With uncertainty in financial markets, it’s time to turn back to insurance and estate planning, focused strategy, and fundamental financial planning.

With the recent volatility in financial markets, there is a sudden rush to return to traditional, perhaps “safe” investments. And it’s a good time to revisit your estate planning.

Our investment portfolios have dropped significantly in 2022 and, for many of us, our confidence in the financial markets remains uncertain. We know historically that “markets” have performed and provided us a stable way to systematically invest, with assurance that over time our assets will grow.

Hopefully, we are also reallocating our investments to reflect our risk tolerance as well as our need for liquidity as we age and consider retirement

There seems to be a renewed interest in certainty, in products like annuities and insurance, things that provide guarantees to families and to our retirement incomes, especially should the markets not return to some level of stability. Investors have returned to annuities and T-bills for certain investment returns—trading volatility for certainty—strategies not seen since the 2008 financial crisis. In short, people want to sleep at night!

Interest in life insurance has also suddenly skyrocketed, with people understanding that a reduction in their assets means fewer assets for heirs should they die prematurely.

Makes sense—with news reporting war, global and weather-related disasters, shootings and random killings, escalating crime (and even with the era of COVID potentially in our rearview mirror), we have all suddenly come face to face with events that bring us in direct view of our mortality. As Jim Morrison said, “No one here gets out alive.”

When was the last time you actually reviewed and contemplated the economic needs of your family or business, if you died tomorrow? What plans would you want to have in place if your ability to buy life insurance changed tomorrow?

Most people buy a term life policy, “set and forget it.” Maybe a million dollars isn’t what it was years ago. Surely it doesn’t last as long as it did. In fact, I’ll argue that most of us are under insured. By a LOT.

There are assets, and then there is liquidity. Life insurance brings liquidity to situations at the exact right time.

Life insurance brings money to families who many times have lots of assets, but don’t have liquidity. Most people but term insurance; they set it and forget it.

The problem with these TERM insurance policies is that they are most likely to expire way before you do. Policies don’t get updated or refinanced. Then WHAM, you’re too old to requalify. Or its too costly.

If you’re someone who hasn’t revisited your life insurance policies in the last several years. this is the right time. Term life insurance rates are at an all time low—and there are NEW types of term policies, policies that “spring to life” and can pay for things like long-term care if you need money while you’re alive. (Your current policy likely doesn’t do this.)

Life insurance can be a tool to transfer wealth, preserve assets, and make sure that all those special events (like weddings, home purchases, retirements, and grandchildren) get something special and create legacies.

With the cost of life insurance being at an all-time low and underwriters seeking year-end revenue this is an extremely good time for you to be revisiting your life insurance portfolios.

People who plan are always more successful than those who fail to plan, or those whose plan is simply “whatever.” What’s your plan?

Martin Levy, CLU/RHU is founder of Corporate Strategies Inc./CorpStrat, located in Woodland Hills, Calif. A 30-year insurance industry veteran and Lifetime Member of the Million Dollar Round Table, Levy is an expert in long-term care planning strategies. (818) 468-0862, [email protected]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

The Chinese Communist Party has planted over 100 million recording devices under our noses. This new technology is recording your face, your voice, and your daily routine. It can hack computers or iPads located in a 5-foot radius and send valuable data back to Beijing.

If you spent any time today in a train, grocery store, or crowded café, you passed by somebody carrying this device.You won’t have noticed them. They might even have been a child. If you are the parent of a teenager, chances are this device has already made its way into your home. Its name is TikTok.

These staggering revelations entered the public record earlier this month, when a court settlement in Illinois awarded nearly $100 million to victims of flagrant data theft and privacy violation. In addition to exposing repeated lies by TikTok about the extent of its overreach, the court documents revealed in no uncertain terms the recipient of this enormous quantity of stolen information: the Chinese Communist Party (CCP).

Americans recognize China as our greatest enemy, yet TikTok usage among children continues to grow. While questions have been raised previously about this app’s affect on teenagers’ study habits, body image, and mental health, new revelations paint a sinister picture: TikTok is a weapon of war, insidious and dangerous like no weapon our country has ever faced. Problem is, nobody wants to do anything about it.

Last week, Federal Communications Commissioner Brendan Carr recommended that President Biden and the Council on Foreign Investment in the U.S. (CFIUS) ban TikTok once and for all. The commissioner, who previously urged Apple and Google to remove the app from their stores, spoke out following this new round of revelations concerning data access by parent company ByteDance, a Beijing tech corporation with a close relationship to the CCP.

Currently, the Biden administration is moving forward with a deal they believe can protect the data of TikTok users, but repeated privacy violations by ByteDance prove that these measures are not sufficient. In addition to Carr, officials within the Departments of Justice and Treasury have expressed concern that this deal could allow China to continue to use TikTok for surveillance.

While attempts to prohibit the app fizzled in 2020, the need for a TikTok ban has never been so clear. China is using this app as a backdoor to surveil, infiltrate, and manipulate the lives of more than 100 million Americans. Its capacity for surveillance is so far-reaching that TikTok can even access classified materials from devices that have never installed the app. The new evidence out of Illinois, along with even more proof of espionage discovered by Apple, means that a ban is no longer a discussion but an inevitability.

We can no longer doubt that a child’s favorite video platform is responsible for the greatest intelligence leak to a hostile foreign power seen in our lifetimes. Rather than attempt to bail us out with diplomatic half-measures, President Biden should use CFIUS to eliminate this weapon and plug the leak at its source.

Such a ban may require bipartisan cooperation, and threatens Democrats’ popularity among teens. Yet the only alternative is ceding the most important cybersecurity decision of our lifetimes to Republicans.

THE PEOPLE BEHIND THE APP

It’s like something out of a science fiction movie. Tens of millions of Americans have been seduced by viral pet videos and seven-second dance tutorials to download a free new software, unaware of its dark secret: The app is free because its users are the product, and the buyer is the CCP.

Ideally, a video platform such as TikTok would allow creators from across the world to express themselves without fear of government censorship or surveillance. As co-founder of Triller, I have seen the ways that short-form video content can promote understand and bring people together. Instead, the video landscape is dominated by a dishonest and dangerous software that seeks to exploit its users, who are often the youngest and most vulnerable members of our society.

Today’s teenagers watch more TikTok than YouTube. Yet the newer app is particularly aggressive in its collection of user data, and owned by a shadowy corporation that answers to the Chinese government and the CCP. All TikTok users are introducing into their homes a Trojan horse that can access any device in its range. Our politicians are fully aware of this fact, and President Biden has recently increased efforts to limit Chinese influence in the microchip market. This week, the German government followed suit. Ending TikTok should be next.

Though a ban may provoke some outcry from its users, taking such a dangerous weapon out of the hands of the CCP must take precedence over the risk of seeming “uncool.” For any who doubt the true purpose of this app, look no further than the history of parent company ByteDance.

Created in 2012, ByteDance has rapidly risen to the forefront of the Chinese tech world, with an annual revenue of $34.3 billion and close to 2 billion active users. The rise of ByteDance has been nothing short of meteoric, and can largely be attributed to two entrepreneurs with close ties to the CCP: tech mogul Zhang Yiming and financier Neil Shen.

An engineer who cut his teeth at Microsoft, Zhang created his company with the intent of serving as a preeminent aggregator of user data. That’s right: The users were always the product. After launching a news service and a meme-sharing app (an early probe into teen audiences), ByteDance ventured into the world of video content with the launch of Douyin, a popular Chinese-language service very similar to TikTok.

Since the start, Zhang set his sights on the global market. The success of Douyin allowed ByteDance to purchase lip-sync app Musical.ly, a rival Chinese product with a young and international userbase. Rather than merge the two Chinese apps together, ByteDance kept Douyin exclusive to the Chinese market and rebranded Musical.ly as TikTok, gaining access to a massive new market for overseas user data.

At first glance, the two apps appear identical. However, the Chinese version is stored on separate servers and has far stricter rules of content moderation. Most importantly, only TikTok uses state-of-the-art technologies to track its users and keep them addicted to short-form content. As noted in a 60 Minutes segment earlier this week, it is revealing that China prohibits TikTok in their own country while pushing it to the children of their international rivals.

Zhang claims to not be a card-carrying member of the CCP. However, he was recognized as a de facto Beijing spokesman in a 2020 filing by the Department of Justice (DOJ). DOJ lawyers demonstrated the ways Zhang has repeatedly promoted the CCP agenda: In 2018, before the rise of TikTok, he even made a public show of submission after one of his other apps was accused of violating “socialist core values.”

Despite its creation by this identified CCP ally, TikTok is based here in Los Angeles and presents itself as partially American-owned. This is a charade. The truth can be exposed with a quick look at the man behind the financial curtain: Neil Shen.

Founder and manager of Sequoia China, the primary shareholder in ByteDance, Shen uses this venture capital firm’s affiliation with its San Francisco parent company to conceal his ties to the CCP. Sequoia China has received direct funding from party entities such as the Chinese Academy of Sciences. Any claims of American ownership are farcical.

Much like his partner, Zhang, Shen is an essential part of the CCP strategy to influence the tech sector both in China and abroad. Best known as the largest single investor in the Chinese tech sphere, he has close ties with party leadership and even employed the daughter of a top Politburo official. In March, was appointed as the sole delegate of the venture capital industry at the Chinese Peoples’ Political Consultative Conference, an arm of the Chinese government that advises the party on economic matters.

LAYERS OF CONCEALMENT EXPOSED

In addition to being financed by a close CCP ally, American TikTok employees have revealed that corporate decision-making involves direct input by Beijing. Despite official statements to the contrary, ByteDance executives exert significant control over the company’s activities in the U.S. and retain the ability to access all user data collected by TikTok.

It must be stated that CCP control over ByteDance is crystal clear. Unlike here in the U.S., Chinese corporations like ByteDance are required to give one of three seats on their board to the government. This gives the CCP de facto control of all decision-making, and ensures that the company’s corporate goals match the goals of the state. Additionally, at least 300 current employees of TikTok and ByteDance have worked or still work at CCP media outlets. American companies that do business with Chinese tech may not realize that they are inevitably working with the CCP.

TikTok has attempted to distance itself from ByteDance despite sharing employees and even a Palo Alto workspace. Yet their own privacy policy admits that the app may “share your information with a parent, subsidiary, or other affiliate of our corporate group.” In other words, if you download TikTok, your name, your location, and even your face are being sent to ByteDance executives in China, who then offer full access to CCPleaders.

These concerns were first raised in 2020, during the Trump administration’s abortive attempt to ban TikTok. When questioned about user data being sent to China, TikTok and ByteDance denied everything. They claimed that all user data is held in the U.S. and Singapore, and is not accessed by the CCP. Thanks to the recently settled class action complaint, we know this was a lie. These new documents reveal exactly what TikTok is stealing from us, and how they do it.

The lawsuit contained damning evidence about the app’s use in Chinese government surveillance and exposed repeated attempts to conceal this fact. Take the previous claim that no data is sent to servers in China:

Defendants used the TikTok app to transfer private and personally identifiable user data and content to the following two servers in China as recently as April 2019: (i) bugly.qq.com and (ii) umeng.com. 221. Private and personally identifiable TikTok user data and content transferred to bugly.qq.com as recently as April 2019 includes at least the following items: (i) the OS version; (ii) the mobile device model; (iii) the WiFi MAC address; (iv) the hardware serial number; (v) the device ID and (vi) the IP address. Private and personally identifiable TikTok user data and content transferred to umeng.com as recently as April 2019 includes these same six items, plus at least the following item: (vii) the number of bytes users’ mobile devices have uploaded and downloaded.

This is unambiguous. An independent analysis has revealed that if you use TikTok, your data is being sent to China. And once your data arrives in China, it is the property of the CCP.

CCP domination of the Beijing tech sector is widely understood. According to risk analyst Gabriel Wildau, companies such as ByteDance have no insulation from party pressure, as “the party-state wants the business community to serve its development objectives and is willing to sacrifice corporate profits to make that happen.”

Chinese tech companies are routinely pressed into performing surveillance or harassment duties on behalf of the CCP, including persecution of the Uyghur minority. One of these companies, the tech giant Baidu, patented a biometric technology that tracks users’ faces to determine ethnicity—a useful tool in the CCP campaign to identify and detain mass numbers of Uyghurs. And as this Illinois lawsuit reveals, Baidu is using these tactics not only to track dissidents in China, but everyday TikTok users right here in the United States:

Baidu, Alibaba, and Tencent—popularly known by the acronym BAT – are China’s original tech titans and dominate the fields of artificial intelligence, social media, and the internet in China. The private and personally identifiable TikTok user data and content they possess may well be used by the Chinese government in the future, if it has not already. BAT routinely assist the Chinese government in the surveillance and control of its people through biometrics.

Biometric surveillance involves the use of new technology to track specific details of users’ faces and voices—anything that makes us unique as individuals. This kind of data is especially valuable because, unlike a password, this biometric information can never be changed or recovered.

China now leads the world in facial recognition software, and Chinese startups have been sanctioned by Washington for allowing the Chinese government to use their technology to track, harass, and imprison dissidents. TikTok needs to be understood in this context: It is another tool in the CCP arsenal of mass international surveillance.

As the court documents reveal, BAT tech companies operate the Chinese servers that we now know are used to store TikTok data:

The bugly.qq.com server is owned and operated by China-based tech giant Tencent Holdings Limited (Tencent), and the umeng.com server is owned and operated by another China-based tech giant Alibaba Holding Group Limited (Alibaba). Tencent and Alibaba thus possess TikTok users’ private and personally identifiable data and content. Such data transfers to Tencent and Alibaba servers were accomplished through Tencent and Alibaba source code that Defendants embedded within the TikTok app.

This link between BAT firms and TikTok goes deeper still. Source code created by Baidu is embedded within the app, and TikTok relies on similar biometric techniques to track and capture the faces and voices of users. In 2020, ByteDance VP Ma Wei-Ying gave a speech in English in which he bragged about the company’s use of new techniques to track users and store biometric data in a massive database that can be accessed by the Chinese government. U.S. National Security Adviser Rob O’Brien has warned that all biometric data accessed by ByteDance is inevitably accessed by the CCP.

Additionally, TikTok includes software known as Igexin SDK, notorious for its function as a “back door” to install Chinese spyware on users’ devices. In 2017, Google and Apple removed 500 apps made with Igexin SDK from their store after it was determined that these apps could secretly track users’ phone calls.

Before TikTok, Chinese law enforcement relied more heavily on the products of American tech companies to track users in China and abroad: In the first half of 2017 alone, the CCP requested information from Apple on 35,000 of its users. The rise of TikTok allows the party to cut out the middleman. If the world is hooked on an app developed by a party-controlled company like ByteDance, and financed with party money, then the CCP can track users around the world using homegrown surveillance technology.

The CCP’s control over ByteDance is not a secret. Beijing has an ownership stake in the company and exerts significant control over corporate decision-making. Like the nesting dolls sold in another communist country, the CCP controls ByteDance and ByteDance controls TikTok. These layers of concealment give TikTok users and investors the false sense of a public-private distinction that does not reflect the reality of business in China. When presented with the facts, there can no longer be any doubt that your children’s favorite app is a weapon of the Chinese state.

The CCP is clear in its goals: a global takeover of the artificial intelligence sector, and use of these technologies to track individuals anywhere on earth. Techniques of surveillance, blackmail, and harassment deployed against dissidents in China can and are being used against American citizens.

Just weeks ago, we found the smoking gun: A team of ByteDance officials in Beijing had used TikTok to track the behavior and whereabouts of a U.S. citizen. According to a Forbes exposé, at least one user with no professional relationship with ByteDance was being tracked for unknown purposes on behalf of the government. Once this information is sent to China, there is no way for American users to prevent their data from falling into the hands of the CCP.

FAR-REACHING, AND DANGEROUS, IMPLICATIONS

We know the Chinese government uses TikTok’s data-collection abilities to surveil its users, who number in the hundreds of millions worldwide. But what kinds of user data are they accessing? As the Illinois court documents reveal, everything from the sound of your voice to the drafts in your inbox will be recorded and collected for future use.

TikTok has a simple, friendly interface that encourages users to join through their Facebook or Google account. It’s unlikely that fans of the app realize that this single sign-on feature gives TikTok complete access to the contents of any of those social media accounts. Once TikTok has been downloaded, any kind of sensitive material held in a Gmail account is put at risk.

Even users who do not upload videos are at risk of data collection. When you install TikTok, this app immediately begins searching your device for valuable information. You do not need to create an account or ever open the app:

From each mobile device on which the TikTok app is installed, Defendants take a combination of, among other items, the following user identifiers and mobile device identifiers:

1. username, password, age/birthday, email address, and profile image
2. user-generated content, including messages sent through the apps
3. phone and social network contacts
4. the mobile device’s WiFi MAC address, which is the unique hardware number on the WiFi adapter that tells the internet who is connected to it
5. the mobile device’s International Mobile Equipment Identity number, which is a unique number given to every mobile device that is used to route calls to one’s phone
6. the user’s International Mobile Subscriber Identity number, which is a unique number given to every subscriber to a mobile network
7. the IP address which is a numerical label assigned to each user mobile device connected to a computer network that uses the Internet Protocol for communication.
8. the device ID, which is a unique, identifying number or group of numbers assigned to the user’s individual mobile device that is separate from the hardware serial number
9. the OS version
10. the mobile device brand and model
11. the hardware serial number, which is the unique, identifying number or group of numbers assigned to the user’s individual mobile device
12. the Advertising ID, which is a unique ID for advertising that provides developers with a simple, standard system to monetize their apps
13. mobile carrier information
14. network information, including the technology that the carrier uses
15. browsing history
16. cookies
17. metadata
18. precise physical location, including based on SIM card, cell towers and/or GPS.

Together, all this information allows TikTok and ByteDance, and by extension the government of China, an exceptional ability to track any given individual in the United States. And “track” doesn’t just refer to web-viewing habits—China can pinpoint the physical location of every single person who has TikTok on their device, down to the very floor of a building where a user is standing.

TikTok facial recognition software is another area of great concern. The app’s source code contains lines to detect facial features and face motion, which it uses to predict age, gender, and ethnicity when recommending videos:

When artificial intelligence researcher Marc Faddoul joined TikTok a few days ago, he saw something concerning: When he followed a new account, the profiles recommended by TikTok seemed eerily, physically similar to the profile picture of the first account. Following a young-looking blond woman, for instance, yielded recommendations to follow more young-looking blond women. … Following black men led to recommendations to follow more black men. Following white men with beards produced recommendations for more white men with beards. Following elderly people spawned recommendations for other elderly people. And on and on. … Faddoul also told Recode that he believes it’s more likely that TikTok is using something he calls automatic featurization. This type of recommendation algorithm could take signals from profile images to find profile pictures with similar attributes. These kinds of signals would be correlations between the pictures, which could correspond to anything from skin color to having a beard. The algorithm is simply looking for similarities in the photos or profiles. … What I suspect is happening is that TikTok is featurizing the profile picture, he says, and using these features in the recommendation engine.

