to grow stronger and smarter, we foster confidence as we reaffirm the leadership role in Arizona’s economic foundation.

A New Study Provides Lessons On Enhancing Hospital Board Effectiveness

A New Study Provides Lessons On Enhancing Hospital Board Effectiveness

It’s no secret that nonprofit hospitals, which account for the majority of hospitals in the U.S., are under growing scrutiny from legislators and regulators. In exchange for being exempt from paying taxes, nonprofit hospitals must provide benefits to their communities, including charity care. As health care reform efforts are beginning to get underway, an increasing emphasis has been placed on tax-exempt hospitals, and legislators are questioning the level of benefits actually provided to the local communities. At the core of this debate is how these hospitals are governed. Consequently, effective health care governance has never been more important.

So, what should health care systems be doing to maximize governance effectiveness? And what can these organizations learn from the governance practices of the most-effective community health systems?

According to a recent study, “Governance in High-Performing Community Health Systems: A report of trustee and CEO views,” which Grant Thornton co-sponsored in collaboration with the University of Iowa, College of Public Health and the American Hospital Association, there are a number of important lessons to consider. The study examines the governance of community health systems based on feedback from 123 hospital CEOs, and follow-up visits and onsite interviews with CEOs and trustees of 10 “high-performing” systems. The “high-performing” systems were selected from a set of performance and governance metrics.

Six principal factors emerged from the study as critical to effective governance at high-performing systems:

Strong values-based CEO leadership and effective management teams
Effective CEO leadership is vital to achieving and maintaining a high level of health system operating performance. Among the specific attributes mentioned by interviewees were a commitment to the system’s mission and values, excellent communication and relationships with the board and medical staff, expertise in financial management and cost controls, a passion for improving the system and its patient care, and strategic vision. They also cited the importance of a strong, effective management team with expertise in the full range of management functions.

Well understood systemwide mission, vision and values
Interviewees emphasized that key internal and external stakeholder groups must understand and support a meaningful systemwide mission statement, a compelling vision for the system’s future and a clearly stated set of core values. These expressions of organizational mission, vision and values can be powerful in unifying the stakeholders and galvanizing energy toward established goals and standards, but only if they are consistently reinforced by organizational leaders throughout the system. Interviewees also recognized that building the understanding and support of key constituencies within the system, and in the communities the system serves, requires continuous attention by the board and management.

A highly committed and engaged board of directors
Trustees commented that a highly committed, well informed and proactive governing board is extremely important to achieving and maintaining organizational success. The board should work collaboratively with the CEO and physician leadership. In addition, many board members stressed the importance of well organized and staffed board committees, the leadership role of the board chairperson and a mutually supportive relationship between the board chair and the CEO. They also noted the need for trust-based relationship between the board of directors and its CEO.

Strong clinical leadership and capabilities
The majority of interviewees underscored the need for committed, competent clinicians as a critical determinant of operational performance. They commented that without strong physician leadership, no hospital or health system can achieve enduring success. A number of interviewees also noted the importance of excellent nursing leadership. Also critical were strong, mutually beneficial partnerships between the system and physicians.

Clearly defined organizational objectives, targets and metrics
Interviewees stressed the importance of working toward well defined organizational targets and evidence-based metrics. These enable the board, management team and clinical leadership to monitor actual performance in relation to established standards in key aspects of system operations. Metrics should include the health systems’ community benefit program, financial performance and quality of patient care.

Healthy organizational culture
Interviewees frequently mentioned the importance of organizational culture. They commented that the prevailing culture within their systems included broad-based commitment to excellence in patient care and operating performance.

In addition to the importance of these six factors, there is ample room for improving board performance, particularly related to boardroom culture, board evaluations and community benefit programs. We recommend the following:

Devote time and energy to serious reflection and dialogue about the board’s fundamental role, responsibilities and the overall caliber of its performance in recent years. Then, develop a concrete strategy for creating a better, more proactive and more effective board.