This data collection, which happens completely without the consent of the users, is especially concerning in light of China’s push to create an international biometric database.

Any users who have ever activated the in-app camera may find themselves included in Chinese government databases, and can be tracked by Chinese spyware for the rest of their lives. This kind of a database represents an unprecedented privacy threat. With the rise of “deep fake” manipulated videos, access to our faces and voices can be used to blackmail everyday citizens or sow distrust in our leaders and institutions.

Another important feature is the app’s ability to access the user’s clipboard, a feature not disclosed in its terms of service, which means any text, image, or web link that is ever copied may be held forever on ByteDance servers. Not even unsent messages are safe. TikTok records keystrokes, which means that any words or letters ever typed on a device will potentially be recorded, regardless of whether these words are ever uploaded to the internet.

Perhaps the most threatening security implication involves Apple’s Handoff function—a usually innocuous feature that allows TikTok to access information stored on other devices with a shared Apple account. This is how Apple users can access their SMS inbox from their laptops. But when given to the wrong hands, Handoff allows a hacker who has gained access to a cell phone to break into connected devices, such as a government-issued laptop with the same Apple login. This feature also allows communication between different Apple accounts, and the Illinois court docs allege that TikTok has used this feature to access data stored on entirely unconnected devices located nearby.

These revelations paint a clear picture: TikTok operates like a highly effective piece of malware that spreads, like a virus, to effectively any electronic device in its proximity. People who have installed the app lose control of their data even if they never use TikTok, and simple physical contact with another online device can expose others’ data and documents.

Former congressional national security advisor Klon Kitchen, now a senior fellow at the American Enterprise Institute, summarized the threat on 60 Minutes:

Imagine you woke up tomorrow morning and you saw a news report that China had distributed 100 million sensors around the United States, and that any time an American walked past one of these sensors, this sensor automatically collected off of your phone your name, your home address, your personal network, who you’re friends with, your online viewing habits and a whole host of other pieces of information. Well, that’s precisely what TikTok is. It has 100 million U.S. users; it collects all of that information.

If the cause for alarm is still not clear, let me illustrate how easily this app can threaten our national security. A congressional staffer with top secret security clearance is handling documents concerning electric-grid vulnerabilities in their congressperson’s district. These documents are stored on a laptop computer that is only accessed for work purposes. Even if this laptop is kept in a tote bag or in the trunk of a car, a five-second encounter with a nearby TikTok user allows the app access to the mailbox or documents stored on the staffer’s laptop. The electric grid documents are collected by ByteDance employees, who send them to the ever-growing Chinese database of stolen American intelligence. Now consider that 1.2 million people have top secret security clearance, and a full 2.8 million have some access to classified government materials. Most likely, this situation has already happened.

Cyberspace is the front line of the escalating United States conflict with China. Hackers employed by the Chinese government have gained access to at least six state governments and multiple federal agencies. Teams of Chinese hackers have stolen technology from research universities and corporate secrets from many prominent businesses. In 2018, CCP hackers seized data from half-a-billion customers of Marriott hotels.These underhanded tactics are an assault on both national security and free trade. As per the FBI:

The Chinese government is fighting a generational fight to surpass our country in economic and technological leadership. But not through legitimate innovation, not through fair and lawful competition, and not by giving their citizens the freedom of thought and speech and creativity we treasure here in the United States. Instead, they’ve shown that they’re willing to steal their way up the economic ladder at our expense.

The FBI has teams working around the clock to counter the efforts of Beijing cybercriminals. But as the Chinese and American economies become increasingly interconnected, particularly in the world of tech, more avenues open for unscrupulous actors to gain access to sensitive information pertaining to business or the military. If TikTok usage continues to spread, Chinese hackers may be able to access this kind of material without needing to crack a single encryption.

In an attempt to staunch the bleeding, the Department of Defense has blocked its members from accessing TikTok. Thanks to the Handover feature and other methods of inter-device communication, this is not sufficient. Servicemembers’ devices constantly communicate with the devices of a child, friend, or spouse who has ByteDance software installed. Much like the current ongoing security negotiations with TikTok, this kind of quick fix cannot be effective at stopping China from accessing Americans’ information. If the White House is serious about protecting our data and keeping us safe, then they will recognize that there is no way to outsmart such an effective weapon. The only recourse is to ban it.

Because if they don’t do it, somebody else will.

A TIKTOK BAN IS INEVITABLE—AND OVERDUE

Inaction on this front leaves the Biden Administration and the entire Democratic party wide open to criticism by Republican opponents. Figures such as Mike Pompeo have criticized Barack Obama and other Democrats for normalizing TikTok usage by using the platform for voter outreach.

While many criticized Trump administration efforts to ban the app or divest it from Chinese ownership, Democratic leaders such as Senator Mark Warner have acknowledged that “Donald Trump was right on TikTok,” stating: “If your kids are on TikTok … the ability for China to have undue influence is, I think, a much greater challenge and a much more immediate threat than any kind of actual, armed conflict.”

A bipartisan letter penned by Senators Chuck Schumer and Tom Cotton to the National Security Council in 2020 underscored these concerns, emphasizing that “TikTok is a potential counterintelligence threat we cannot ignore.” Over the summer, Senator Cotton urged Treasury Secretary and CFIUS chair Janet Yellen to discuss with President Biden the possibility of resuming the discussed ban on TikTok.

Revelations from the recent $100 million settlement in Illinois vindicate attempts to ban TikTok by the previous administration. This new proof of TikTok’s use as a weapon by the CCP should compel the White House to finish the job. There is an international precedent for such action: Other governments, such as India, Pakistan, and Indonesia, have already enacted bans on TikTok.

Such a ban is also well within the authority of the federal government. Statements by U.S. lawmakers suggest bipartisan interest in potential legislation to prohibit the app. Alternatively, CFIUS can shape our regulatory landscape in ways that make it impossible for malicious apps such as TikTok to operate legally.

So far, the Biden administration has still been unwilling to criticize TikTok directly. In addition to the ongoing negotiations that may do more to protect ByteDance and our security, a recent press conference highlighting intelligence threats from China neglected to mention which app or tech company is at the center of Chinese espionage operations.

This hesitation is understandable. TikTok is particularly popular among young people—Pew Research Center reports that nearly half of those under 30 use the app. However, recent polling data indicates that a majority of Americans ages 18–24 and a plurality of those ages 25–34 support a ban. Any potential Gen-Z ire will evaporate once TikTok is supplanted by a new short-form video platform, just like Vine or Periscope before it. Its replacement will not be a weapon of war created by a hostile foreign power.

Commissioner Carr believes that a ban on TikTok is inevitable. This was followed by IAC Chairman Barry Diller’s prediction that the app will be banned.

The writing is on the wall. I urge the Biden Administration to use CFIUS to ban the app as soon as possible and not leave this to a future administration.

As I noted in my previous op-ed, President Biden has already shown the good sense to ban TikTok usage by campaign staffers, close associates, and even members of his family. The next step is extending this protection to the rest of the country.

Whichever party bans this rapidly growing software will prove they have the courage to defend our country from foreign threats and the foresight to identify dangers that were unimaginable before our social media age. If President Biden banishes TikTok from our shores, he will dismantle the greatest weapon China has in its assault on our safety and our liberty, and demonstrate that Americans’ lives are not for sale.

Ryan Kavanaugh is the 26th highest grossing movie producer of all time and the co-founder of Triller, one of three fastest growing social media apps.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

At the helm of PacSun, Brieane Olson has focused on the intersection of the virtual and physical spaces, along with community impact, which is at the core of the brand. Over the past two years, PacSun has announced partnerships with ASAP Rocky, Jerry Lorenzo, the Los Angeles Rams, and, most recently, New York’s Metropolitan Museum of Art and ComplexCon. Here, she shares the brand’s evolution from retail into virtual gaming spaces and beyond.

TELL ME ABOUT THE CULTURE OF PACSUN AND THE IMPRINT ACROSS CULTURE FROM MUSIC, SPORT, DIGITAL, AND INNOVATION.

I’ve been at PacSun for 16 years so it’s been a unique journey of reinvention and a fluid evolution of our customer. I would be remiss to talk about our brand without first talking about our consumer as we consider our consumer to be at the forefront, as the cultural pioneers of the future. Our brand is right at the intersection of culture from sport to fashion, so anything relevant to that Gen Z consumer is our mission to cultivate and create these really powerful moments for our brand. Not only is the PacSun brand representative of that, but you can see that across our brand partners and the collaborations that we bring to life. The consumer is at the heart of what our PacSun purpose is and what propels our values and decision-making. Creativity and innovation are key, along with a keen focus on the sweet spot of our consumer demo being 16 to 24.

CAN YOU SHARE HOW THE BUSINESS CHANGED AND YOUR PLANS COMING OUT OF COVID?

We all had to pivot and adjust plans, but there were some real growth opportunities. From a leadership standpoint, COVID was trying for a lot of organizations because you had your teams fully remote. For PacSun’s leadership team, we had a core advantage of having our team working together for over a decade. These close relationships that were already in place both professionally and personally helped us improve our performance and created a closeness despite being fully remote. Having a close-knit and tenured team that had worked together for years made it more manageable to motivate, inspire, and lead a team through what was a very challenging chapter of the pandemic. Our results in 2020 and 2021 were quite humbling because, despite what was happening globally, we had some of the best revenue performance in years. I think a large part of it was that there was a large macro push towards athleisure and casual clothing with everyone at home. Also, there was a real focus on culture and being able to connect from a digital standpoint, which we had a head start on.

WHAT IS YOUR APPROACH ACROSS DIGITAL AND EXPERIENTIAL LANDSCAPES?

We are ensuring that we create experiential moments with the customer, whether we are building on Roblox or at retail in our stores. We realize how important identity is in the virtual space. Social interaction and academic engagement all became digital during the pandemic. I’m fascinated with the evolving relationship between identities in the virtual and physical spaces as a brand and the corporate and social responsibility and role brands play in helping to navigate the space.

HOW DOES PACSUN UTILIZE SOCIAL PLATFORMS AND HOW DOES THIS ENHANCE THE PACSUN BRAND’S STORYTELLING?

Our PacSun team flourishes in moments where there’s reinvention or a real need for creativity and innovation. We did a lot of experimentation and exploration into new spaces. We grew our TikTok platform in 2021 to a million followers. After 18 months we had 1.6 million followers, and recently in 2022 eclipsed the 2 million mark. We think about it as a way to engage, whether it’s from an entertainment standpoint, product focus, or community engagement where we can amplify the voices in our community. For the majority of the pandemic, we focused on evolving and extending our brand voice—whether on Pactalks, TikTok, Snapchat, or gaming—allowing the amplification of our brand voice through brand ambassadors and going well beyond the traditional approach with influencers.

CAN YOU TALK MORE ABOUT THE IMPORTANCE OF THE PHYSICAL VERSUS VIRTUAL SPACES AND HOW YOU ARE STAYING AT THE FOREFRONT OF THESE TRENDS?

The metaverse can feel overwhelming for a brand trying to navigate their voice in the space, but how and why you determine how to make moves, with which partners and being true to what your resources are, are all key questions as you begin. For Pacsun, we looked to our consumers, as young as Gen Alpha, as we made some progressive moves in this space. I think a really important point of delineation is that PacSun is not trying to chase the metaverse because it is a trendy thing to do. Our desire to enter the metaverse actually came from our in-depth consumer research over the past few years, and a recognition that many young consumers are really into gaming. The pandemic accelerated the growth of digital, but PacSun had already strategically invested in our long-range plans towards digital integration and acceleration, so our growth was well prepared. Many luxury brands have done a phenomenal job leading the way. PacSun is in a really exciting stage of exploration, innovation, and experimentation. When things don’t work, we use it as a learning and evolve, because we know growth comes from exploration and that means success and failure. In order to see growth and pioneer the future, you have to push boundaries and get a bit uncomfortable.

TALK TO US ABOUT YOUR ROBLOX INTEGRATION.

We were one of the first brands to have our catalog of PacSun-branded clothing on Roblox. We saw such amazing engagement from the consumers and replication of styles and I see that as a great honor when the consumer is replicating your styles because they want to get that look. We fondly coined that “product emulation,” and it is a true testament to brand affinity for us.

CAN YOU SHARE SOME OF THE UNEXPECTED BRAND EXTENSIONS PACSUN HAS BROKEN INTO, INCLUDING CREATING ITS OWN GAME?

The expansion of the PacSun brand into gaming was more challenging than we had anticipated. We anticipated a shorter timeline, but when we went to build the game, we were working on it for far more months than anticipated. Our brand expanded beyond gaming this year. In our spring 2022 campaign we bridged the concept of the physical and virtual worlds with [social media influencer] Emma Chamberlain, and marked a key milestone for Emma’s first virtual avatar; similar to ASAP Rocky in his first NFT, she chose to keep her identity similar to her true physical self when debuting in the virtual space.

SoundBytes is a marketing collective bringing best-in-class marketers together to propel collaboration, innovation, and deal-making, featuring a diverse range of speakers and addressing key topics across entertainment, music, sports, and media. The mission of Soundbytes is to build community, create authentic connections by sharing insight and intel to help propel collaboration and business objectives forward into the future. Run by Michelle Edgar and Jessica Nuremberg, SoundBytes has curated over 30 sessions featuring Fortune 500 C-suite marketers.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

We live in tumultuous, uncertain times, and the destiny of every organization depends on how well it can leverage its human capital in general, and its top talent, in particular.

As I have mentioned a few times before in CSQ, the importance of talent management in times of crisis and change is difficult to overestimate. Talented employees always remain in demand—in a good economy, they are your most valuable assets that provide extraordinary value, while in difficult economic conditions, they are the ones who can keep your company afloat and competition at bay. In times of change, talent is the only true strength organizations can rely on.

As the “Great Resignation” has shown, people no longer want meaningless and thankless jobs; they would rather stay away from the regular workforce than go back to a “hamster wheel” of nine-to-five office work. However, the peak of mass voluntary turnover seems now to be behind us, and most companies can finally refocus their talent management endeavors from talent acquisition to talent retention.

Organizations should not yet breathe a sigh of relief, though, since instead of the “Great Resignation,” it appears that we are now dealing with the “Great Recalibration,” when people begin rethinking the role of work in their lives. Retention is not only about good compensation, developmental opportunities, and great working atmosphere anymore, but is also about flexibility, trust, purpose, balance, asynchrony, and emotional well-being. Smart organizations are, therefore, already starting to adjust retention strategies around these important factors.

Some experts recommend that organizations work on creating “sticky” workplaces, those that people do not want to leave. It goes without saying that adequate compensation, benefits, and career growth opportunities should just be the first step— necessary but definitely not sufficient. To take the next step and begin creating a sticky workplace, it is necessary for managers to listen to their employees, addressing their concerns, anticipating their needs, promoting health and wellness, supporting open, transparent, and multidirectional communication, and establishing and maintaining trust, among other strategies. To build your own sticky workplace, it is essential to understand the basic assumptions that underpin this model.

Work stickiness is based on the notion of job embeddedness, which is a relatively novel concept in the world of people management, especially when it comes to talent retention. The traditional view on the issue of retention includes the factors from voluntary turnover research (job satisfaction and the absence of job alternatives) and other positive behavioral aspects of an employee’s attitude toward their job (organizational commitment, perceived management support, etc.). The more recent research has shown, however, that there are more factors that make employees stay with a company. The first set of factors includes all sorts of off-the-job aspects of an employee’s life, such as family pressure, community commitment, and hobbies. The second set involves the emotional attachment an employee has to their co-workers, various company activities, perks, and job routines. Scholars used the term “embeddedness” to combine all of these factors that greatly influence retention.

Simply put, people stay not only because they are satisfied with their jobs and have no other job alternatives, but also because they are embedded into their jobs via various links to their families, co-workers, and communities.

Researchers argue that job embeddedness consists of three key factors: links, fit, and sacrifice.

• Links are defined as the connections people have with other people or groups of people. Links could be either on the job, such as professional associations, or off the job, such as a church community.
• Fit is an employee’s perceived match with their job, company, and local community. Just like with links, fit could be either on the job (compatibility with co-workers, corporate culture, etc.) or off the job (compatibility with family schedule, etc.).
• Sacrifice is an opportunity cost of what people have to relinquish if they decide to leave. Most sacrifices involve financial inducements—such as retention bonuses, stock options, and educational funds—that people forgo if they leave. However, the more important sacrifice people can make is to give up an opportunity for long-term professional development with the company, flexible working arrangements, mental health support, pleasant organizational environment, among others.

To sum up, job embeddedness reflects a whole variety of both on- and off-the-job factors that help keep people, and especially, top talent, in their current jobs.

So, how should practicing managers use this concept to revise, systematize, and rebuild their retention strategies? First, think about on-the-job links that you can offer your employees, be it a paid-for memberships in professional associations, clear career paths, or continuous professional development opportunities.

Next, turn your attention to fit and make sure that your valued employees are deployed in job roles that match their knowledge, skills, and abilities, and that they can take advantage of flexibility in where and when they work and enjoy a supportive work environment.

Finally, when considering sacrifices that your most valued employees will make if or when they decide to leave you, besides purely financial stimuli, pay special attention to non-financial ones, such as the sense of purpose and belonging, talent-centered organizational culture, and career growth opportunities.

Once again, (re)developing your retention strategy based on the notion of job embeddedness will assist you in being more systematic in your approach and help you succeed in turning your organization into a sticky workplace.

One word of caution, though: Do not be overzealous with job stickiness. Creating too much embeddedness (i.e., maximizing links, fit, and sacrifice) can make people feel trapped within the company, which will have the opposite effect on your retention efforts. Just like with everything in our lives, use your common sense and keep a meaningful balance between the three main components of job embeddedness.

Vlad Vaiman is Professor and an Associate Dean at the School of Management of California Lutheran University and a visiting professor at several premier universities around the world.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Matilda Sung has established herself in a male-dominated world in a series of bold yet graceful plays. She’s confidently invested $500,000 to $1 million into companies in the interconnected universes of sports media, sports betting, entertainment, and technology. However, she’s also looking at the long game of these industries, not only ensuring they are on strong financial footing, but that they will also become more diverse with more women and people of color joining their ranks.

Sung may be under 40, but she brings over 15 years of management experience to her day-to-day mission helping companies strategize, conceptualize, develop, and deliver on digital products, services, and experiences. The Ludis Capital co-founder and general partner describes herself as a “hands-on/early-stage investor” focusing on companies demonstrating superior growth and potential for impact to business, economy, and society. During her rookie years after graduation, Sung joined the investment banking track of an international bank as the only woman in her cohort of new hires. After earning her MBA, she did stints with an all-star lineup of financial and tech companies like PayPal and HSBC Investment Banking.

Today, Sung is an active mentor and advisor to numerous entrepreneurs and budding MBA graduates. She also sits on a number of startup advisory boards and is a stalwart investor with various private HNW investor groups, including the Tech Coast Angels Group in Los Angeles. She’s a regular presence as a judge and speaker at various industry events, sharing her expertise on topics like startup development and fundraising, strategy planning, web3 and crypto, and numerous sports tech specific subjects, including over-the-top (OTT) platforms, gaming and betting, and connected health and fitness.

Simply put, calling her an MVP in this burgeoning space barely scratches the surface. In this conversation, we’re starting with her accomplishments in her work with the NFL’s social media efforts and the changing landscape of sports betting. From there, the field is wide open. Christopher Yang, who serves with Sung on the executive board of Tech Coast Angels–Los Angeles (one of the largest, most active angel investment networks in the U.S.), sat down with her to discuss her career, play by play.

ALTHOUGH HOLDING POSTS AT HSBC, MCKINSEY, AND PAYPAL BEFORE AGE 40
IS A GREAT ACCOMPLISHMENT ON ITS OWN, YOU MADE YOUR NAME AS THE
PERSON RESPONSIBLE FOR THE NFL’S ENTIRE DIRECT-TO-CONSUMER EXPERIENCE.
WERE YOU ALWAYS DRAWN TO THE SPORTS WORLD?

I didn’t think I was going to end up working in sports, or end up back in finance and venture after years of focusing on investment banking. I was a typical consultant, on the road four days a week, sometimes five, maybe home for the weekends, or leave on a Sunday. I loved it. I had such a wonderful time working with companies in different sectors, including manufacturing, financial services, pharma, and you name it. My purpose was helping them think through their strategic objectives in the context of technology and digital.

After I had my first child, however, it was a challenge to transition to being a new mom while maintaining that management-consultant lifestyle. One of my clients actually said, “Hey, why don’t you talk to the NFL in L.A.? They’re actually looking to build out their digital strategy group.” I thought, “I’m a fan, but I’ve never worked for a sporting organization before.” As you can imagine, my friends and my husband insisted I go talk to them. I went in and had a conversation with David Jurenka, who was brought in to basically run their owned and operated entity, and from there, I went to work for the NFL.

WHAT WAS THE PROCESS OF PLANNING FOR THE IMPLEMENTATION OF THESE
DIRECT-TO-CONSUMER GOALS AND OBJECTIVES?

As all of the NFL is direct-to-consumer channels, I needed to really think through how we could position them in the beginning. But in my initial conversation with David and the slate of folks I met, I just really hit it off with everybody. I was thoroughly impressed with how they were thinking about the world, the sport, and the opportunities and threats that they were facing. I wasn’t expecting that in full honesty. They have been tracking and monitoring a number of trends that needed to be addressed. For example, people weren’t necessarily going to in person games as often as they used to. People weren’t re-upping their season tickets, the new generation of fans just weren’t consuming the same way. A good number of them didn’t have TVs, and if they did, they didn’t have cable. We had to consider repositioning the NFL in such a way that we can cater to this next generation of fans.

WHAT IS IT ABOUT IN THE INTERSECTION OF SPORTS, TECHNOLOGY,
AND ENTERTAINMENT THAT YOU FOUND MOST INTRIGUING?

In this role, I was in the sweet spot of being able to sit at the cross-section of some of the world’s most valuable content as well as a host of really fun, interesting technologies that allow consumers and fans to watch more easily and engage with what’s going on. During this time, the impact of this intersection came to me like an “aha!” moment. It is technology that is not just disrupting football or the NFL, but also the possibility to disrupt sports in a big, meaningful way. When I was at McKinsey, I had a front-row seat to seeing different industries, manufacturing, financial services, and pharma get disrupted. I learned that sports is no different. It became apparent to me that there are all these different parts of the sports fan journey that could be disrupted by technology and that can be improved with additional technology investments.

WHAT ARE SOME EXAMPLES OF OTHER SPORTS THAT HAVE CHANGED
THEIR APPROACH TO REACHING FANS IN THE WAKE OF NEW INNOVATIONS
LIKE STREAMING TECHNOLOGY?

One of the examples we talk often about is Major League Baseball (MLB) and BAM streaming technology. I don’t know if readers remember when MLB stripped out Bamtech, its tech arm, about 20 years ago, and each of the MLB teams committed a million dollars to this. They built the streaming technologies really just to power baseball on OTT devices for fans. This, in turn, started an entertainment startup parent powering some of the shows for Hulu and Disney. You may recall that a year or two ago, it was all over the news that Disney ended up buying out the remaining portion of their ownership of BAM tickets.

CAN YOU EXPLAIN YOUR APPROACH TO SPORTS TECH, AND WHAT SETS YOUR COMPANY APART FROM OTHER VENTURE CAPITAL FIRMS IN THE SAME VERTICAL?

Here is the broad way I would explain our approach to somebody who isn’t necessarily involved with sports tech. We typically look at things at a very high level, at the intersection of sports technology and media and human. At the macro level, we believe in investing in technologies, mostly software, some hardware, that serve to drive growth, expand the consumption and delight around sports and entertainment. People think sports tech is small, but actually it covers a wide area. It could be at the professional level or the amateur level, junior level and the youth sports or teams as well. We look at everything from broadcast technologies to data analytics for our sporting leagues, and athletes to health and fitness applications, to sports betting to fantasy and gaming.

WHAT SIZE COMPANY DO YOU USUALLY INVEST IN?

As far as sort of the criteria and what we look for, there’s sort of a few principles that our team goes by that have guided us over the last several years and going forward as well. These principles are made up of observations that we have had in our respective careers, either as sports execs, former or current athletes, founders of gyms, and financiers. Everybody in our network has come together to sort of pull these ideas into one place. And one thing we observed was the fact that the sports industry is actually grossly under monetized.

THERE’S TALK OF A RECESSION LOOMING AHEAD. HOW HAS THAT IMPACTED
YOUR INVESTMENT APPROACH, PARTICULARLY IN THE SHORT TERM?

We’re actually in the middle of a market correction. When we cranked up our numbers again recently, we noticed the gap had closed. When you’ve got Netflix, for example, losing a good chunk of its market cap, the numbers have closed. With our business on the other side, what’s much more telling is the fact that the sporting leagues, the NFL, for example, renegotiated a number of their contracts in 2020. They’re looking at a valuation of the league and the clubs at north of $100 billion.

When you do the math, it works out to about $250 per fan, which is five times what it was before they had those renegotiations and revaluation of the teams. What has driven up that revaluation is the ability to prove that the more they can connect to more fans, they can drive more engagement, which is driven by that technology. Our second principle is around this idea that sports is really a place where you can test some of the latest and greatest technologies.

WHERE DO YOU SEE ALTERNATIVE INVESTMENT IN SPORTS AND GAMING GOING?

I think on the entrepreneurial side, we’re going to see healthy growth and new entrants coming in. They come from a wide range of backgrounds, and not just folks who were former athletes or those who earned their sports business degree. There are folks who are data scientists, PhDs, and other fields. This is what’s most exciting—attracting people, entrepreneurship, ideas, and innovation from people who aren’t necessarily from the sport space.

The other thing that I’m really excited about is sort of this growing level of access for not just sports tech, but for venture-like alternative investments. There’s been a growing awareness and education in the space. For us, there’s a lot of tier-one athletes who are getting into the space. However, what I think we’re excited about is some of the tier-two or tier-three college or high school getting more financially literate and getting excited about alternative investments at large.

WHAT ABOUT WHAT’S HAPPENING ON THE INVESTOR SIDE?

I see a parallel, similar type of growth. In terms of diversifying the investor base, I think we’ve seen a lot of that for sports tech, as it’s a lot of high-net-worth, small, medium, large family office-type setups. But we’re increasingly seeing more interest from institutional side investors. In the last couple years, when it got time to look more carefully at a company that we might invest in, we’d ask the owner who else is being considered or who else is on the capital table. We were surprised to see some of those other names.

WHERE DO NEWER TRENDS SUCH AS BLOCK CHAINS AND NFTS COME INTO THIS?

There’s so many exciting things you can do when it comes to fan engagement with blockchain, above and beyond NFTs or tokens, and we’re pretty excited about that. When we talk to our athletes as well as our fans, there’s this idea that data is something that one can own. There’s a startup we’re talking to right now that’s looking to basically mobilize data for the athletes and have them have ownership over it. Consider this: You’re a tier-one athlete, you perform on a certain level, and you have a history of how you got to where you are. That data can be used for so many things, above and beyond field performance, and into the mass market. We’re looking to build up their athleticism on many fronts.

HOW DO WE PACKAGE DEALS IN A WAY THAT ALLOWS ATHLETES TO MONETIZE?

There are a host of issues we need to figure out, like ethics, data breaches, all that kind of stuff. But once you figure that out, you need to be sure every athlete owns our data. But the fans’ data is also important. For example, the data tracked shows I go to this many Rams games, and that I’m the biggest consumer in my household. They know I buy milk and yogurt every month. There are many interesting things in the data space that can benefit the athletes and their fans, but we’re probably not there yet. However, we’re starting to scratch the surface.

Matilda Sung is a General Partner at Ludis Capital, an investment management firm that invests in early stage companies operating at the intersection of sports, technology and media & entertainment. 

Syndicated and originally found on CSQ.com. The article, for reference, is here.

TELL US ABOUT YOUR CAREER JOURNEY.

I started my career as an engineer, working on 3D sound technologies at Dolby. I liked making products that empowered others to create, so that’s been kind of the threads through my career. Prior to joining Logitech, I founded a company in the creator space in the early days of user generated content enabling brands to connect with their fans beyond just likes and comments. We enabled brands to create interactive, user generated viral campaigns. After doing that for three years, I wanted to get back into the mix of hardware and software. Hardware was reaching a pivotal point where it was no longer a disconnected device. Logitech was a well-known company in the consumer PC consumer electronics space, and they were reinventing themselves.

WHAT OPPORTUNITIES DID THE PANDEMIC PRESENT IN THE MARKETPLACE FOR YOUR BUSINESS?

Eighteen months prior to the pandemic, we acquired Streamlabs, a live streaming software allowing users to easily stream themselves and their game play. It essentially allows anyone to create TV quality broadcasts from their bedroom. We saw the market moving in this direction, but the pandemic propelled everything a few years forward.

At the start of the pandemic, we saw many people turning to live streaming to overcome isolation and help raise awareness and funds for those most impacted by the pandemic. As the pandemic endured, many decided to become creators, sharing their passion, building communities and finding ways to monetize. Quite a few found success and some became internet superstars. Take Khaby Lame, an ex-factory worker in northern Italy – he blew up on TikTok after he got laid off due to covid. He’s now a Millionaire!

Creators really are the most influential people of the next decade. We’re moving from Media Corporations producing hundreds of TV shows consumed by billions. To millions of independent creators creating millions of shows daily catering to billions of people.

Over the last decade – creators have been making money almost exclusively via ad rev share and brand sponsorships. In fact, Influencer Marketing revenue grew more than 8x in the last 5 years to reach nearly $14B in 2021. The reduced effectiveness of traditional ads and the stricter privacy laws – will further drive the growth of influencer marketing. It is estimated to quadruple over the next 5 years.

TELL US ABOUT THE SHIFT YOU’VE SEEN WITH MARKETING AND INFLUENCERS.

There’s a shift in how brands need to think about reaching their audience. It’s becoming increasingly more expensive to buy access to audiences. Creators are building direct authentic connections with consumers – and building loyal fanbases. Over the past few years they have diversified their income and no longer want to promote any product/service to their audience. A recent survey by UTA – revealed that 40% of consumers in the US have already paid creators directly. They are paying them to support them – to get access to exclusive content and shout-outs, for virtual meet-and-greets, merch and more. Creators are now referred to as solopreneur: creating a business as an enterprise of one – the ultimate decentralized model where anyone can create a scalable business as a single individual. In this context, it’s critical that companies think of creators like sports brands think of athletes. You don’t just sponsor an athlete or team for 1 game. It’s a long-term relationship based on common values and trust!

AT LOGITECH, HOW DO YOU WORK WITH CREATORS?

We don’t utilize creators, we serve creators and partner with them. We look to first align our values. With creators, you decide to work with their audiences and it’s built on trust and having an authentic voice in a relationship.

HOW ARE YOU GOING TO CONTINUE AND EVOLVE AND GROW YOUR COMMUNITY?

The world is more dynamic than it’s ever been and things are evolving faster than they ever did. You need to know where you’re going, but at the same time, be ready to adapt to the environment we live in.

We did the first TikTok live show two years ago, before people were thinking about live streaming. This year, we did the first award show within a Metaverse together with Roblox. We’re going to continue to evolve in the way that we engage the community.

TALK TO ME ABOUT THE CONVERGENCE BETWEEN THE PHYSICAL AND DIGITAL?

I’m very bullish and passionate about how this is all going to shake out. For the next 10 years, we’re going to continue to see this evolve. I look at my kids and realize their relationship to digital and physical is different than mine as they blend the two in a much more seamless way. Although both digital and physical are still fairly disconnected at the moment, there are different ways to interact and engage with virtual environments that feel more natural.

Another model is more hybrid – we’re already used to having a phone in our hands, allowing us to talk and connect and listen to the news in real time no matter where we are. The next step is to overlay relevant contextual information in real-time. It’s like having a sixth sense.

TELL US ABOUT THE CLOUD GAMING PLATFORM YOU LAUNCHED LAST WEEK.

Cloud gaming is a super-exciting new way to play games. I love that you can access game libraries from anywhere. What we wanted to do was challenge ourselves to build a device that was perfectly optimized for cloud gaming. This meant precision controls similar to a high-end Xbox controller—a large HD screen, amazing battery life and lightweight design so players can enjoy long gaming sessions, without any compromises.

LOOKING AHEAD, WHAT IS THE FUTURE FORWARD?

The world is expecting a certain level of authenticity. Creators know this better than anyone because they’re engaging one-on-one with their community every day. Partnering with creators brings back a high touch that you have a tendency of losing as you get bigger. This whole creator economy is opening up a world of services that is actually enabling everyone to participate in the ecosystem.

We’re going to see people engage more and more in both the physical and digital spaces. We’ve seen people go purely digital during the pandemic, but as the world has reopened, the lines between digital and physical are increasingly being blurred. Virtual reality and augmented reality are transforming how we interact with others, the experiences we’re having from home, as well as, how we experience the physical world around us.

THE PAST TWO YEARS HAVE BROUGHT A LOT OF CHANGE. TELL US ABOUT THE PIVOTS YOU’VE HAD TO MAKE.

It’s funny because it came out of the startup ecosystem and pivot became a big thing in Silicon Valley 10 years ago. People were talking about pivots every time they were changing their strategy or the way they were thinking about their business. Life is a journey. Pivots, in that context, could refer to anytime you make a significant change in your life.

I am a very intuitive person. Important decisions in my life have been driven by two things: Pursuing my passions and driving positive impact. As you go through your life and your career, your ability to have impact naturally grows but the greatest impact comes from empowering others.

SoundBytes is a marketing collective bringing best-in-class marketers together to propel collaboration, innovation and deal-making featuring a diverse range of speakers and addressing key topics across entertainment, music, sports and media. The mission of Soundbytes is to build community, create authentic connections by sharing insight and intel to help propel collaboration and business objectives forward into the future. Run by Michelle Edgar and Jessica Nuremberg, SoundBytes has curated over 30 sessions featuring Fortune 500 C-suite marketers.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

If you’re like most people, you’ve probably never heard of generative AI. And that’s understandable—it’s a fairly new concept in the world of artificial intelligence (AI). But even though it’s still in its infancy, generative AI is starting to make waves in a variety of industries. Here’s a closer look at what this promising technology is all about and why you should care.

WHAT IS GENERATIVE AI?

In a nutshell, generative AI refers to AI systems that are capable of creating new data based on what they have learned. That might sound confusing, so let’s break it down with an example. Say you’re training a generative AI system to identify different types of animals. Once the system has learned what specific features distinguish, say, a cat from a dog, it can then generate new data that includes animals it has never seen before, like tigers or bears. This ability to create new data makes generative AI immensely powerful and opens up a world of possibilities.

WHY SHOULD YOU CARE?

Generative AI systems are already being used in a number of ways. For instance, they can be used to generate realistic 3D images or videos (a process known as “rendering”). They can also be used to create new products or altogether new designs for existing products. Some companies are even using them to generate realistic fake news stories in order to test the susceptibility of their employees to fake news sources. These are just a few examples of how generative AI is being used today—and as the technology continues to develop, there will likely be many more applications for it in the future.

WHY NOW

AI is rapidly evolving and changing the way we interact with technology. Generative AI in particular has seen a great deal of progress in recent years, fueled by better models, more data, and greater computational power. These advances have allowed systems to not only learn from existing examples, but also to create new examples from scratch. This has given rise to new applications for generative AI, including improved recommendation engines, novel photo- and video-editing tools, and intelligent assistants that can generate personalized responses on demand.

One key advantage of generative AI is its ability to uncover insights that may not be immediately apparent when working with existing datasets. For example, by generating thousands of new samples from an existing dataset, it becomes possible to train new models on these results to extract even more information from the data. And as this technology continues to advance at such a rapid pace, it seems clear that generative AI will play a major role in shaping the future of AI and beyond.

Suman Talukdar is a Founding Partner at AiSprouts.vc, helping entrepreneurs build category-leading ventures.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Our investment portfolios have dropped significantly in 2022, and for many of us, our confidence in the financial markets remains uncertain. We know historically that “markets” have performed and provided us with a stable way to systematically invest, with assurance that over time that our assets will grow.

Hopefully, we are also reallocating our investments to reflect our risk tolerance as well as our need for liquidity as we age and consider retirement.

There seems to be a renewed interest in certainty, in products like annuities and insurance, things that provide guarantees to families and retirement incomes, especially should the markets not return to some level of stability. Investors have returned to annuities and T-bills for certain investment returns, trading volatility for certainty—strategies not seen since the 2008 financial crisis. In short, people want to sleep at night!

Interest in life insurance has also suddenly skyrocketed, with people understanding that a reduction in their assets means fewer assets for heirs should they die prematurely.

Makes sense … with all of the news reporting war, global and weather-related disasters, shootings and random killings, escalating crime, and even with the era of COVID potentially in our rearview mirror, we have all suddenly come face to face with events that make us face our mortality. As Jim Morrison said, “No one here gets out alive.”

When was the last time you actually reviewed and contemplated the economic needs of your family or business, if you died tomorrow? What plans would you want to have in place if your ability to buy life insurance changed tomorrow?

Most people buy a term policy, “set and forget it.” Maybe a million dollars isn’t what it was years ago. Surely it doesn’t last as long as it once did. In fact, I’ll argue that most of us are under insured. By a LOT.

There are assets, and then there is liquidity. Life insurance brings liquidity to situations at exactly the right time. It brings money to families who may have lots of assets, but don’t have liquidity. Most people buy term insurance, but the problem with term insurance policies is that they are most likely to expire way before you do. Policies don’t get updated or refinanced. Then WHAM, you’re too old to requalify. Or it’s too costly.

If you haven’t revisited your life insurance policies in the last several years, this is the right time. Term life insurance rates are at an all time low. Then there are the new types of term policies that spring to life and can pay for things like long-term care if you need money while you’re alive. Your current policy likely doesn’t do that.