Reexamine the organization’s current board size and composition. Consider adding greater racial and gender diversity, as well as respected and experienced nursing leaders as voting members. Keep in mind that large boards can be unwieldy; nine to 17 members is considered ideal.

Take a hard look at existing board-development programs. On that basis, adopt a strong commitment and a concrete plan for improving them.

Initiate an overall review of the present board evaluation process. Objectively assess the value it has provided for the organization and determine how to improve its effectiveness. Board evaluation must not be a pro forma exercise with minimal value.

Give careful attention to the boardroom culture and determine steps to make it healthier and more effective. Board members must feel free to express their views and constructively challenge each other and the system’s management team. Directors should actively engage in discourse and decision-making.

Devote attention and resources to meeting emerging benchmarks of good governance for community benefit responsibilities. Establish formal measurable policies and measurable objectives for community benefit plans, with regular reporting on the achievement of those objectives. It’s also important to collaborate with other organizations in ongoing community needs assessment and to provide thorough reports to the communities served regularly at least once per year.

Current and emerging benchmarks of good governance for nonprofit hospitals and health systems should be reviewed, refined and compiled into authoritative, consolidated documents to provide guidance for trustees and CEOs as they strive to meet these benchmarks.

With growing attention from the IRS, Congress and the media, forward-looking health care organizations are taking steps to examine their governance and identify opportunities to strengthen it. Organizations that are committed to continuous improvement not only will enhance their performance, but also improve their systems’ contributions to the communities they serve. The time has never been better to apply these lessons learned.

Arizona State Seal

A Quarter Century Of Wisdom Points To The Right Solution

In 1982, I was beginning my first term in Arizona’s House of Representatives. After years of spending increases, our state was suffering an economic slowdown. Recovery was just around the corner.

In 1984, Ronald Reagan was elected to his second term as president of the United States, the federal government announced that it would build an orbiting space station, and the Phoenix area was one year away from receiving its first deliveries of Central Arizona Project water.

In other words, the more things change, the more they stay the same.

Yes, we are a different state today than we were a quarter century ago.

Our population has doubled from 3.06 million to 6.8 million.

Per capita income has risen 256 percent, from $13,866 in 1984 to $32,953 today.

The world may be suffering the symptoms of an under-the-weather economy, but citizens from high-tax and high-regulation states will continue to move to Arizona, just as they have for the past 25 years. They will come because of our freedom-loving attitudes, our incredible business and environmental climate, and a commitment to nurturing opportunity.

However, since we have ignored history over the past few years, we must re-live the lessons of previous cycles. Once again, after stumbling through several years of free-spending fostered by a previous administration, Arizona must bring spending back to reality.

This is why I offer a five-point plan to cure what ails us:

  • Cut spending as much as feasible.
  • Don’t create or expand programs.
  • Stop treating one-time windfalls as permanent revenue. Even the feds must stop printing money eventually, so don’t think cash will keep flowing out of Washington.
  • Modernize our tax structure. Let’s get spending under control by 2012. Then let’s renovate our tax system to foster well-paying, sustainable jobs.
  • We must be responsible. The previous administration spent too much, and we must pay the bills, even if it leads to temporary tax hikes that automatically expire in three-to-four years.

Some think our political climate has changed. To those people I say, the more things change, the more we need the wisdom of some of the best political minds from the 20th century: Ronald Reagan and Barry Goldwater. They advocated:

  • Keeping taxes reasonable.
  • Limiting government intrusion.
  • Encouraging opportunity.
  • Creating prosperity.

Back in 1984-85, for the first time in state history, Arizona officially became a Republican state. We tended to elect conservative Republicans for decades, but many rural and blue-collar Democrats re-registered and pushed my party over the top.

When I became secretary of state in 1998, I watched a national trend away from political affiliation, which made it look like GOP domination would erode. As of April 1, 2009, our 3.1 million registered voters were split into three semi-equal groups. About 36.8 percent are Republicans, 33.8 percent registered as Democrats and 28.5 percent are not affiliated with either party.

Voters may be disenchanted with both parties, but they still love freedom, want limited government intrusion in their lives, and place their faith in the wisdom of Reagan and Goldwater.

The evidence is clear that Arizonans remain as committed as ever to limited government. This is why, come 2010, I am confident that our state will continue to follow the path blazed by Reagan and Goldwater by trusting sustainable, conservative solutions that realistically and responsibly address Arizona’s financial crisis.

Wall street bull

Volatility Can Be A Portfolio’s Greatest Threat

The up-and-down swings of the markets are giving everybody vertigo. Yet most people fail to understand how critical it is to minimize the volatility within their investments. Besides getting a better night’s sleep, there are sound mathematical reasons. Most people are astounded to learn that they can actually earn a lesser rate of return with a portfolio with reduced volatility, and yet end up with more money left to spend. Although some may find this counterintuitive, this is the message financial advisers should be emphasizing to their clients.

It is essential to use strategies that protect your principal, minimize losses and reduce volatility. Did you know that if your investments are down 40 percent, you will have to earn 67 percent to get back to even? Worse yet, if your investments go down 60 percent, you need a return of 150 percent just to break even.

Historically, with previous downturns it has taken years for investors to recover their losses to get back to even. For example, from the start of the downturn in 1929 (which lasted 10 years), it took the stock market 25 years to crawl back to break even. It took seven-and-a-half years from the start of the 1972 bear market, and more than five years from the March 2000 high for values to creep back to break even. The more volatile the investment, the larger the potential problem.

So how can you mitigate risk and reduce volatility in your investments?
Diversification — It’s a time-honored strategy. However, most people are shocked to discover that despite all the various investments and different mutual funds they might own, after doing an “overlap for duplication” analysis, they uncover surprisingly large amounts of investment replication.

Proper asset allocation — This involves placing investments in a mixture of different asset categories, including U.S. and international, large cap and small cap, value and growth, emerging markets, as well as various types of bonds. Typically, a portfolio having 12 to 20 asset classes is considered well positioned. However, following last year’s “perfect storm,” almost every asset class was down, including most types of bonds (typically a safe haven during turbulent times).

Investments with upside potential and principal protection — Structured notes can provide principal protection, while simultaneously providing the upside of a particular index. On a related front, there are “fixed index” annuities. Although an alternative, I generally find the insurance company’s “trust me” position difficult to accept, especially their “black box” philosophies. Although you could always move your funds elsewhere, the high and oftentimes long-term surrender charges tend to lock you in for 10 to 18 years.

Guaranteed growth and income riders — When offered on “variable” and “fixed index” annuities they can provide a safety net to override actual account losses. One needs to be sure to navigate the various rules, understand there may not be a legacy to leave behind, as well as take the oftentimes high and long-term surrender fees into consideration. However, in the right circumstances, this strategy can make sense.

Multiple strategy investments — These did the best over the last 20 months, in addition to having a respectable long-term track record. Investments of this type vary between aggressive to conservative, and include hedge funds, managed futures, commodities, PIPEs (private investment in public entities), private equity, senior debt, etc. The “buy in” on these types of investments can be a drawback, as many are not available unless your investment account is $1 million or larger, as they can require a certain investment minimum or certain investor qualification.

Overlaying an “advance and protect” strategy — This is essential to help preserve principal, as well as help lock in gains. Although there are no perfect systems or guarantees, for most advisers utilizing this type of approach, it has delivered meaningful results and peace of mind for their clients.

We are experiencing what is being described as “a deer-in-the-headlights” market. The questions on many people’s minds today are “What should I do now? Should I stay the course and wait for things to come back? Or should I change strategies or possibly even my adviser?”

One should consider that not all investments come roaring back. Although the S&P 500 got back to even in May 2005, other investments performed less well. For example, the Nasdaq is still 63 percent underwater — more than nine years after reaching its high in March 2000.