Life insurance can be a tool to transfer wealth, preserve assets, and make sure that special events—like weddings, home purchases, retirements, and grandchildren—get something special and create legacies. With the current low cost of life insurance and underwriters seeking year-end revenue, this is an extremely good time to revisit your life insurance portfolio.

People who plan are always more successful than those who fail to plan. What’s your plan?

Martin Levy, CLU/RHU is founder of Corporate Strategies Inc. (CorpStrat), located in Woodland Hills, Calif. A 30-year insurance industry veteran and lifetime member of the Million Dollar Round Table, Levy is an expert in long-term care planning strategies. You can reach him at (818) 468-0862 or [email protected].

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Work Autonomy

• Build autonomy into the job. Some successful organizations I am familiar with build autonomy into the job. They delegate responsibilities to their teams as much as possible by staffing them according to professionals’ competencies and seniority. These firms are trying to put their professionals on projects that require a high level of autonomy, so staffing is extremely important here.

Read more of Vlad Vaiman’s thought leadership.

• Think about eliminating middle management. In an interesting twist, some companies I follow have almost no middle management. Teams themselves take full charge of a project, and nobody is looking over their shoulders. The only measure here is customer satisfaction.
• Build on professional pride. Most organizations realize that professionals come to work with a certain level of professional pride. Therefore, they are given a large degree of professional autonomy or elbow room to complete their task, and no solutions are dictated from above. The expectations of good performance, however, are quite high.
• Promote thought leadership. Some companies give great autonomy to professionals by making thought leadership the norm. They are encouraged, and sometimes pushed, to think outside the box. These behaviors are supported for as long as the employee remains productive.

Fair Pay and Benefits

• Keep current with market realities. Most successful strategies involve having a special in-house compensation person or group who follows market trends. These firms tend to have state-of-the-art compensation systems that keep up with current market realities. The same could be applied to the benefit system, with thriving organizations usually having good profit-sharing systems and generous bonuses. Generally, in most companies, the compensation system is considered successful in terms of retaining employees if it is at market level or better. On the intrafirm level, most firms tie compensation to performance. In other words, there is a salary range for every position, with the actual numbers depending on an individual’s performance and contribution to the common goal.

While professionals are on their way up the organizational ranks, monetary rewards should be at the center of any compensation system. As talented employees ascend the organizational ladder, it becomes relatively less challenging to satisfy their economic needs. Therefore, the focus for retaining these employees should switch to more non-monetary rewards and incentives.

Rewarding poor performance is one of the major reasons top professionals become dissatisfied.

From the broader viewpoint on compensation, employee stock option plans (ESOPs) remain one of the most popular and most commonly used compensation and retention tools, especially in large, well-established organizations. The main idea behind using ESOPs is the perception that the employees could be motivated to perform more efficiently and productively if they own part of the company. Employees find stock options attractive because they provide them with an opportunity to harvest the benefits of the wealth they help create. Along with these benefits, ESOPs also help the firm in linking the performance to compensation packages and reiterating the importance of team effort among employees.

Despite obvious merits, there are some disadvantages to using ESOPs. Among these are that only profitable firms can use this tool, stock prices do not necessarily reflect the real position of the firm, and independent market realities could lead to falling stock prices, and therefore losses for employees. In addition, it has long been noticed that inability to liquidate part of the stock options can quickly diminish interest on the part of employees, and consequently reduce their motivation. As with everything in life, ESOPs should be used sparingly and with a great deal of caution.

• Do not create false hopes. The best strategies involve giving professionals a clear vision of their future, both in terms of professional growth and monetary rewards.
• Ensure equity. Most firms I am familiar with have a special system of equity checks in place. Simply put, ensure that all your top employees are recognized—both with monetary and non-monetary rewards—for their outstanding performance.
• Differentiate. While equity is important, do not push the best people toward the exit by rewarding average employees. Rewarding poor performance is one of the major reasons top professionals become dissatisfied. Mere compliance should not be rewarded. Everyone should be rewarded based solely on their performance and contribution to the common goal.

Learn more about California Lutheran University’s approach to talent management.

Recognition for a Job Well Done

• Appraise and encourage top performance. Most successful strategies involve building an extremely strong feedback and appraisal process in order to ensure fairness in promotions, raises, and other rewards. There is usually a vertical (up-down, down-up) appraisal system for all employees in an organization, but I recommend a little bit more expensive, but much more potent, 360-degree appraisal process, where employees are evaluated not only by their bosses but also by peers, subordinates, and clients.
• Use a variety of non-monetary rewards. Among the most prominent and successful practices are various regular newsletters, either print or electronic, where firm management highlights outstanding performance. Plaque presentations in front of colleagues as well as trips can also reward individuals and teams for good-quality work, customer service, sticking to company core values, or other accomplishments. People tend to appreciate all of these.
• Use a variety of monetary rewards. The best monetary rewards are bonuses, including spot bonuses where an employee gets up to $1,000 cash for a task performed well. Bonus programs that are not tied to excellent performance tend to be highly ineffective, so utilize such rewards sparingly, if at all.

In general, a combination of monetary and non-monetary rewards for a job well done is necessary to retain the best talent. 

Syndicated and originally found on CSQ.com. The article, for reference, is here.

How often do you stop and listen? Do you take the time to hear the stories of the people you are working with? In general, it’s not something people do enough, especially in business.

While leaders in the C suite must be singularly driven and goal-oriented, they also need to understand that collaboration among their entire team is derivative of success. Throughout my career, from working with the Baltimore Orioles and New York Mets, and in additional C-suite sports-marketing positions—and now in private equity as the founding Partner of Brand Velocity Partners (BVP)—I’ve realized that the core principles of business haven’t changed. The ties between sports and business are a lot more interconnected and they can shape the professional you are today. Here are highlights on how best to identify and conquer that white space.

Take the Risk on Those Big Plays

Working on behalf of two Major League Baseball teams that both won the World Series was exciting because it presented a handful of new opportunities and experiences. I learned that while it is important to win, it is not exactly everything when it comes to professional development. Commitment, growth, and ensuring that you are working to fulfill your goal should always be the primary focus.

Always push the limits to see the white space and the potential for greatness. To achieve, it is about putting ideas into actionable steps and executing them on behalf of a greater vision. You can think of ideas, but do you know how to get them executed, to find that short circuit from idea to execution?

Read more of Drew Sheinman’s thought leadership.

Hear Others’ Stories and Balance Perspectives

Part of what goes into being a trusted advisor and partner to people is the ability to listen. In the spirit of being a C-Suite Advisor, you are playing at the highest level in business. Having been seated on both sides of the table, I can assure you that possessing confidence and presenting ideas in a clear, articulate manner can mean winning over your superiors. Keeping this in mind, there is also a balance of sorts between communicating your ideas and listening to others.

Everyone loves to hear themselves talk, but in the C suite—and any leadership role—there needs to be an understanding when it comes to listening to others. This is where the influence of the team comes together and the connectedness between all parties involved. Part of that is paying attention to learn about your competition, and part of it is really understanding your partners. Given my experience in the sports/entertainment business, I have learned how to deal with a diverse group of personalities from executives to famous athletes and entertainers, while remaining focused on our common goal.

Be willing to always be learning and surround yourself with those who will help you accomplish these goals.

Stay Curious and Keep Learning

No matter how innovative or disruptive you feel your business is in the market, the business world is always changing, and you need to stay ahead. Much like in sports, you can’t stick to the same old thing. For me, the key to staying innovative is incessant curiosity. It tends to be better for your career the more curious you are about unearthing things others thought would be impossible, and if you’re clever enough, you can uncover life-changing opportunities. Be willing to always be learning and surround yourself with those who will help you accomplish these goals. It’s exactly what led my partners and me to creating BVP to acquire companies to create, finance, and innovate to make a difference in people’s lives beyond the capital. Feel emboldened to take risks and be curious because this often leads to better results—have courage of your convictions.

Look for the White Space

For me and my partners, when we look at a potential acquisition, it is really about the growth potential related to the company. While the financial foundation must be established, the real upside falls heavily on its growth potential and how you can contribute to its success. In private equity, you are investing in a company with positive earnings before interest, taxes, depreciation, and amortization (EBITDA)—these are existing, operating companies that are by nature successful. That is where capital comes into play.

I have been quoted as saying “capital is a commodity,” but what does that really mean? It means everything that you can bring to that investment beyond just writing a check. It is brand marketing, which most companies are not experts in, and business partner connectivity to find creative ways to grow. BVP is also a private-equity company that operates with a venture mentality, so you are buying companies with positive EBITDA, but you are bringing that mentality of innovation and vision to them. That is how to swing for the fences—and win.

Read more about Brand Velocity’s approach to developing sports businesses.

What Does It All Come Down To?

The pandemic has been crushing for all industries and people will want to know what you did during this time for both your career and your business. Some people did nothing or idled. Other people founded new businesses. For me, part of what helped was having a good support system and having the right partners to always ask the right questions. It has been a very welcome distraction to focus on business and productivity.

You know that being an entrepreneur is never easy, especially when building your own company like we did at BVP, but it is extremely rewarding. I have talked about this with fellow entrepreneurs and the best advice I can share is that you are built for this. You are built to figure things out in crisis. Be prepared to pivot and be resourceful. You are well-trained for dealing with massive, life-changing situations, and while some people in traditional corporate settings find it harder to evolve, I welcome the unknown and I am willing to put in the work to figure out the right solution. 

I’m all about connecting with peers, but in a world where digital reigns supreme, opportunities to meet face-to-face with like-minded individuals can be few and far between. That’s why happy hours, summits, conferences and networking opportunities are vital to individuals working within the ecommerce space. And there’s no shortage of these events to attend!

Any day of the week I can find a top-notch e-commerce event with panels led by high-level executives from well-known companies, a massive turnout, and a day full of brushing shoulders and handing out business cards. It’s a great way to scope out vendors and potential clients for Hawke. These events are also great for individuals looking to break into the industry.

[To read more of Erik Huberman’s thought leadership click here]

But I struggled to find anything geared toward those of us already secure in our positions. Where are the events that cater to the established executive looking to build out his or her community and collaborate with like-minded individuals?

National and global conferences are great, but localized events often have two key themes that these larger events lack: community and collaboration.

THE 2 CS

I’ve been in this industry for long enough and, over the years, I’ve noticed there aren’t too many events where top executives can get together and learn from each other. I struggled to find a space where we could all come and be honest, open, and ready to collaborate.

Why Community Is Important

A lot of time the rat race of starting a business can cause people to view their peers as direct competition. In reality, it’s incredibly important to surround yourself with a community of like-minded individuals that you view as friends and confidants–not threats to your success.

These people understand your trials and tribulations because they most likely went through it themselves or are currently in a similar situation. They can tell you what worked for them and what didn’t, inspire you to try something new, and be the emotional support you need when things don’t go exactly according to plan.

Community Leads to Collaboration

It may sound counterintuitive to help out your competition, but it doesn’t have to be a zero-sum game. Becoming part of an entrepreneurial community has helped me stay up-to-date on trends, given me a built-in support system, and has even led to new partnership opportunities.

In an industry that’s constantly changing, staying current can be difficult. Exchanging ideas and thoughts about industry changes with the members in your community can help you anticipate change and proactively adjust.

THE KEY: LOCALIZED EVENTS

What I Saw

E-commerce events that focus on fostering that sense of community, rather than just getting the biggest names from Google or Amazon, are incredibly valuable when it comes helping entrepreneurs build and expand their network.

There are tons of industry events that are almost tradeshow-like in nature–with tons of vendors, attendees can walk the floor to connect with featured businesses and then funnel into large conference halls to listen to speakers. But I found myself having more fun at mastermind events and CEO summits. I wanted to create an event that embodied that spirit, where people came to make lasting business partnerships, find or become advisors and mentors, and, most importantly, learn together.

By prioritizing the value of community and collaboration, e-commerce conferences could become a breeding ground for revolutionary ideas, partnerships, and success stories.

What I Did

My team at Hawke created our own conference for this purpose. I noticed a gap in the industry–a lack of local e-commerce events designed to appeal to established executives looking to collaborate–and decided to do something about it.

And so, Hawkefest was born. My team and I created this annual e-commerce summit to provide ample opportunities for attendees to work and learn together in a hands-on environment filled with fun, peer-generated content. We created a space for executives to come together and learn from each other.

How You Can Do It Too

1. Carefully curate your audience.

At Hawkefest, we require all attendees to fill out an application, which then goes through a meticulous vetting process. While that might sound a bit pretentious and time-consuming, it ensures that the people who actually attend aren’t just job-seekers and vendors, but legitimate movers and shakers in the e-commerce industry. Our Hawkefest attendees don’t have to worry about getting hounded by sales pitches or buried under a stack of business cards.

In order to attract high-level minds and get them to drop their guard, your event should have an intimate feel. And that comes from a curated guest list.

By doing some of the grunt work up-front, you’re able to know exactly who is in attendance. This allows for your event to be a place filled with valuable conversations and meaningful interactions. Establish base requirements for attendees so that you can keep a pulse on the type of individuals who are planning to attend, making sure that list aligns with your overall goals.

1. Emphasize peer-to-peer collaboration.

You can lead a horse to water, but you can’t make him drink. And same goes for people at networking events. Just because they are all in the same place, does not mean that they’ll automatically be inclined to talk, mingle, and exchange ideas.

At Hawkefest, we encourage peer-to-peer conversations in a variety of ways. Hawkefest isn’t just a bunch of speakers one after the other with a “networking mixer” slapped in the middle. There are breakout sessions, roundtable discussions, fireside chats, team-building workshops, panels, and more.

By creating opportunities where communication, teamwork, and participation are encouraged, Hawkefest’s event structure helps foster collaboration. You can take your time when configuring your event schedule and make sure that the types of interactions are conducive to what you’re trying to accomplish.

1. Focus on your community.

With Hawkefest, we target companies and professionals in our Southern California community. By doing so, we’re able to bring together executives that are operating in similar conditions–be it a new tax law, consumer attitudes, or even the weather. Attendees are also much more likely to be able to follow-up with their newly made connections due to their close proximity. In fact, even a handful of even the speakers participating at Hawkefest have their businesses just down the road from the event space.

Additionally, becoming the centerpoint of the community you’re looking to create has long-lasting brand benefits. So, while it may be tempting to expand invitations to your event to a national or even global audience, consider focusing your reach to your immediate community.

COME TOGETHER

It may seem daunting to try to execute your own e-commerce or digital marketing event since that space seems so saturated. But if you adjust your scope to focus on the community around you, you may find that there is a need for localized networking event. I know it worked for us at Hawke Media, so it can also work for you.

If you’re in the SoCal area and want to check out what Hawkefest is all about, we’d love to have you! Apply to attend here.

[For more insight from Hawke Media click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Once purely a hobby of those worshiping men on cardboard, trading cards are becoming a true asset class—and the numbers show it, as the PWCC 500 Index, which tracks 500 of the most prominent sports cards, is up nearly 400% from 2020 through the beginning of 2022.

At the high end, records continue to break for the most expensive sports cards sold. The following is a list of such sales—a list that will surely be outdated soon.

 VINTAGE

1. Mickey Mantle 1952 Topps SGC 9.5: $12.6 million
2. Honus Wagner T206 SGC 3: $7.25 million
3. Babe Ruth 1916 Baltimore News SGC 3: ~$6 million (exact price unknown due to nondisclosure agreement)

ULTRA-MODERN

1. Steph Curry 2009 Panini National Treasures Rookie Patch Autograph: $5.9 million
2. LeBron James 2003-2004 Rookie Patch Autograph Upper-Deck Exquisite: $5.2 million
3. Luka Doncic 2018-2019 Panini National Treasures Rookie Patch Autograph: $4.6 million

 LARGEST MARKET CAP

1. Mickey Mantle 1952 Topps PSA 9: $73 million
2. Michael Jordan 1986 fleer PSA 10: $67 million
3. LeBron James Upper-Deck Exquisite Collection Patch Auto BGS 9/Auto 10: $49 million

Sources

https://www.csgcards.com/news/article/10234/most-expensive-sports-cards/

https://www.cnbc.com/2021/06/02/babe-ruths-1914-baltimore-card-valued-at-6m-breaks-price-record.html

https://www.pwccmarketplace.com/newsroom/pwcc-500-trading-card-index-outpaces-sp-500-fixed-income-and-debt-through-first-quarter#:~:text=The%20PWCC%20500%20Index%2C%20which,of%202020%20through%20Q1%202022

Https://www.cardladder.com

Syndicated and originally found on CSQ.com. The article, for reference, is here.

THE OPPORTUNITIES

What hasn’t changed?

Even though growth stocks have been suffering lately, the pace of innovation is accelerating. COVID accelerated the magnitude and importance of technology as a component of society. As the digital foundation of the global economy expands rapidly, it is enabling disruption in a matter of months. Microsoft CEO Satya Nadella said that, due to the COVID pandemic, two years’ worth of digital transformation took place in just two months. Businesses can now reach millions of users in the shortest time ever. The graphic below shows that it took airlines 68 years for their product to reach 50 million users. Thanks to digitalization and innovation, modern products like social media platforms and online games are reaching the same amount of users in a small percentage of that time.

As a result, disruptions can now affect business almost overnight, as newly formed innovators scale from $1 million to $100 million in sales faster and faster (see chart below).

Moreover, the capital expenditure (capex) spending on IT and R&D has accelerated in recent years. The chart below suggests that, within the tech industry, capex spending plus R&D as a percentage of sales has approached an all-time high of 18%.

The pace of innovation is accelerating and tech reinvestment is growing, yet most innovative companies are only just beginning to capture small portions of their total addressable markets. Thus, these runways are immense and ripe with opportunity. It is our opinion that there is still an exponential amount of growth to be unlocked in sectors such as cloud software, AI, and machine learning.

The cloud industry, for example, which includes software-as-a-service as well as infrastructure-as-a-service, currently represents only a small portion of the entire enterprise IT spending per year—approximately $234 billion of a $3.9 trillion enterprise IT industry. Cloud spending is set to occupy a larger portion of IT budgets over the next five years, taking overall cloud penetration significantly higher. Based on Gartner’s research, “enterprise IT spending on public cloud computing, within addressable market segments, will overtake spending on traditional IT in 2025”—a catalyst that will significantly propel cloud market penetration. “Demand for integration capabilities, agile work processes, and compostable architecture will drive continued shift to the cloud, as long-term digital transformation and modernization initiatives are brought forward to 2022.” The chart below from Gartner shows that expected growth in cloud revenue is on the rise and set to continue at a steep rate, whereas growth of traditional IT revenue has plateaued. This indicates that we are still in the early stages of the shift to cloud, with significant growth to be captured. This is just one example of an industry within the innovation space that is on a fast track of immense potential.

In summary, we believe we are in the early stage of the most disruptive innovation cycle in technology ever. The chart below shows that the AI-driven revolution has contributed around $2 trillion to global GDP in 2020, and has the potential to contribute up to $15.7 trillion by 2030. Specifically, labor productivity improvements are expected to account for 55% of all GDP gains from AI over the period from 2017 to 2030. AI penetration into the global economy has just begun.

DISLOCATIONS = OPPORTUNITIES

We have illustrated that most investors tend to focus on short-term cyclical events and allow them to dictate investment decisions. However, what they have ignored is just how impactful these innovative technologies will be to humanity’s everyday life. It’s a tug-of-war between short-term market sentiment versus deeply embedded innovation themes that will positively impact every facet of our lives.

Amazon is an example of a company that was not always a sure thing. Early in its existence as a public company, many Wall Street analysts had trouble understanding how the company was going to make money. Founded by Jeff Bezos, it evolved into an online e-commerce company that carries every product from A to Z. In the early days, Amazon had negative earnings every year as it kept reinvesting capital in the company to develop new products. In 2001, the dot-com bubble nearly destroyed many Internet companies, but Amazon survived and became a huge player in online sales. The stock, however, dropped 85% from the beginning of 2000 to the end of 2001, and then recovered 386% over the next two years. The company then expanded into the cloud service business via AWS and other areas such as groceries (Whole Foods) and streaming services (Prime Video). Through June 16, 2022 (the recent market bottom), Amazon’s stock was down 38%. However, as of the same date, the annualized return since the inception of the stock (May 15, 1997) is 32% compared to just 8% for the S&P 500.

This highlights that even the most promising companies go through tough periods such as the dot-com bubble and the global financial crisis, yet can emerge as long-term winners thanks to their commitment to innovation and continued reinvestment into the business.

We understand with social media platforms such as Twitter and channels like CNBC being the main source of news and knowledge for the vast population, it is very easy to focus on controversial headlines that tend to be attention grabbers. People rarely have the time or patience to spend an hour or two reading a book or white paper like this one. If you turn on news channels today, you will probably feel as though the world is about to end—another COVID wave, the war in Ukraine, China lockdowns, inflation hits another high. However, what media outlets typically do not report is the recent drug invented that could cure a fatal disease or new software being launched that will dramatically increase workforce productivity—again, the list goes on. When there is too much pessimism in the market it tends to go to an extreme level. As Howard Marks mentioned in his memo, we need to realize that there are limits to negativism just like there are limits to optimism.

CONCLUSION

Challenges, dislocations, and opportunities represent cogs in a wheel that repeat themselves at various stages of economic and innovation cycles. As we have steadfastly repeated during the past several years in these articles, all three are in play now and the winners and losers will be defined by how you interpret and act during these well-defined dynamics.

Higher interest rates, inflationary concerns, inflated valuations, limited access to capital, and the long list of geopolitical events occurring around the world suggest more difficulty ahead. We are not in the business of handicapping how and when these challenges begin, accelerate, or end, but we are very much interested in understanding the macro environment in order to make sound, long-term investment decisions on behalf of our clients and our own investable capital.

The many “dislocations” are typically what creates opportunity. The most glaring ones today relate to how the market is treating all technology companies the same, regardless of their growth rate, balance sheet, management teams, barriers to entry, or cash position. Indiscriminate punishment of all companies in a particular sector or industry is par for the course during “blow-off” periods of market corrections. We are seeing this in play now and look forward to seeing the companies that thrive after experiencing much adversity and market uncertainty.

As advisors to company founders, entrepreneurs, private business owners, and others who have played an integral role in building some great businesses, we have had a front-row seat witnessing why and how some businesses succeed and some fail. In our role as wealth managers, our responsibility is centered on making sure our client allocations are positioned to benefit from this unprecedented wave of innovation without subjecting the capital to undue risk.

SOURCES

1. Gillham, Jonathan. (2017). The Economic Impact of Artificial Intelligence on the Global Economy.
2. How Big Tech Won the Pandemic - The New York Times (nytimes.com)
3. The Fed’s Liquidity Confusion | AIER
4. One Year Into the Pandemic, Big Tech Is Bigger Than Ever - Bloomberg
5. After Covid-era boom, newly public tech stocks hit first major hurdles (cnbc.com)
6. S&P 500 doubles from its pandemic bottom, marking the fastest bull market rally since WWII (cnbc.com)
7. Pandemic-stocks: Covid drove massive market gains — what happens next (cnbc.com)
8. Tech Stock Valuations, COVID-19, And The Efficient Market Hypothesis: Enough Already | Seeking Alpha
9. Covid has made biotech companies the hot new tech sector as investor demand drives record IPOs (cnbc.com)
10. Microsoft CEO: "We have seen two years' worth of digital transformation in two months" - DCD (datacenterdynamics.com)
11. Howard Marks Memo to Oakree Clients: Conversation at Panmure House
12. Number of Years It Took for Different Products to Gain 50 Million Users (earthlymission.com)
13. Bessemer Venture Partners. (2020). State of the Cloud 2020. https://www.bvp.com/atlas/state-of-the-cloud-2020
14. Credit Suisse. December 2019. U.S. Equity Strategy Navigator. https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&sourceid=em&document_id=1081975521&serialid=4d5G6pkBcRgbhbjfabXIVlkbBEv40ngzw0LDTOzVpX0%3d
15. Gartner Says More Than Half of Enterprise IT Spending in Key Market Segments Will Shift to the Cloud by 2025

DISCLOSURES

The Standard and Poor’s (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization U.S. stocks. Individuals cannot invest directly in an index.

NASDAQ Composite Index (NASDAQ): A market-value weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market.

The Russell 1000 Growth Index (R1000 Growth): Measures the performance of the Russell 1000 companies with higher price-to-book ratios and higher forecasted growth value.

Oppenheimer & Co. Inc. does not provide legal or tax advice, but will work with your other advisors to assure your needs are addressed. The opinions of the author expressed herein are subject to change without notice and do not necessarily reflect those of the Firm. Additional information is available upon request. Investors should review potential investments with their financial advisor for the appropriateness of that investment with their investment objectives, risk tolerances and financial circumstances.

©Oppenheimer & Co. Inc. Transacts Business on all Principal Exchanges and Member SIPC 4920063

Contributors from The Summa Group to the content of this article:

Stan Yang, CFA

Valerie Yang, CFP

Savannah Pincus

Ben Norouzi, University of Michigan 

Syndicated and originally found on CSQ.com. The article, for reference, is here.

There’s been a lot of focus and scrutiny on the unclear, murky nature of today’s media buying practices – and for good reason. The most recent independent study by the Association of National Advertisers (ANA) revealed some startling, non-disclosed agency practices.

Allegedly, “various media companies offer rebates to media-buying firms in exchange for greater amount of ad dollars,” which could mean that “the potential allocation of billions of dollars in advertising may be influenced by a desire for a sort of kickback, rather than being done in the interests of big-spending clients,” as reported by Variety. What this means is clients are being either overcharged or underserved when it comes to media buying in order for the big agencies to make money off the top. As agencies are buying the advertising inventory, they are either marking up the prices or receiving either rebates from the media owners for spending a certain amount of money.

This has to stop. As marketers, it is our responsibility to maintain transparency and honesty when it comes to our clients.

THE IMPORTANCE OF TRANSPARENCY

There are now blurred lines between agencies that are only making money from clients and those that get markups from group deals. If practicing media buying correctly, however, you should have no qualms with making sure transparency about your practices is woven directly into the fabric of your business. Especially with the General Data Protection Regulation (GDPR) in play, all aspects of media buying should be held up to this standard.

With advertisers demanding better contracts with agencies, tightening up their programs, and establishing better relationships with ad tech vendors, transparency in marketing is no longer a question. It’s the norm.

As media specialists, it’s our responsibility to place our clients in the best position to succeed and be flexible when our industry shifts. Clients have every right to know where exactly their money is going and it’s our duty to provide them with accurate predictions, information, and expectations.

[To read more of Erik Huberman’s thought leadership click here]

MAINTAINING TRANSPARENCY

Our media buying experts over at Hawke Media pride themselves on maintaining open and honest communication with clients. Their clients have full optics into everything they do, from weekly verbal and written reporting to total access to ad accounts, which clients can view down to the keyword, campaign, etc. level to see where their money is being spent.

Here are some specific ways our media buyers maintain transparency with clients that you can immediately incorporate into your media buying practices:

1. Provide clients with a real-time reporting dashboard so clients have 24/7 optics to objectives and regularly share any additional data with clients.

Providing clients with a 24/7 dashboard that reports in real time is vital to maintaining consistent transparency through the entirety of the client-agency relationship. Having this dashboard allows clients to visualize how much is being spent, where it’s being spent, what’s performing, and where budget can be reallocated in order to achieve desired outcomes or get the most return on each dollar spent. Dashboards can be set up in such a way that reporting dynamically populates and updates from linked accounts. Clients can dive in as they please and see performance in real time. This ensures both client and agency are on the same page, with the same insight into budgets, metrics, performance, and results.

1. Give clients full account ownership.

Hawke never hides or keeps client ad accounts. Clients maintain ownership and have unrestricted access to accounts if they wish to personally view account performance, from an overview of campaigns down to the keyword level. If clients disengage with Hawke, they have full ownership of their accounts and don’t need to worry about not having full access to their campaigns, insights, and reports.

These accounts are paid for by the client and part of their brand identity. The accounts are rightfully theirs. Giving clients full account ownership is a no-brainer and should be one of the first things done to demonstrate a marketer’s honesty and transparency.

1. Create a partnership.

When a client signs with us, their designated Hawke team communicates strategy, ad copy, audiences, and keywords with the client prior to launching and during the optimization phase. These talks are collaborative and client feedback is not only heard, but implemented. It’s a true partnership.

This is done to ensure both the marketing team and the client are on the same page and that expectations are clear. It creates mutual trust and understanding to make sure that there aren’t too many revisions, making the process more efficient. There is a consistent dialogue around what is being executed and communicated to prospective customers.

1. Be an extension of your client.

In the most simple terms, be an extension of your client. Think how the client would think. Act how the client would act.

Marketers need to act in their clients’ best interests and understand client objectives, brand, and business model. That way, both parties are all aligned on overall goals, what needs to be done and why, and how it should be executed.

A MARKETER’S CODE

With so many huge advertising companies coming under increased scrutiny for their less-than-honest media-buying practices, it’s crucial that marketers maintain their morals. At this point, it is up to us as individuals and as agencies to ensure complete transparency when it comes to handling clients.

[For more on Hawke Media’s approach to Digital Agency click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here. 

The Great Resignation, where millions of people quit their jobs to seek out different opportunities, suddenly caused the job search and recruiting process to become an employee marketplace. Although a challenging time to find talent, as a business owner I learned to embrace it. I realized that, since the pandemic, the way we do business has forever changed and in order to grow and find success as a business, we have to rethink the way we are recruiting new talent.

Just as employees are leaving their jobs to find new opportunities outside of their normal industry or function, this is an opportunity for businesses to explore talent that they would not have otherwise considered pre-pandemic. Prior to the Great Resignation, for each role I would fill, the ideal candidate would have deep experience within the beauty industry. I would take one look at a résumé, and if the person didn’t fit that background, I would move on. However, I quickly realized that now is an opportunity to think outside of beauty and explore talent from other industries, who can bring a fresh perspective to my industry and business.

We recently hired a new VP of digital marketing who spent the majority of her career in technology and has only a few years of beauty experience. The constraints of the hiring environment forced me to be more open and take the leap. Her contributions and outside experience benefited our team immediately, and her tech experience brought a whole new level of thinking to our team and encouraged us to rethink our processes as well as the tools and platforms we are using to ensure we are effectively and efficiently maximizing our talents and resources. Since she joined the team, productivity has increased widely, and we’ve been able to grow areas of expertise for the brands we serve. We replicated this approach and hired talent from the fashion industry in our Influencer Marketing Department—and their background and expertise in driving sales through awareness programs has offered powerful results!

I’m thrilled to see our team grow, but even more excited to see how this diverse group of talent has really helped to evolve, shape, and grow Base Beauty Creative Agency as a whole. The effects of the pandemic will undoubtedly continue to roll out and it’s hard to predict what the future holds, especially during these unprecedented times. When it comes to recruiting new talent and growing a team, I encourage my fellow business owners to keep an open mind and take a chance on someone outside of your industry. The results might just surprise you.

Jodi Katz is the host of the long-running podcast, “Where Brains Meet Beauty.” She has been a respected voice in the beauty and wellness industry for over 20 years.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Despite being one of Los Angeles’ most well-known and critically adored Japanese restaurants, n/naka owner and chef Niki Nakayama fervently maintains the passion and innovation behind the presentation of “modern kaiseki” – a traditional multi-course Japanese dinner and personalized menu that resulted in a Season 1 episode on Netflix’s Chef’s Table.

CSQ How have things changed since your appearance on Chef’s Table?
Niki Nakayama Being on Chef’s Table has been wonderful … people are more aware of what kaiseki is and have a better understanding of what we are trying to convey at n/naka. Professionally, this understanding brings a level of validity to our work … personally, the sense of connection we’ve established with viewers has been amazing.

CSQ Talk to us about when – and why – you began personalizing your menu for each customer. Why is this important to you?
NN The idea behind personalizing the experience sprouts from our menu, which is a tasting menu. I am already asking guests to somewhat give up by not having choice. I find the element of surprise keeps the meal fun. I want to offer that feeling to repeat guests.

CSQ Diversity, you could argue, has never been more important – across industry. With that in mind, talk about the adversity you faced rising to your position here and now.
NN I’ve been fortunate and achieved success in a male-dominated industry. The most noted obstacle I faced was simply not being taken seriously, whether it was a product of my gender or not looking like your prototypical chef. On the other hand, there have been many subtle obstacles that I’ve chosen not to interpret as the result of being a woman but rather the natural obstacles one faces in the workplace. Unless it’s very obvious, I feel it’s best not to attribute anything to my gender, making it less defeating.

CSQ What more can be done to inspire young women to follow in your footsteps and continue to break the “glass ceiling?”
NN My advice to women would be this: When facing adversity or a noted setback, use the difficult experience as fuel to reach your ultimate goal. Do everything in your power to take a negative and turn it into a positive … make the situation better by examining how that setback or roadblock can ultimately help you grow.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

It’s a tale as old as time. A company is born. It outsources its marketing to an experienced agency that helps the company increase revenue and scale business. The company continues to see results from the marketing efforts of that agency and grows bigger. Everyone is happy.

And then the company reaches a point where it feels obligated to bring its marketing internal.

“That’s what you’re supposed to do right?” says the company. The company brings its marketing in-house and tries to replicate what that fully-staffed, expertly trained agency was able to do with a few new, in-house team members. It doesn’t work out great. Growth stalls. The company loses revenue and has to cut back on its marketing budget.

In my years in the marketing industry, I’ve seen this exact situation unfold numerous times. It’s normal for companies to grow, mature, and want to bring all their efforts internal. But I’m not sure when it became accepted as a best practice for companies to reach a certain level of success and deem it necessary to bring all their marketing in-house. I’ve personally seen dozens of companies make that mistake and then lose access to all of the market insight an agency brings to the table.

[To read more of Erik Huberman’s thought leadership click here]

On average, at my company, Hawke Media, our clients’ revenue increases by 274% within the first six months when we step in and take over marketing efforts. You know why? Because it’s literally what we are paid to do. And the low-hanging fruit that enable us to produce such incredible results so quickly aren’t seen by the internal team because they lack that outsider perspective.

Again, I’m not saying that companies aren’t capable or shouldn’t market themselves. But this misplaced obligation companies feel when it comes to bringing marketing in-house as some sort of right-of-passage can create some serious pitfalls in the long-run. Here’s why.

COMPANIES DON’T HAVE THE RESOURCES TO TRAIN AND DEVELOP A TEAM.

Most, if not all, CEOs know at least some basic marketing. But to truly get the best results, you want your marketing strategy to be handled by experts. With an agency, you’re able to have a team of professionals who are experts, not just in marketing in general, but within specific facets of marketing like email, media buying, or social.

Companies attempting to bring all of their marketing in-house seriously struggle with finding talent and 71% of in-house creative leaders say they don’t even have enough time to develop team members. This means that most in-house teams aren’t going to be anywhere near as trained, knowledgeable, efficient, and experienced as an external agency. Hiring an outside team allows companies the ability to fill that team with individuals who are experts specifically in the areas in which the marketing is focused.

In-house marketers often have to be Jacks-of-all-trades, whereas marketing agencies devote resources into continually educating their employees to keep them on the cutting edge of their specific marketing niche. At Hawke, we pay for our employees to attend General Assembly classes to freshen up or expand their skills, industry conferences so that they know all the latest research in the field, and any other ways they find to continue to develop professionally.

Unfortunately, most companies don’t have that kind of budget to spend on their marketing, which puts the in-house marketing team at a serious disadvantage. In fact, 75% of marketers believe that their lack of skills is impacting revenue. Agencies satisfy this issue by providing a diverse team with the education and experience to get the job done.

THEIR BUDGETS BECOME RIGID AND FLEXIBLE.

A static budget is not an adaptable budget. This is the real world. Things aren’t always going to go to plan. Flexible budgets are able to adjust when that change inevitably happens. The Motley Fool said it best: “A flexible budget can handle that reality and better position a company for the challenges of the marketplace.”

At Hawke, we understand the tumultuous nature of the ecommerce industry and we don’t want our clients to feel like they’re trapped into these long, expensive contracts. That’s why we offer all our services a la carte and on a month-to-month basis. Clients are able to adjust budget and add or take away services without any contractual obligations. If they need to cut back on marketing efforts during their slower months, they can. If sales have been incredible and they’re ready to scale up, they can do that too.

Companies need to be ready and able to adapt at a moment’s notice. Having an outsourced marketing team allows for immediate mobilization because you have instant access to a team of specialized, experienced marketers. It also allows brands the opportunity to be bolder and more creative since there’s no long-term commitment.

THEY STRUGGLE TO SEE THE FOREST FROM THE TREES.

Agencies have an outside perspective and are going to be much less biased than an in-house team. In order to successfully market to current and prospective audiences, you’re going to need to be able to put yourself in their shoes in order to assess what exactly they need. An agency is going to provide a much more objective perspective.

Additionally, marketers at marketing agencies are in the trenches day in and day out. They work with numerous clients and have a large network of vendors and channels. These people know what they’re talking about and have the experience to prove it.

In fact, even companies that have in-house marketing teams will work with outside agencies. According to the 2018 In-House Creative Industry Report, at least 77% of in-house teams partner with external agencies, which tells you that even solid internal creative teams need outsider advice to keep that needle moving.

AND THEY LOSE VALUABLE TIME AND RESOURCES IN THE PROCESS.

Time is money. Literally.

An outsourced team is going to provide a faster speed to market than an in-house team since marketing agencies have larger staffs, a plethora of resources and the expertise to churn out quality deliverables quickly. Agencies have to be efficient, as they are results-driven, and employees are used to juggling and prioritizing the needs of different clients. The processes already established at these agencies allow them to produce high-quality work on deadline and within budget.

Additionally, hiring an outside team is exponentially cheaper than recruiting, hiring, onboarding, training, and paying an in-house team. Bringing on a firm makes it easier for companies to scale up if things are going well, as well as cut back or go a different route if the company isn’t happy with the agency’s results.