A recent article in the Wall Street Journal commented on the results of an investor survey:
81 percent of the investors stated they were contemplating or in the process of changing their financial advisers.

90 percent of the investors with “brand named” firms planned to move some of their money; 70 percent planned to move it all.

86 percent of those planning to change were so upset, they recommended others avoid their current adviser.

No one can control the risk and volatility of the markets, so unless one thinks they can do it themselves, it is crucial to work with an adviser who understands how critical it is to reduce investment volatility in order to lessen a portfolio’s exposure to risk. Done correctly, reducing volatility should provide more consistent returns and dependable growth, and ultimately provide more income and a greater end value in your retirement years.

We are in very interesting times, and many people are now realizing they are in trouble. One does not need just any financial planner, but rather a true, unbiased professional adviser who can help guide them through the treacherous waters investors will undoubtedly have to continue to navigate. The decisions being made today could very well have a lasting impact on the rest of your financial life — so make them wisely.

shattered glass

Wealth Managers Can Diagnose And Treat Battered Financial Confidence

If the past several quarters have taught us anything about wealth management, it’s the importance of routine maintenance, diagnosis and treatment of our portfolios — even if they are ailing. Much like the consistent faith we place in our doctors for our health, so too must we place trust in our wealth management advisory teams.

Oftentimes, it is the most difficult periods that strain our trust and twist our thoughts. When managing your wealth, don’t let fear or uncertainty guide you. Wealth management is not a product, or even a series of products, but a long-term strategic approach to assisting clients through comprehensive planning, solutions and personalized service.

Just as you wouldn’t seek a dermatologist for a kidney ailment, your selection of a wealth management clinician should be based on a long-standing track record of success in certain specializations. Similarly, seek financial institutions with strong, proven stability and those that are regulated and monitored by federal oversight agencies. Finally, successful wealth management relies on the integration of banking, financial planning and investment management with professionals on client-focused teams working together to develop and implement the strategies clients need to meet their goals.

Bad economy, good opportunities
The past six months have prompted fearful retreats to the sidelines when it comes to managing portfolios. Like ignoring a persistent cough, simply brushing the problem aside will lead to further difficulty down the road. The toughest economic times often provide the biggest opportunities, but a bold and confident approach is required. A back-to-basics approach that examines the variability of returns by asset class — a long-trusted wealth management strategy — can be best suited for those who have lost confidence in their portfolio management.

Wealth management as a field has changed rapidly over the past decade. The advents of technology, the integration of a global economy and a better-educated investor have caused an evolution in the industry. The recent economic crisis simply highlighted this new reality. It also illustrates why your wealth management team should consist of those with differing areas of expertise. There are several upside factors to working with larger, established wealth management institutions. Besides a strong track record of success and regulatory oversight by the U.S. government, larger networks of wealth managers offer precise insight on how to best manage your money.

Ask questions such as: Should I invest in foreign markets? What are the best times to buy commodities and what kinds? How much cash should my portfolio have?

While one wealth management adviser can answer these questions broadly, the better analysis and decisions will come from members of your team who are experts in each sector of investment and have access to the latest, most up-to-date analytics and data.

Assessing your goals
Another key element to assess — and this is truer today than ever before — is your risk tolerance. This answer doesn’t come easily, but ask yourself a few key questions: When do I want to retire? What is my desired quality of life during retirement? What kind of estate am I planning to leave for my children and family?
By educating yourself on your expectations, you can clearly report your needs and desires to your wealth management team and, in turn, they can come up with various strategies and tactics for your portfolio.

Also, expect these goals to change. An investor just starting a family is in a far different financial place than an executive in his 50s and vice versa. Your wealth management team must fluidly advise you on what your portfolio should look like at different phases of your life. A trusted adviser and a seasoned plan is needed for every stage of the wealth management cycle: accumulation, growth, transfer and preservation.