THE PROOF IS IN THE PUDDING

Outsourced marketing teams are built specifically to deliver exceptional results in an efficient manner

At Hawke, we’ve seen client revenue per day grow by as much as 3,500%. Even with an established brand like Tamara Mellon, we were able to make an impact – increasing the brand’s revenue per day by 280% and overall revenues by 50%.

The allure to owning and bringing all your efforts in-house may be tempting, but it just doesn’t make sense. Of course, the decision to outsource or not must be addressed on a case-by-case basis and influenced by your company’s specific needs, but we’ve all heard the saying, “If it ain’t broke, don’t fix it.”

If you’re seeing great results with your outsourced marketing agency, there’s no rule that states you must transition to in-house just because you’re finally seeing some success. Stick to what you’re great at and let the experts handle the rest.

[For more insight from Hawke Media click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

The ability of elite financial advisors to deliver timely, high-quality, and actionable guidance with regard to all aspects of a family’s wealth management agenda is what often distinguishes them from the pack of advisors who operate with a more narrow focus.

We recognize the importance our clients place on investing their philanthropic dollars. The time spent deciding these matters, within their overall financial strategy, is important to them. We often advise clients on the portion of their wealth that can be allocated to philanthropic giving, yet we have been fairly hands off when it comes to directing where our clients give their time and money. Traditionally, clients identify with several types of recipients: an alma mater, friends’ or colleagues’ nonprofits, organizations addressing specific and meaningful programmatic areas, or their own charitable organizations, such as family foundations used to grant funds.

[To read more of Brian Werdesheim's thought leadership click here]

With more than 1.8 million active nonprofits in the U.S., finding the right grantee and doing the due diligence of the charitable and financial standing of each takes time, knowledge, and expertise. The process typically includes examining an organization both internally with their staff and board as well as externally with the IRS. Additionally, setting up a traditional foundation requires an extensive amount of administration to handle the legal, tax, and financial management, let alone identifying and selecting recipients of quality. This landscape had not changed for much of the last 30 years—until recently.

The rapid growth of donor-advised funds (DAFs) over the past few years, and the rise of “impact investing” in social enterprises and funds, has given donors a whole new set of options when it comes to thinking strategically about their charitable contributions. We see an important new role in helping our clients navigate these options, identifying the most beneficial and effective vehicles for their family and financial situation.

As lifelong partners to our clients and their families, we discuss an array of needs, work with their trusted advisors, and develop a plan for education, healthcare, and retirement. Now we are adding philanthropy to that list to bring structure, education, and guidance as they navigate the rapidly evolving dynamics of charitable giving.

In response to our clients’ needs, and to educate ourselves on the current landscape, we have begun to work with Leah Bernthal, an experienced nonprofit executive and philanthropic strategist in Los Angeles. Together, we are working to address the varied needs, abilities, and goals of those who are charitably inclined, who don’t have the comprehensive knowledge, time, and/or ability to implement their desired intentions.

Charitable conversations usually come up when there has been a financial windfall—athletes who have signed a new contract, writers who have sold a script, actors who have secured a TV series, founders who have sold their company, or families coming into an inheritance. The sudden influx of dollars not only requires much planning but also leads to questions about charitable donations and tax deductions. Many high-profile athletes and entertainers start a foundation to channel funds and awareness toward a specific mission close to their heart while simultaneously generating positive PR and media. This is a great option for clients with these dual goals. We also see many clients establish family foundations at this time—setting up a vehicle for their values and funds to support impactful nonprofits for generations to come. However, as mentioned above, foundations require a high level of oversight and administration, as well as knowledge about charitable organizations that align with mission and funding goals.

Think of a donor-advised fund as a charitable investment account. You contribute any amount-— from thousands to millions-—and receive an immediate tax deduction. Your funds are then invested for tax-exempt growth to help increase your long-term philanthropic dollars.

“The level of engagement to establish and maintain a foundation works well for some individuals—it provides a sense of ownership, purpose, and true connection to a specific mission and grantees. But the ongoing administrative requirements and overwhelming number of nonprofit organizations can be a daunting deterrent for other potential donors,” explains Bernthal. “Contributions to donor-advised funds (DAFs) have surged since 2012 because they offer individuals a turnkey, tax-advantaged, tech-savvy ­alternative to setting up a traditional foundation. DAFs are very attractive to the modern donor and are changing the face of philanthropy.”

Think of a donor-advised fund as a charitable investment account. You contribute any amount—from thousands to millions—and receive an immediate tax deduction. Your funds are then invested for tax-exempt growth to help increase your long-term philanthropic dollars. You have complete control over where and when those funds are distributed to nonprofit organizations, allowing for time to understand philanthropic priorities, research grantees, and modify giving, to align with your interests and financial situation at each stage of life. DAFs accept a wide variety of assets including cash, stock or mutual fund shares, cash equivalents, private equity and hedge fund interests, real estate, art and certain complex assets (such as privately held C-corp or S-corp shares) which provides the flexibility to truly customize your contributions over time. DAFs are a convenient, tax-advantaged platform to kick-start your philanthropic plans.

Additionally, we are beginning to encourage our clients to think beyond charitable donations and to consider impact investments as part of their philanthropic portfolio. Impact investments are opportunities that help create social and environmental change, fuel innovative and often tech-driven solutions to global challenges, with the goal of producing financial returns. A recent study by the Global Impact Investing Network reported that the rising pool of impact investing assets is nearly $114B in assets under management.

The Summa Group of Oppenheimer & Co. Inc., and other leading wealth management teams, often find that their clients are so busy with work and families, and so talented at what they do—especially in sports and entertainment—that we have become a trusted resource to help them identify worthy charitable giving vehicles for their needs and priorities. We are also a sounding board for discussions and decisions relating to recipients. This has not traditionally been a skill set housed in a private wealth management firm, but it has led us to begin thinking about our clients’ philanthropic portfolio in much the same way that we think about their financial portfolio—where and how to “invest” dollars to help achieve the most impact in the social areas they want to influence and see change. There are many similarities when looking at the due diligence performed on money managers and non-profits. We apply both a qualitative and quantitative evaluation effort when analyzing the merits of an investment strategy, and the same can be said about evaluating the nonprofit world.

“In order to design a strategic and impactful philanthropic strategy, it is important to understand each client’s story, values, and goals—the issues that move them to action, the communities that they want to impact, the time they want to commit, the legacy they want to leave,” says Bernthal. “What do they and their family want to see accomplished in 10, 20, 30 years? They should be able to look back on the philanthropic dollars they have invested and the time they have volunteered and clearly see how they have made a difference.” Leah can add a whole new dimension to our conversations and relationships with our most important clients. Being able to have a high level and highly educational conversation with the parents, kids, and sometimes even the grandkids about their legacy, and how best to make an impact, is very rewarding for everyone involved.

People who have reached the pinnacle of success in the world of entertainment and professional sports have gotten there for a reason. Focus, grit, talent, and sacrifice have been the cornerstones of their achievement, and therefore their attention has not necessarily been on philanthropy and giving. Success in attaining long term financial independence and security is often a function of the strength of their legal, tax and financial advisory relationships. Top advisory teams like The Summa Group work in concert with a family’s most trusted advisors to help bring order and discipline to all aspects of their financial and philanthropic objectives.

We are beginning to delve into these issues with our clients to help develop a strategy for their giving, and to measure the impact of their philanthropic portfolios. We are excited to be paving the way for the next generation of generous individuals to use their wealth for the greater good

[For more on The Summa Group's approach to Wealth Management click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Within the world of wealth management, few things are more coveted than the depth and versatility of a team’s planning process. Throughout this article we will demystify the planning process and share our thoughts on current trends that can be extracted from the past and present to provide insights about the future of planning and how elite teams approach this important subject matter.

Unfortunately, there is a long history in our industry of using financial and estate planning to create some sense of urgency to buy a particular product or strategy. High-pressure salespeople were very skilled (and still are) at using rudimentary illustrations and simple charts in an effort to justify the sale of a product that often served to enhance the advisor’s bank account more than the client who was buying the product. Maybe you have some recollection of going through this exercise many years back. If so, you likely recall how most of these plans pointed you to a particular product with high fees, a lot of complexity, and a story that always sounded too good to be true. Whether an annuity, proprietary fund, or some insurance policy, the commission the “salesperson” earned was often more important than the benefits delivered to the client. This dynamic is still present today, unfortunately, but regulators have made it more difficult for advisors and their companies to engage in such tactics.

[To read more of Robert Dalie’s thought leadership click here]

Many financial plans presented in the past were nothing more than slick presentations telling a story that always led to a product sale. The starting point was typically a future goal (often unattainable) and a simple scenario: how much money you needed to invest, and how much insurance you needed to back it up. This was usually combined with an overly simplified suitability determination questionnaire that “pigeonholed” you into a specific allocation or firm-owned product.

While the intentions of these advisors and financial institutions may have initially been honorable, the path toward selling a product to complete the process took center stage. So why did this happen? Part of the problem resulted from a lack of coordination and collaboration between clients’ trusted tax, legal, and investment professionals. The higher the levels of wealth and complexity, the more typical it is for multiple advisors to be involved. The coordination of all parties involved often becomes disconnected and polluted with conflicting agendas. Inadequate planning in one silo could potentially negate sound and highly effective work done elsewhere. In addition, the culture at many firms was driven by an intense push to sell proprietary products from the top down. These bottomline initiatives encouraged advisors to push proprietary products, which generated higher profit margins to their firms.

A misconception in the marketplace is that you need to hire a certified financial planner (CFP) to create a complex plan, which may cost thousands of dollars. The reality is that you don’t need an expensive, 100-page financial plan that shows your net worth, a bunch of graphs and charts, and how much money you are going to have when you are 95 years old.

Here’s the good news: More and more advisors and their respective firms are starting to realize the flawed nature of their planning practice, and are having healthy discussions to improve their processes. Today, having a plan with the flexibility to deal with changes and real-life issues is often more critical than the actual strategies implemented. These strategies are based on cash flows and tax impact, rather than insurance and investments, and can effectively deal with multiple scenarios. This process integrates and coordinates all forms of planning. Planning based on cash flow addresses fairly simple questions: Are you able to live your preferred lifestyle? Pay your bills and obligations or go on that bucket-list trip? The size of your balance sheet isn’t as important as living the life you want to live. It all boils down to planning for multiple scenarios and objectives that may come into play today and into the future.
Life is in fact very unpredictable, but the more thought and strategy given to the likely real-life events, the more prepared everyone will be for the future, and this of course creates peace of mind that you cannot put a price tag on. The goal of this approach is to address potential scenarios now, and down the road, to prepare for all of life’s “consistent inconsistencies.” It endeavors to quantify freedoms—the sole focus should not be on saving as much as you can, but on determining the specific freedoms you consider priorities, allowing you to enjoy guiltlessly what you have sacrificed and worked so hard for. The core of planning should be focused on the process, not the plan. It really boils down to two simple questions: What is your money for, and when do you need it?

A misconception in the marketplace is that you need to hire a certified financial planner (CFP) to create a complex plan, which may cost thousands of dollars. The reality is that you don’t need an expensive, 100-page financial plan that shows your net worth, a bunch of graphs and charts, and how much money you are going to have when you are 95 years old. This is not to suggest that planning should be oversimplified and lack the depth necessary to execute at a high level, but many are on the other end of the spectrum of complexity and think it’s a one-time exercise that doesn’t require ongoing supervision and revision. Elite teams working with families that have some complexity in their lives understand the very fluid nature of life and therefore take a proactive approach in their communication in order to always understand the mission-critical factors of executing the short-, medium-, and long-term components of the plan.

[For more on The Summa Group’s approach to Wealth Management click here]

As for the future, we believe that technology and innovation are both profoundly disruptive forces within finance. The rate of creation, adoption, and use of new fintech has and will continue to evolve within the wealth management industry. There is an enormous gap between what a human advisor can do versus the most sophisticated current technology. One simple example would be the technology for data aggregation and screen sharing. We know that most people would like a written plan but they increasingly want it to be interactive and collaborative, and not a static document. Forward-thinking advisors have started to explore using cutting-edge tools to collaborate on documents remotely, while adapting them to various scenarios on the fly. No longer does geography prohibit us from doing business with anyone, anywhere. It’s not just remote access, but advanced data analytics, aggregation, artificial intelligence, and algorithms that will continue to push the planning envelope. In the not-too-distant future we will have sophisticated software that can connect an advisor to a client when his family members are getting married, kids are getting engaged, or there is a death. We will be proactively connected at the right time to the right people with the right information, to coach and provide impactful guidance during very specific life events. This is very exciting and is the future of planning in our industry.

On a positive note, conflicting agendas and self-serving sales practices are rapidly being replaced with thoughtful planning and coordination that puts the family’s interest’s front and center. Elite advisory teams understand the mission-critical nature of working closely with a client’s most trusted advisors in order to deliver a plan that speaks to myriad qualitative and quantitative aspects of their lives. Technology, regulation, and transparency are helping pave the way for a much more robust and ethical planning environment today and into the future.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

MARKETING FIRST

We live in a marketing-centric world. Each time we step out of the house, we’re bombarded with subconscious marketing tactics from the ground up. From the foods we eat to the shoes we wear, companies use subtle suggestions to prompt us to buy their product.

It’s no different for the online world. How many times have you scrolled through a website before becoming uninterested within seconds? Clicking the “X” in the top right corner is so common, it almost feels like we do it on autopilot. The opportunities are endless.

So, how do companies keep customers engaged? What is it about certain websites that keep us hooked and willing to stay?

Crafting a killer website is no small feat. In this article, I explore a few ways you can create your next event website that will be sure to keep people engaged and willing to click through rather than click out.

ALL ABOUT BRANDING

It goes without saying that great branding is memorable. Even from a distance, we all know a Nike logo on a pair of shoes or an Apple computer at a coffee shop. Branding your event webpage is no different. You want customers to immediately engage with a website upon first visit. Knowing your brand strategy will help with that. The best event websites focus on the customer needs, are regionally specific and recognize the user. They also have clen, clear copy that is bold enough to read.

The look and feel of a website is an important part of that strategy. You want customers to associate your brand with the event. Your company logo and other branding materials such as images or graphics should be at the forefront of the website’s design. Visual presentation is everything. When it comes to crafting a memorable event website, looks are a huge part of it but also important to craft a killer value proposition. Customers will be able to understand the tone of the event and will be engaged from the very first click but they need to know the number one reason to attend. Design with that in mind.

EASE OF NAVIGATION

Once you’ve got branding under control, make sure your website is simple and efficient. Think of your own patience when it comes to a slow-loading webpage. How long are you willing to wait for information to be available? According to one study, many consumers aren’t willing to wait more than 3 seconds for a page to load.

So, when it comes to creating an event website, be sure to design with speed in mind. Quick access and fast scroll capabilities will help keep customers engaged. The next step is customer sign up.

Getting customers to sign up for your event is the ultimate goal. To that end, making sure the website itself is easy to navigate will make a world of difference. If your webpage has difficult to find sign-up buttons to register or links to find the agenda or themes of the day, customers will likely click through and they’re on to the next. The best event websites are designed with persistent or “Sticky menu” navigation and are an essential part of the structure of a modern event website. The most common is a fixed top navigation with an always present registration button so the user can still see it as they scroll the page. Sticky headers and navigation work best on websites that are action oriented like events. The best event websites have persistent navigation that can always be accessed for speakers, exhibitors, attendees, agenda and travel. Design your website so that customers can easily register and navigate through any sections on the website.

Slow or clunky websites simply don’t drive engagement in our age of instant gratification. Make sure your event website is simple to explore and understand.

USE VIDEOS

Video clips are an excellent way to engage customers to an event webpage. Rather than reading through large blocks of text or navigating to multiple drop-down options, users can simply watch a short video explanation of what it is the event plans to offer. The best websites are exciting through videos and visuals. They create teaser videos from past events or leverage speaker advocacy from their best speakers or attendees to draw the user in. They also have movement through animation or video.

Videos can help create excitement and anticipation for an event through visual aids.

In 2020 alone, nearly 245 million users watched digital video forms of content. Due to a global pandemic, that number has likely risen with the virtual event space expansion. In our digital age, video options simply make sense.

Make sure the videos you do use are responsive to both cell phone and computer use. Promotional videos on the website can also be utilized on social media accounts for increased engagement.

ADD CONDITIONAL POP-UPS

The best event websites are also adding effective pop-up overlays to reduce bounce rates, capture visitors information and market early bird offers or send users a more detailed agenda to customize their journey. There are numerous tools you can use to add effective pop-ups to your event website, including OptInMonster. The best event websites are personalizing the experience to show the right message to the right user at the right time. These include geolocation, and distinguishing new vs returning visitors.

LEVERAGE RETARGETING ADS

Retargeting can take a number of different forms. Event prospects rarely register on their first visit and the best event marketers recognize this and build a relationship with the user. Event marketers can place a pixel on their website that tracks its visitors and then target them with display ads while they are online. With the right technology, users can segment digital audiences based on various activities and attributes and correlate them with specific marketing messages. For example, you can highlight the speakers and reinforce their credentials or remind them of a must attend session or specific early bird offer. The best event marketers are retargeting users by persona and whether they have attended the event previously.

SIGN UP HERE

Whether you’re planning an in-person, hybrid, or virtual event, the first step toward engaging your customers is to ensure you’ve created a killer event website. From branding to usability and everything in between, there are a number of tactics you can use to be sure customers will click through, stay engaged, and ultimately say ‘yes’ for the event sign up.

Proper marketing and branding will help grab a user’s attention and ease-of-use and a good layout will help keep them from clicking out and onto the next. Strong visuals and communication are key. A good website acts as a deciding factor on whether or not your potential customers will sign up.

The old adage “you never get a second chance to make a first impression” rings true when it comes to crafting a killer event website. You want to be sure your agenda page stands out among the crowd and is easy to digest. By following any of the tips above, you’ll not only create a great first impression, you’ll likely stand out from the crowd.

James Karklins is a lead generation and audience marketing expert with over 15+ years of experience in lead generation, audience growth and virtual events

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Los Angeles based start-up Brightmind is promising to offer overwhelmed professionals frazzled by the demands of daily life the opportunity to improve health and wellness with a guided regimen of meditation instruction through an innovative new application.

Founder Shinzen Young, a recognized authority in mindfulness and a neuroscience research consultant, has developed a new tool that employs a blend of advanced algorithmic approaches and ancient wisdom to calm the mind, refine the senses, and contribute to more peaceful, productive, and fulfilling lifestyles.

Brightmind is backed by a group of skilled and committed meditation practitioners and teachers. The dedicated team was formed to support Young in materializing his vision of offering a tailored and affordable meditation experience to users internationally, at a scale that has only recently become possible with the aid of rapidly advancing mobile technology.

“When I leave retreats, it’s always bittersweet,” says Young. “As a group and individually, the participants grow a great deal during our time together, but I know that if I could split myself into pieces and help each student on a daily basis, their practices would grow with great rapidity and be incredibly transformative.”