Much like that patient/doctor relationship, education is paramount. Good physicians lay out clear, professional advice on the best way to care for your health. The best doctors will also advise you to seek second and third opinions. You should do no less with your portfolio.After all, you’ve worked hard to build a healthy portfolio.

For me, wealth management has been nearly a four-decade process of learning and building relationships with my clients. They trust me much like they trust their doctor. It’s a cycle of service that continues to evolve. As you would with your health, use the expertise of your most trusted confidants to help lead your decision making — it will pay off in the long run by keeping you healthy, wealthy and wise.

software

Failing To Honor Copyrights On Software Could Cost Company Thousands

If you use software in your business, a little knowledge about an often misunderstood area of the law could save you tens and possibly hundreds of thousands of dollars. The area of the law is copyrights — but don’t stop reading just because you know you would never illegally copyright software. I have had many clients come to me faced with serious financial sanctions who thought they did nothing wrong.

Perhaps you have never heard of the Business Software Alliance. You are lucky. If you don’t have written agreements with your employees about computer usage, you need to reconsider. And if you have no interest in reading that long license agreement before you click “accept” … well I can’t blame you, but you should at least read it before you make any extra copies of the program.

Let’s start with the basics. Microsoft owns the copyright on Word, Auto Desk owns the copyright on AutoCAD, and Adobe owns the copyright on Acrobat. If you “bought” any of those programs or any other software, you really only licensed them. Whether you bought a CD in the store, downloaded it from the Internet for “free” or it came bundled on your new computer, your use is subject to whatever conditions the copyright owner wishes to impose. If you exceed your permission, then you are violating the copyright. Another basic — you are responsible for the actions of your employees, even if you did not know they were violating the copyright law.

Now let’s discuss a few common myths. Each of the following statements is absolutely false: (1) I can make extra copies for my own use as long as I don’t give or sell them to third parties; (2) I don’t use that computer anymore, so I can just copy the program onto the computer that I do use; (3) it was free on the Internet so it is in the public domain; and (4) they are not interested in going after a small company like mine.

The only way to really know whether an archive copy is permitted or how many different computers you can legally load the software onto is to read the terms of the license that you accepted when you downloaded or installed the software. Don’t assume. Don’t rely on the representative who sold it to you and don’t rely on your tech person. In almost every instance where one of my business clients was accused of copyright infringement, the business assumed or believed that the extra copies were permitted.

Finally, let’s discuss the myth that your business is too small to attract attention and why you should familiarize yourself with the Business Software Alliance (BSA). The BSA is a trade association for copyright owners and it has one purpose — the protection of the copyrights of its members. Its members range from big players like Adobe and AutoCAD to smaller software companies. By turning these enforcement issues over to the BSA, the companies can focus on what they do best — write and develop software. What the BSA does best is locate, negotiate with, and sue infringers. A popular source of information for the BSA is disgruntled former employees. The BSA periodically runs advertisements offering rewards for information. No case is too small and no business is too small for the BSA. Also, the BSA’s idea of negotiation is to slightly discount the full damages. Since copyright laws provide for statutory damages of up to $150,000 per infringement, plus attorney fees, the exposure is significant and the alternative to accepting their proposals is daunting.

With just a few preventative measures, you can protect your business. First, educate your employees on the dangers of unauthorized copying and implement written policies and contracts that prohibit or provide a protocol for any software downloads or copies. By having appropriate policies, you may decrease the amount of damages that can be claimed against you. You will still be responsible for your employees’ conduct so it is important to educate and re-educate your employees on the importance of following the policy.

Another preventative measure is to review your current software and licenses. Un-install any extra copies that are not authorized. When you add a new computer, do not install any software from previous computers without reading the license provisions and determining whether the new install is authorized.

Most importantly, treat copyright protected intangible property such as computer software like you would treat tangible property such as fixtures and equipment. Teach your employees to do the same. You wouldn’t steal or even borrow your neighbor’s car without permission. Respect the intangible property of others in the same way and you are far less likely to find yourself on the wrong side of a copyright infringement claim.

Small Businesses getting help in down economy

Despite Weak Economy, Credit Unions Are Providing Financial Assistance To Small Businesses

When talking about credit unions and business loans, the key word is small. The percentage of business loans to credit union assets nationally is about 2 percent; business loans in Arizona average about $240,000, compared to $180,000 nationally. And because the loans are relatively small, the focus is on small businesses. Federal law caps credit union business loans at 12.25 percent of total assets.

“With business loans hovering at around 2 percent, it tells you that a lot of credit unions are not doing business loans. But they have plenty of room to assist businesses,” says Scott Earl, CEO of the Arizona Credit Union League and Affiliates.

One of the reasons that a majority of credit unions, especially smaller ones, don’t dabble in business lending is because of the level of expertise required.

“You need to be fairly sophisticated,” Earl says. “Traditionally, larger credit unions have the ability and staff support to make business loans.”

Of course, not all business loans require a lot of sophistication. Perhaps a teacher has a summer job doing yard work and needs a trailer to haul things around. In fact, many of the loans go to sole proprietors, and some involve small-business owners who were turned down by a bank.

“We hear stories like that all the time,” Earl says, “and not because of economic conditions.”
Traditionally, a credit union gets involved in business loans because some loans are too small for the average bank — not worthy of their time and effort. That’s probably a bigger issue during an economic boom, Earl says.

“We’re making business loans. You hear about banks pulling out of business lending. But we have not done that,” says Mark Olague, assistant vice president of business lending for Desert Schools Credit Union.

He tells of a business prospect who had a construction loan with a bank and was having difficulty getting timely advances. Not only did the credit union make the construction loan, refinancing was approved for commercial loans on several of the client’s other Phoenix area properties, as well.

“We were able to step up and do the construction loan for that small business, making our member happy,” Olague says. “The key regarding the credit union world is that not only are we here to service business loans, we’re looking for relationships. We are relationship-oriented.”

In addition to providing an attractive interest rate on a business loan, credit unions offer such services as a checking account, credit card options for sales and purchases, and a 401(k).
“We’re like a one-stop shop,”

Olague says. “We can make loans for an overdraft line of credit for as small as $2,000 or for the purchase of a business vehicle for $30,000 to $40,000. Generally our footprint is from $25,000 to $2 million.”
Desert Schools’ business members generally seek loans for purchasing a fixed asset to start a new business.

“We’re not entertaining startups,” Olague says. “Normally, we’re looking at businesses that have been in existence for at least two years.”

All, however, is not rosy among credit union business members. A few have had bankruptcy issues and cash flow difficulties.

“We’re here for them in good times and bad times,” Olague says. “We may modify their loan to make payments easier for the interim.”

At First Credit Union, which has been making business loans for four years, Joe Guyton, senior vice president of credit, says he’s not seeing startups like he did a year earlier.

“The economy is clearly having a big impact on the capital needs of beginning a business,” Guyton says.

“There are not many people out there with the confidence to start a business. Our business members are coming in to maintain their borrowing relationship. They are concerned about losing that relationship. The amount of inquiries regarding new projects has almost dried up — anything with construction dollars on it.”

Although some business members have filed for bankruptcy, because First Credit Union is relatively new to business lending, the impact on it is considerably less than it would be on a major bank, Guyton says. Fewer than 1 percent of the credit union’s 60,000 members are businesses.

“We’re in a good position to continue to help them,” he says.
Michael Hollar, vice president of business financial services for Arizona Central Credit Union, says most of his business members are struggling. Last year, when gas prices skyrocketed, business members making deliveries took a huge hit. They were looking for alternate sources of fuel and were not seeking loans to buy new vehicles. They repaired what they had.