Young’s unique and structured approach to meditation research and instruction inspired research partnerships with Carnegie Mellon, Harvard Medical School, and the University of Vermont, as well as collaborations with other notable organizations.

The App offers a simple and straightforward user experience that is tailored to each user’s unique needs and personality. For professional firms and executive management teams, it provides an efficient tool to help boost employee performance, memory, and often, overall happiness.

TRANSFORMATIVE CURRICULUM, PERSONALIZED MEDITATIONS, AND SELF-PACED PROGRESS

Shinzen’s instruction is renowned for a highly interactive and scientific approach that guides students in addressing personal goals and overcoming individual challenges, pushing forward their meditation progress. The curriculum has been developed and refined over decades of training and experience in cross-discipline meditation techniques, with a foundation in Buddhist teachings.

With the Brightmind app, users learn a variety of meditation techniques to find the ones that work best for them. In the future, the app will incorporate advanced data analytics to adapt to and deepen the user experience. Each session builds on the selections of previous sessions.

The app provides learning, guidance and accountability, while also allowing self-paced progress. Brightmind makes learning meditation easy for busy professionals. It enables participants to achieve a productive and satisfying meditation experience in their own home or office that would otherwise cost thousands of dollars and often require travel to a distant location.

The app is currently available in the Apple App Store and will soon be released for Google Play. Visit Brightmind to learn more about the health and wellness app.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

The pace of innovation in the technology sector continues to accelerate while having a massive impact at the company, industry, and global levels. Twice during the past several years, I have shared my views on what many refer to as the Fourth Industrial Revolution. My first featured article on the subject, “The Industrial Revolution of the 21st Century” (November 2019), discussed the embedded themes of artificial intelligence (AI), machine learning, and big data, and how every industry is being disrupted by these irreversible trends. My second article, “Innovation, Disruption and Opportunity” (March 2021), provided a historical perspective on past industrial revolutions and why the current one is different.

Fast-forward to the summer of 2022 and a lot has changed regarding valuations, the appetite of private equity for investing in innovation, and what the road ahead may look like. As with any period of rapid innovation, opportunity, and capital formation, the journey takes many turns and is never without challenges. As of the writing of this article, there are a number of factors impacting the pace of investment, valuations, and the futures of public and private companies. I will share our views on the challenges, dislocations, and opportunities that have materialized as a result of this pendulum swing. Having been an observer of capital markets for more than three decades, my perspective is based on personal experience of investing billions of dollars of capital during many dynamic and challenging market cycles.

Our team is dedicated to differentiating between what is real and what is imaginary. Our conviction levels with regard to the opportunities materializing as a result of this unprecedented era of innovation are unwavering during this period of pause. We will look back at the late ’90s and early 2000s for comparisons and contrasts to the current period. While history rarely repeats itself precisely, it often rhymes. Many of the most prolific companies today were left for dead after the dot-com bubble of 2000. We do not think this period will be much different; when we look back at current valuations, we will find truly magnificent companies were trading at dirt-cheap prices. With a rapid pace of innovation comes rapid obsolescence and therefore there will be plenty of “roadkill” along the way. With an eye on the past and a focus on the future, we are providing discipline and guidance on how investors should be capitalizing on one of the greatest periods of innovation in history.

THE CHALLENGES

In 2002, the technology industry emerged from the dot-com crash in complete decimation, with a bleak outlook on its future. However, two decades later, technology and innovation are at the center of almost every industry. We believe this transformative wave of technological innovation, often referred to as the Fourth Industrial Revolution, will fundamentally change the way we live, work, and interact, and will disrupt businesses globally. That said, the innovation space and the broad tech industry have not been immune to short-term challenges.

The tech-heavy S&P 500 experienced an exponential recovery during the pandemic, doubling from its March 2020 bottom in under a year. The perfect storm of low interest rates and massive bond purchases by the Fed created an environment that was simply unsustainable. Valuations got ahead of fundamentals while investors succumbed to a FOMO (fear of missing out) mentality.

As markets began to realize that the pull forward in technology demand from COVID was not permanent, growth stocks also braced for another headwind: the end of easy money. In mid-2021, the Fed still viewed inflation—which resulted from unprecedented levels of fiscal stimulus, monetary easing, and supply chain disruptions throughout 2020 and 2021—as transitory. As this narrative proved not to be the case and inflation persisted, the Fed changed its tune in November 2021, planning on hiking rates, fast. The 10-year U.S. Treasury yield nearly doubled in a matter of four months to begin 2022. This put valuations front and center—and the very same tech/growth darlings that skyrocketed in the COVID boom fell into a sharp sell-off in January 2022. As inflation persisted and rates climbed higher, the first half of 2022 was marked by a turbulent decline of the tech/growth space, one that can only be likened to a reversal of the pandemic-induced tech boom that occurred just two years earlier.

So, what do rising interest rates have to do with innovative companies? A vast majority of the companies in the innovation space tend to be high-growth companies that are priced based on future earnings. These companies are heavily reliant on capital for future business expansions, and thus utilize debt markets in order to finance their growth. Valuations then must reflect the change in borrowing costs thus negatively affecting stock prices. Investors that once shrugged off excessive valuations due to low interest rates now seek undervalued, cash-flowing businesses. “What can you do for me in 10 years?” quickly becomes “What can you do for me now?”

The destruction of valuations in the public markets in the first half of 2022 did not come without consequences. These start-up tech companies that benefited from heavy investment and massive initial public offerings (IPOs) during the pandemic are now struggling with growth and profitability in the face of a tight money supply and high inflation, with global uncertainty looming. Companies that received multibillion-dollar IPO valuations in 2021 were laying off employees by the hundreds and struggling with profitability not even a year later. IPOs have grinded to a halt in 2022. Private investment in innovation, once accompanied by the “blank check” mindset, has done a complete 180, and start-ups are now struggling to raise capital. Let’s be clear, this outcome was highly predictable and is consistent with past periods where optimism dominates and risk controls become lax.

As seen over the course of history, challenges are inevitable. These challenges, however, ultimately present opportunities for investors to capitalize when valuations are depressed and fear is at its highest level. This time is no different. To be successful in this endeavor, we must observe the challenges, identify the ensuing dislocations, and take action on the opportunities. We will discuss current dislocations at play in the next section.

THE DISLOCATION

As market dynamics changed at the beginning of 2022, many investors were caught offside. This in turn caused panic selling in the tech/growth space. Higher multiple stocks were dumped in exchange for less expensive positions. This was not because the higher-growth businesses no longer provided intriguing long-term benefits, but rather that they simply posed more risk in the immediate term. This near-term mindset has created an environment where innovative companies—and tech/growth in general—are being disproportionately penalized.

In the first half of the year—or up until June 16, 2022, specifically, which was the date of the recent low—the Nasdaq Composite Index and Russell 1000 Growth Index, both of which are technology dominant, sold off much more significantly versus the broader equity market (S&P 500).

After three consecutive years of strong returns in the stock market (particularly in the growth area), moderate pullbacks were expected, but the severe sell-off we witnessed in the first half of this year is indicative of an underlying dislocation: Valuations are not reflecting strong company fundamentals.

With respect to high-growth companies, many stocks have been punished severely for a lack of earnings visibility and/or not beating earnings expectations. For multiple decades, many growth-oriented companies within the innovation space have been engaging in the “land and expand” strategy, which basically means starting small with your customers, gaining their trust, then expanding into other areas of their business. To say it another way, land as many customers as you can early and expand the relationships (“first-mover advantage”). To accomplish that, most growth companies put a significant portion of their revenues into business reinvestment in order to sustain growth (mainly via sales, marketing, and R&D efforts), but reinvestment dampens earnings from surface level, which effectively depresses the company’s valuation. Historically, fast-growing companies will reinvest most, if not all, of their free cash flow back into the business in order to grab market share and expand into other strategic business opportunities. In the short term, this can negatively impact how they look on paper. Today, the market is not differentiating between companies truly dedicated to a long-term runway and companies solely focused on meeting quarterly numbers.

Let us examine the dislocation between current valuations and company fundamentals from a psychological perspective. In one of his memos, Howard Marks of Oaktree Capital talked about “pendulum,” not as a mechanical model (which is predictable in terms of time and pace) but more as “mood swings.” Applying this concept to investor psychology, investors can certainly become euphoric at times and downright miserable at others. That said, these swings to either extreme are not the norm—the majority of the time, the pendulum remains in a realistic middle territory. This middle ground is where investment decisions are made based on fundamentals rather than emotion. We saw market euphoria throughout 2021, and now we seem to be near or at the other end—the miserable end—of the pendulum.

In this type of difficult environment, the average investor tends to panic and exit the market (the “get me out of here” mentality), usually at the wrong time. We’re seeing this phenomenon play out across many types of assets—stocks, bonds, bitcoin, etc. Investors have been selling indiscriminately, or “throwing the baby out with the bathwater.” Particularly with respect to growth stocks, investors have not been distinguishing between high-quality growth stocks (those with healthy profit margins, low debt, steadily growing revenues, etc.) and low-quality growth stocks (those with low/no profit margins, high debt, etc.) during this year’s sell-off. If history is any indication, post-capitulation is where we will again see a focus on fundamentals and a market that rewards truly great companies. One important thing to keep in mind is that, as Howard Marks has said, while timing is uncertain, investor sentiment will eventually settle in a more stable place for an extended period of time.

As stated earlier, we are seeing a dislocation between the current valuation/price and company fundamentals, particularly among certain high-growth companies. For example, let us examine RingCentral and UiPath, two of the fastest-growing companies with a dominant market share. By every measure, these companies’ fundamentals look strong, yet their stocks have been punished severely this year—a clear dislocation!

This is not the time to run for the hills. In fact, the current dislocation in the stock market is presenting investors with tremendous opportunities, particularly in the growth/innovation space, if you have a mid- to long-term investment horizon. This is what we will examine in part two.

Brian Werdesheim is Managing Director of Investments with The Summa Group of Oppenheimer & Co. Inc., a wealth management company ranked as one of the top financial advisors in the United States.

SOURCES

1. Gillham, Jonathan. (2017). The Economic Impact of Artificial Intelligence on the Global Economy.
2. How Big Tech Won the Pandemic - The New York Times (nytimes.com)
3. The Fed’s Liquidity Confusion | AIER
4. One Year Into the Pandemic, Big Tech Is Bigger Than Ever - Bloomberg
5. After Covid-era boom, newly public tech stocks hit first major hurdles (cnbc.com)
6. S&P 500 doubles from its pandemic bottom, marking the fastest bull market rally since WWII (cnbc.com)
7. Pandemic-stocks: Covid drove massive market gains — what happens next (cnbc.com)
8. Tech Stock Valuations, COVID-19, And The Efficient Market Hypothesis: Enough Already | Seeking Alpha
9. Covid has made biotech companies the hot new tech sector as investor demand drives record IPOs (cnbc.com)
10. Microsoft CEO: "We have seen two years' worth of digital transformation in two months" - DCD (datacenterdynamics.com)
11. Howard Marks Memo to Oakree Clients: Conversation at Panmure House
12. Number of Years It Took for Different Products to Gain 50 Million Users (earthlymission.com)
13. Bessemer Venture Partners. (2020). State of the Cloud 2020. https://www.bvp.com/atlas/state-of-the-cloud-2020
14. Credit Suisse. December 2019. U.S. Equity Strategy Navigator. https://research-doc.credit-suisse.com/docView?language=ENG&format=PDF&sourceid=em&document_id=1081975521&serialid=4d5G6pkBcRgbhbjfabXIVlkbBEv40ngzw0LDTOzVpX0%3d
15. Gartner Says More Than Half of Enterprise IT Spending in Key Market Segments Will Shift to the Cloud by 2025

Contributors from The Summa Group to the content of this article:

Stan Yang, CFA

Valerie Yang, CFP

Savannah Pincus

Ben Norouzi, University of Michigan 

Syndicated and originally found on CSQ.com. The article, for reference, is here.

The importance of talent management is difficult to overestimate, and these issues have come to the fore with even more intensity in the past couple of years, mostly due to the COVID-19 pandemic and the subsequent “Great Resignation.” While organizations can implement numerous strategies to attract and retain talent in these difficult times, governments can also help organizations in this endeavor. Governments can systematically develop policies, programs, and activities expressly for the purpose of enhancing the quality and quantity of talent within their country to facilitate productivity, innovation, and competitiveness of their domestic and multinational enterprises. Those that choose this path for the benefit of their citizens, organizations, and societies will ultimately win the proverbial war for talent. Here is one example illustrating how that can play out—it deals with the war in Ukraine and some of its unintended consequences.

The collective West has reacted very swiftly to the unjust, unprovoked, and completely unnecessary Russian aggression against Ukraine by providing much needed humanitarian and military assistance to the Ukrainian people. The war has also brought about a lot of righteous anger toward the Russian government and its policies, which inadvertently led to some emotional spillovers, when a few hotheads demanded canceling everything Russian, from classical music, theater performances, and exhibitions by Russian artists to Russian food.

I argue that instead of shunning all Russians and everything Russian, the collective West should embrace those who are against the war, and whose talent—advanced knowledge, skills, and ability—may greatly benefit the West’s organizations and societies. This seems to be the most opportune time for Western countries to benefit from the exodus of Russian talent.

The war in Ukraine, besides its terrible humanitarian toll on the Ukrainian people, has prompted a profound shift in Russia as well—this was particularly reflected in the tightening of everything related to political life; further limiting freedoms of the Russian people to assemble, express their opinions, and protest against the war; and worsening economic conditions. These developments, along with the ever-increasing anti-Western hysteria on state-owned Russian TV, and diminishing economic opportunities, prompted thousands to consider leaving the country and seek refuge elsewhere. Faced with these mounting obstacles to their professional and private lives, a few hundred thousand people—mostly young, ambitious, and talented professionals—have left Russia since the war started in February 2022. As many as 300,000 Russians have left the country, with some experts estimating this number to double before the summer is over.

Most of these new emigres are young, urban, multilingual, and highly educated (average age of 32 and 80% with at least a bachelor’s degree), and they represent Russia’s most productive part of the labor force. What is even worse for Russia is that most of those who left are STEM professionals, with expertise that is badly needed around the world. Most of them are currently settled in Turkey, Georgia, Armenia, and a few Baltic countries, but are open to move to where jobs and opportunities are.

To try to counter this exodus, the Russian government has exempted, for example, IT professionals from mandatory military service, offered superior financial provisions, and promised to provide tax breaks. All these measures, however, did not really slow down or reverse the brain drain—apparently, only 3% plan to return to Russia in the coming months. This trend, in addition to a declining population and one of the world’s largest number of emigrants, will most likely lead to a further deterioration of human capital in Russian organizations, which will undoubtedly cause a loss of the country’s competitiveness and a decrease in standards of living, along with other short- and long-term consequences.

Coming back to my original point: Russia’s loss can be the collective West’s gain, and our governments can play a significant role here by formulating, developing, and implementing policies that facilitate efforts aimed at attracting top Russian talent.

One of the first initiatives in this direction was a recent plan by the Biden administration to cut immigration red tape by eliminating the need for Russians with advanced STEM degrees to get an employer to sponsor their visa, which would allow U.S. organizations to attract and retain Russian STEM experts in a much more efficient manner. It goes without saying, of course, that these potential immigrants should be well-vetted and deemed eligible from a national security standpoint. Another plan—that the UK called “Researchers Under Risk”—first aimed at Ukrainian researchers will now include Russian scientists as well. Similar initiatives directed at Russian scientists, engineers, IT professionals, and other valuable talent should be implemented by other governments, since steps like these will not only undercut Russia’s innovative potential in the long run and diminish its appetite for aggressive behaviors now and in the future, but will also benefit societies and organizations of those countries that open their doors to freedom-seeking Russian professionals.

Vlad Vaiman is Professor and an Associate Dean at the School of Management of California Lutheran University and a visiting professor at several premier universities around the world.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

The proliferation and integration of artificial intelligence (AI), machine learning, and big data is being called the fourth iteration of the Industrial Revolution. As with any disruptive force of this magnitude and long-term impact, there will be many winners and losers; many investment careers will be shaped by how individuals choose to participate in this revolution. As advisors to executives, private equity professionals, company founders, and others whose futures are tied to their ability to adapt and evolve, our team is immersed within the executive ranks and the companies helping shape the future.

Artificial Intelligence Is Not a New Concept

The history of AI dates back to ancient times. Thinking machines and artificial beings have appeared in the myths of most major civilizations for centuries, while philosophers and mathematicians have been developing mechanical or “formal” reasoning for ages. Since the 1960s two booms in AI have occurred, each followed by a period of slower progress. Currently, progress with machine learning and deep learning is driving an increase in AI diffusion.

The broad field of AI is the science of making machines or software smart. The phrase was coined in the early 1950s by American computer and cognitive scientist John McCarthy, who defined it as "the science and engineering of making intelligent machines." AI has become an essential part of technology and is increasingly doing the heavy lifting on the most challenging problems in computer science.

Our Connected Society Can Access, Decipher, and Act on Big Data Like Never Before

We are living in an exponential age, where ubiquitous connectivity and decreasing costs are leading to the digitization of most activities. The size of the digital universe is at yottabyte (10²⁴) level and 90 percent of the world’s data has been created in the past two years. The data created is projected to double every two to three years, with over 1 trillion connected devices by 2035. The untapped potential is huge given that less than 1 percent of data generated has been analyzed. AI will play a vital role in deriving new insights from this data and the new digitally connected economy.

[To read more of Brian Werdesheim's thought leadership click here]

Big data and AI are as foundational as the internet and smartphones. IT-driven productivity has the potential to boost global GDP by $15 trillion by 2035, $3 trillion to $5 trillion in economic value annually (according to Bank of America/Merrill Lynch), including a reduction in emissions, increased productivity, and improved healthcare. AI will be the single largest driver of tech spending over the next decade.

The scarcity of available labor resources is likely to significantly accelerate tech infrastructure investments to further boost productivity. During past labor shortages, tech spending spiked, and it is estimated to rise to 5.5 percent of GDP from the current 3.5 percent (BOA/Merrill Lynch). Recent breakthroughs in AI and machine learning are accelerating transformation. Computers are learning by themselves; software writes software, and algorithms write algorithms. The computer error rate in image recognition dropped to 3 percent in 2016, below the human error rate.

A Profound Impact on Our Workforce across Industries

Major challenges remain in harnessing the power of big data. In addition to privacy and cybersecurity risks, transforming into a digital business requires dramatic changes in skills, technology, organizational structure, and sometimes fundamental business models. Today the No. 1 barrier to adopting big data is the organization’s existing structure (54 percent of respondents), followed by resistance to change (52 percent) (according to Harvard Business Review). Around 70 percent of companies face a gap in integrating IoT (Internet of Things) into their existing business workflows (McKinsey 2017) .