“A few of the savvy ones, when interest rates started dropping on the real estate side, came in to refi a loan with lower rates,” Hollar says. “We accommodated most of them. We charged a fee, but they were OK with that, rather than staying with the same payments.”

The volume of loan requests dropped considerably during the last three-to-four months of 2008. There were a few startups, mainly from people who had been laid off and were trying to go into business for themselves.

“In this environment, there is very little interest in businesses buying a new piece of equipment or looking for a building,” Hollar says. “They’re hunkering down to ride out the storm, hoping that 2009 brings a brighter day.”

Mixed Use Development

Mixed-Use Developers Urged To Plan For Defect Claims Before Signing Contract

Developers of mixed-use projects can reduce the likelihood of costly construction defect litigation by anticipating risk and allocating responsibility at the time of contract. Unfortunately, developers often assume that the standard industry forms provide sufficient protection.

These forms, however, rely heavily on good faith for resolution of issues in the future. There are certain approaches developers can take to protect them, prevent construction defects and resolve issues arising from them.

Determine project function and likely defects prior to contract
The developer’s contracts with contractors and designers are best structured after the developer has arrived at a clear “big picture” understanding of how the project will function. Gaining this understanding includes consideration of regulations, financing, insurance and marketing plans specific to the development. It would behoove the developer to conduct a “what if” analysis to determine the defects most likely to result from failures in the design or construction.

Knowing how the project will function and what defects are most likely to arise places the developer in the best position to craft project-specific core objectives for negotiation of the contract.

These core objectives related to defects should include:
A clear allocation of responsibility and accountability for preventing critical defects.

A determination of comprehensive insurance and bonding requirements based on an assessment of which risks can and should be covered.
A clear statement of how disputes will be triggered and resolved during and after completion of the project.

Resolution of disputes deserves particular attention given the implications of technical issues and the possible need to involve numerous categories of potentially responsible parties. The solution will differ from project to project.

Beware of the economic loss rule
Developers sued for construction defects invariably look to the designers and contractors for indemnification. If the designer or contractor is not held financially responsible however, the developer may remain on the hook even if subcontractors are truly at fault. Subcontractors can be immune from liability for construction defects under a principle known as the “economic loss rule,” which provides that a party whose claim is based upon a financial loss caused by construction defects is only entitled to recover under contract theories against those with whom it has a direct agreement. To the extent the economic loss rule applies, it prevents the developer from suing the responsible subcontractor, unless the subcontract provides otherwise.

Developers concerned about the economic loss rule typically require in the prime contract that each subcontract include text specifically indemnifying the developer from suits for construction defects caused by the subcontractor, and names the developer as an “intended third-party beneficiary” of the subcontract with the right to directly sue the subcontractor.

Require indemnification and defense
Developers typically do not cause construction defects, and assume the insurance furnished by the designer or contractor should be the primary source of payment for all related costs, including defense costs. Yet, under the standard industry form indemnity, the primary responsible party does not provide for defense. To address this gap, developers can explicitly require a defense obligation in addition to indemnity.

Nip the issue of warranty claims in the bud
There is the potential for confusion and discord in efficiently responding to warranty claims, given there will likely be multiple parties potentially responsible for the design and construction. Developers concerned with this concept should negotiate contract provisions for a “warranty response contractor” to ensure warranty/defect claims from third-parties are responded to and accommodated promptly, with allocation of responsibility being addressed later.

If the developer envisions the project to be above average in quality of design or construction — which is normally the case in upper-end developments where quality of construction administration is considered important to minimizing defects — the contract should memorialize that expectation. Otherwise, the enforceable measure of performance could be the minimum standard, which may make it more difficult for the developer to prove a breach of the standard of care and increase the likelihood of defects due to lower performance standards. To avoid disputes, the contract should reflect any understanding that performance will exceed minimum standards.

Contractual language dealing with any or all of these concepts is only as effective as the effort given to integrate them with the other contract provisions, as well as the core objectives, so that the entire contract clearly addresses the parties’ expectations for the specific project.