Though still scaling up, big data is as foundational today as the Internet was in the 1990s, and mobile phones were in the mid-2000s. Beyond the hype of the recent past, we believe its breadth of adoption and influence are only starting to be felt. Alongside future mobility, the cloud, and social media, big data is at the heart of the global digital transformation and emerging technologies, such as machine learning, IoT augmented reality (AR), intuitive interfaces, autonomous vehicles, cognitive experts, and virtual assistants, with more to come. New business models such as the sharing economy, on-demand, and everything-as-a-service are also predicated on access to large data sets.

There will be many winners and losers; many investment careers will be shaped by how individuals choose to participate in this revolution.

The impact of the big-data economy will sweep through all industries, leaving disruption in its wake. According to a 2017 Harvard Business Review global survey of executives, an estimated 7 out of 10 respondents believe that their company has already passed the inflection point of disruption or will pass it by 2020. Around half believe their company’s traditional business model will be obsolete in three years. The average tenure for companies in the S&P 500 has been shrinking, from 33 years in 1965 to 20 years in 1990, and this is forecast to shrink to 14 years by 2026. Up to 50 percent of S&P companies could be replaced in the next 10 years (Innosight). Challenges will vary from sector to sector, with digital-native tech companies the most prepared for the data revolution (70 percent with formal digital strategies), versus healthcare (34 percent) and government (27 percent) (Harvard Business Review).

Making Sense of an Opportunity

Inevitably, an enormous amount of capital will flow into companies perceived to be best positioned to leverage this wave of technological innovation. While the fatality rate will be high, we will also have the Amazons, Facebooks, and Apples of this revolution and everything in between. An investor has many options when considering how to proceed. Index funds/ETFs, one-off private equity investments, private equity funds, and individual stocks are a few of the ways investors will deploy capital. Each has a vastly different risk profile so be mindful of the associated risks, liquidity, and volatility. Today, many well-funded and successful private companies are choosing to stay private and not pursuing IPOs. As a result, there are more mature privately held companies that represent viable opportunities. Thus, we are looking to invest with proven portfolio managers in the public and private sectors. Considerations for clients will always focus on liquidity, fees, transparency, diversification, and leverage before making a determination about how best to invest in this opportunity.

[For more on The Summa Group's approach to Wealth Management click here]

Our lives and future generations will be impacted in ways we cannot imagine by this perfect storm of big data, machine learning, and AI. We hope the quality and duration of our lives is positively impacted while creating wealth through thoughtful, prudent, and strategic investing.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Early in the history of family offices, there was a misconception that the purpose of the investment-focused family office was to exclude outside wealth managers. However, most family offices embrace a collaborative approach to serving their families’ investments, using a combination of in-house wealth management and outside wealth managers, with the ultimate goal of ensuring that the family is getting the best and most tailored investment advice for their circumstances, regardless of where that manager may be. The Summa Group of Oppenheimer & Co., Inc. is pleased to work as an outside wealth manager to many family office clients. The key for us in achieving collaborative service with a family office client has been the adoption of high-end information-sharing technology.

“One frustration that pushed my family office clients away from outside wealth managers was inefficient access to information,” says Elizabeth Glasgow, a private-client attorney for ultra-high-net-worth families in Los Angeles and New York. “Clients with substantial wealth and relationships with more than one financial adviser would receive different account statements, product analyses, or spreadsheets from each adviser, but with no mechanism to assess the performance of their investments holistically, making it difficult to determine if there were inappropriate risks when considering the investments across the different managers.”

[To read more of Robert Dalie’s thought leadership click here]

The Summa Group and other leading wealth management teams that work with family office clients have created innovative information-sharing platforms to remove barriers to information between outside wealth managers and the family office. Such technology consolidates and provides immediate access not just to the investments we manage, but for all of the outside wealth managers’ investments and the family office’s direct investments. While family offices at any stage benefit from this broad information-sharing approach, it has been particularly well received by family offices in the early stages that do not yet have their own platforms.

“When a family office is just starting, they are delighted to find an outside wealth manager partner that is able to offer access to technology, which may not have been one of the initial areas of commitment in the establishment of the new family office,” Glasgow says.

Our technology is also nimble, and for those family offices that have created their own data platforms, our information is easily transferable and allows us to pursue to same result of integrated reporting that promotes investment assessment and risk analysis. Our technology also goes beyond investment figures and performance to include information and reports on research and coordinated strategies addressed with family office employees, as well as reporting on investment advisory fees.

The key for us in achieving collaborative service with a family office client has been the adoption of high-end information-sharing technology.

The maintenance and ability to access and retrieve this information has been important to family office clients looking to take advantage of the tax deductibility of investment advisory fees and other family office expenses. Under the Tax Cuts and Jobs Act of 2017, only a family office entity that is operating as an active “trade or business” is eligible to deduct operating expenses (including investment advisory fees) under Section 162 of the Internal Revenue Code.If the family office falls short of being a trade or business, and is instead determined to be providing mere administrative services, investment oversight, and/or record keeping, then the expenses, under the new tax law, are no longer deductible. With family office clients potentially having investment advisory fees and other expenses in the millions or tens of millions of dollars, the issues of deductibility is critical.

It is also a fact-specific determination, as illustrated in the recent case, Lender Management v. Commissioner of the Internal Revenue Service. While many factors must be met to qualify a family office’s operating expenses as tax deductible, going through the analysis as to whether the qualification is possible is top of mind for family office clients. Glasgow agrees. “Structuring a family office to qualify [for tax-deductible operating expenses] is the most frequent conversation that I am having with ultra-high-net-worth clients at this time,” she says. An outside wealth manager who contributes to providing and properly classifying information in support of that determination is key.Of course, the benefits of technology to share information and improve a family’s wealth management does come with a downside: creation of a target point for cybercriminals. No sooner had we started providing our information-sharing technology to family office clients than we were looking for way to exceed the cybersecurity protections already in place. Cybersecurity covering all functions of a family office—from protection of financial and identity information to protection of family travel plans to thwart physical security threats—is among the most important considerations that a family office can address.

[For more on The Summa Group’s approach to Wealth Management click here]

The endgame for all outside wealth managers is a high-quality client service experience for both family office employees and family members themselves. While technology increases the opportunities for outside wealth managers to be seamlessly integrated into the family office’s platform, we still believe that the value to our family office clients is the human connection to our team.

©2019 Oppenheimer & Co., Inc. Transacts Business on all Principal Exchanges and Member SIPC 2403227.1. Oppenheimer & Co., Inc. does not provide legal or tax advice, but will work with your other advisors to assure your needs are addressed.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

The journey of an entrepreneur is anything but a linear, upward trajectory. It’s a series of highs and lows, successes and setbacks, wins and losses. After more than four years of running my own business and helping others run theirs before that — trust me — I understand the frustration that comes from entrepreneurship. The most important lesson I’ve learned through my own experience is that it’s imperative, for both your sanity and your efficiency, to remember that you are not a victim.

[To read more of Erik Huberman’s thought leadership click here]

Things happen to everyone. You have a difficult client; your employee is constantly late to very important meetings; partners are constantly shoveling their responsibilities onto your plate; you got a parking ticket just two minutes after your meter expired. Out of all these external factors affecting you and your abilities to get work done, it’s important to understand which of the things you can change and which you can’t.

DON’T BE A MARTYR (BUT GIVE YOURSELF SOME SPACE TO FEEL)

Entrepreneurship isn’t martyrdom. Your industry was not crafted to best suit your abilities. It’s up to you to adapt to your industry and all its changes.

At my company, I could complain about crazy clients or difficult employees or economic shifts, etc. But at the end of the day, that just causes stress and there’s nothing to be done about it. Instead, I choose to focus on what I CAN control. I don’t have to work with that client, I can let go of that employee, and, while I definitely can’t control the economy, I could tighten up the ship a bit. I focus on my energy on the things I can handle within the constraints I have.

However, I’m not a robot — and I’d bargain you aren’t either. We have a right to feel frustration, disappointment … even anger or sadness. Give yourself the space to feel those natural human emotions. Just don’t allow yourself to dwell in that space for too long.

FIND WHAT YOU CAN CONTROL

Okay. You’ve allowed yourself to let off some steam about an unpleasant situation. Now it’s time to get down to business.

For example, say you have an employee who has just missed an important deadline and the client is pissed. The first step in handling this issue is to figure out what, within that situation, you can control. And remember, as a CEO, you have quite a bit of control.

In my opinion, there are four options you have to deal with this issue:

1. Immediately fix the problem. (Fire that deadline-missing employee.)
2. Sit around and complain about the problem. (Bitch over beers to your business partner about the missed deadline.)
3. Help your employee succeed (Talk to your deadline-missing employee about their organization methods and suggest ways to prevent missing important dates.)
4. Do it yourself. (Handle any and all deadlines moving forward.)

While these options are obviously not created equal, they are all within your power to implement. What isn’t in your power is the actions of the employee, when the deadlines are, how the client is going to feel about the missed deadline, etc. I know it’s tempting to dwell on these things, but at the end of the day, it’s only going to drain you of your focus and patience.

So hone in and find the things you can control.

THEN FIX IT

Things can and will go wrong, but if you remember you’re a manager, not a martyr — these issues will be a fertilizer, rather than an impediment, for growth.

Now that you’ve thought about the issue with a calm head, it’s time to go about fixing what is broken. Not all problems are going to have immediate solutions that bring about immediate results. But if you’re working in a positive manner toward a bigger goal, that’s a win in my book.

Referring back to the scenario above, options 1 or 3 seem like the best way to go. You can obviously still go vent to your partner about the missed deadlines and other work frustrations, but just be sure you’re also doing something proactively to address the situation at hand.

If this is the fourth or fifth time that employee has totally dropped the ball, then maybe option 1 is your best bet. But, more likely, this is the employee’s first offense. Let’s face it, sometimes these kinds of things happen. We’re all human; we’re all bound to make mistakes. What matters most is how you grow from them.

Take this missed deadline as an opportunity to have a one-on-one meeting with that employee to figure out how you, as a CEO and leader, can help them be better at their job. Maybe there are some issues outside of work that are occupying the employee’s headspace, making them appear to a little spacey. Perhaps they could benefit from a day off or a long weekend. Maybe the employee just needs some tricks and tools to be better organized. Let them know what you do to stay on track and see if they’d be interested in attending a seminar on project management.

BE PROACTIVE

Basically, as a leader, it is your responsibility to deal with the blows and blessings that come from running a business. It is your job to provide your employees the tools to succeed and your clients the results tey’re expecting. Things can and will go wrong, but if you remember you’re a manager, not a martyr — these issues will be a fertilizer, rather than an impediment, for growth.

[For more on Hawke Media’s approach to Digital Agency click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

In the world of investing and finance, most people simply focus on wealth creation and preservation. Yet what is often overlooked and neglected is our most valuable asset—an asset so critical that without it, we are unable to enjoy the fruits of all of our other asset classes combined. The asset is you and your health.

Insurance and Health Do Not Guarantee the Best Care

Health is often taken for granted and we believe that insurance is the instrument that provides us cover in the event of medical problems. The reality is that healthcare insurance is a financial hedge against unforeseen medical (financial) loss. Health insurers don’t really care about you—they care about quarterly revenue and profit margins. Insurance is for hospitals, not doctors. If you want a medical expert, advocate, and co-pilot concerned about what matters to you as much as what is the matter with you, it’s time to take a serious look at the private medical marketplace. This is especially true given that the medical industry is in a state of turmoil with the transition from The Affordable Care Act (ACA) to the American Health Care Act (AHCA), which likely will reduce access. Wealthy people often know folks at the “Concierge-Suite” of hospitals and think that knowing these executives will ensure good care. Yet numerous studies highlight the well-known “VIP syndrome” in which there are many experts but no quarterback directing a VIP’s care, leading to poor outcomes.

Additionally, as medicine gets more complex, it is difficult for doctors to stay ahead of the curve of new innovations and rapidly evolving treatment paradigms. Medicine has always suffered from a long learning curve to execute new diagnostic and treatment protocols. The bench to bedside timeline—or from discovery in the lab to clinical trials to the standard of care—typically takes years. This would never happen in financial markets where a hedge fund and quantitative traders’ arbitrage in microseconds can exploit the smallest market inefficiencies.

"Healthcare and the medical profession are on the cusp of a major redesign of how to deliver care in a world of big data, artificial intelligence, and breakthroughs in biotech"

Concierge Medicine Has Emerged to Deal With These Issues

This new model has been gaining momentum since the late 1990s and has finally reached a point of maturity and differentiation in the marketplace. For a monthly or annual fee, you retain a private doctor to manage your health asset…and like everything, you get what you pay for in this evolving landscape. At the high end of the market, there are medical concierge practices that operate very much like a family office for health and well-being, whereas the middle tier is made up mostly of doctors who left the treadmill-driven, transactional model merely to have more time to cynically practice ‘business as usual.’

These private medical concierge practices have built and designed a model that reflects the reality of modern healthcare. People want their doctors to be “…thinking about them when they’re not in our office,” says Dr. Jordan Shlain, founder and managing partner of Private Medical, recently featured in The New York Times. He adds, “We prefer to be proactive and prevent illness with individualized screening. After all, the three leading causes of death are cardiovascular disease, cancer, and medical errors. At Private Medical, we get out in front of heart disease utilizing aggressive medical management, and while we can’t prevent cancer, we can vigorously employ personalized surveillance strategies, and we work in ways and within engineered systems that dramatically reduce errors.”

[To read more of Robert Dalie’s thought leadership click here]

The doctors at Private Medical approach clients’ health asset in the same way CEOs would approach their company boards. That is, the doctor provides a detailed, bespoke Medical Annual Report that shows historic trends and a brief discussion of strategies for the optimal outcomes. They have taken the best practices from many other industries and employed them for health and well-being. In addition to a personal annual report, there is a longer-term strategic plan, by quarter, for continued measuring and testing. In a world where everyone wants to measure everything about them, a.k.a. the quantified self-movement, Private Medical focuses on the qualified self.

Measuring the Things That Matter

In one instance, Dr. Shlain saved a life by organizing a SWAT team of experts and choreographed a multidisciplinary team to remove a cancer that was about to eat into a patient’s skull. They were thorough and expeditious, connected all the dots, and stayed on top of every detail. Their philosophy of health is the same as The Summa Group’s philosophy of wealth. The Summa Group is emphatically committed to advocating for clients’ most pressing issues and concerns. The ability to provide access to Dr. Shlain and his team is absolutely crucial to accomplishing this goal. There is no greater gift for the families advised by The Summa Group than providing them with the peace of mind that comes with private medical care at this level.

[For more on Oppenheimer's approach to Investment Banking click here]

Healthcare and the medical profession are on the cusp of a major redesign of how to deliver care in a world of big data, artificial intelligence, and breakthroughs in biotech. Just as important as diversity in sector allocation and investment performance, healthcare is an asset class everyone should spend time reviewing. Without a doubt, it’s your most valuable asset.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

There are quantitative and qualitative considerations that factor into making the most informed and best fit choice when deciding with whom you will entrust your wealth. These factors are not always so obvious and not surprisingly, many affluent families struggle with this process. Quantitative factors tend to focus on a team’s performance, size of the team, assets under management, fees, tenure and other issues that need to be addressed. While these factors are relevant, they are hard to substantiate and do not necessarily guarantee or validate the success or overall quality of the team. More often than not, it is the qualitative factors that are not only more revealing and important but more difficult to uncover and evaluate.

Before getting into the meat of this article, here are the 5 questions that must be asked up front and responded to with complete honesty and transparency. If you notice, these are high level questions that have little to do with performance and investment philosophy. These questions assume the candidates were recommended to you and have demonstrated a certain level of success and longevity in the business. These questions are designed to expose and demand a higher level of transparency and thoughtfulness.

1. Looking out 5 years, what metrics should I be using to determine if I made a good decision about hiring you?
2. Do you and your team have a well thought out succession plan? What does it look like?
3. Is there anything on your U-4/compliance record we should be concerned about?
4. How many firms have you worked for during your career? Average tenure at each firm? What were the reasons for leaving each?
5. If you polled your top client relationships, what would their response be to the question about why they hired you and whether the reasons are still valid?

The most successful client-advisor relationships exist when all parties understand there is mutual responsibility required to ensure the wealth management relationship functions at an optimal level.

Let’s discuss considerations that need to be addressed before any individual or family makes their final decision.

• Team Structure matters. How is the team organized? The most common team structures fall into 2 broad categories, Vertical and Horizontal. The former exists when one senior level investment professional drives most of the mission critical aspects of the team’s business and has most of the client facing interaction. The ladder (The Summa Group) tends to have several senior level professionals sharing many of the mission critical aspects of the team’s responsibilities and all play an equal role in client facing activities. While both structures have their pros and cons, it is our opinion the horizontal structure fosters a more robust, collaborative and comprehensive offering to the family who has complex and dynamic needs. Compensation structures also vary between the two approaches and while both can work, a vertical structure can lead to compensation structures that don’t foster the teamwork and commitment required to run the best possible practice. The vertical structure also poses a number of legacy and succession related risks to the client as there is not likely a plan in place to guarantee continuity if the key person is no longer able to serve in that capacity. We call this key man risk.
• How do you serve your clients? The role of investment advisor has clearly evolved over the past several decades. Elite teams recognize there are a myriad of factors that affluent families consider a priority when working with a team.
• • Advisors’ accessibility – An advisor must be able to articulate in no uncertain terms how a client’s daily, monthly, quarterly and annual needs will be handled by the team. Further, establishing a protocol for how various requests and needs are met by various members of the team is important. High performing teams understand the importance of providing full access to the lead partner but with an understanding many client needs are met in a more efficient and timely manner by a team of high performing client service associates.

• • Full transparency including all fees – One of the truly mysterious and more frustrating challenges for any client is understanding what they are paying for account services. Top teams understand there is a fee level that satisfies both advisor and client when presented with complete transparency and explanation.
  • Proactive communication – Given the complexity many families face with regard to health, philanthropic, trust and estate, succession and financial planning issues that are often fluid and unpredictable, one must understand whether a team has the skill, experience and depth to communicate in a proactive manner. Highly skilled teams use regular meetings and conversations with clients to ensure all aspects of a client’s financial life are understood and acted up on if necessary.

• • Quality and frequency of client facing meetings – Clients have unique preferences with regard to the frequency, content and flow of their meetings. Most importantly, the team is prepared to meet as often as necessary to provide a thorough review of performance while addressing the life and planning issues someone may be facing. A candid and open discussion of these issues often reveals factors impactful to their portfolios, and personal and financial lives.

• • Sitting at the Advisory Table – For many of our nation’s top wealth advisory teams, their success is driven by the overall strength of the team’s most trusted outside advisors. This includes the CPA/Business Manager, investment bankers, M&A attorneys, Family Lawyers, trust and estate professionals and others whose collaboration on mission critical factors is essential to the overall success and effectiveness of the relationship. They pride themselves on their ability to help clients build out their team of experts from various disciplines. It is incumbent upon a team’s members to have invested the time to meet with and vet other advisors across multiple disciplines who can provide value added guidance with the same level of expertise, and commitment to values and ethics.

• Are you managing my investments or managing my wealth? The Summa Group and other elite teams understand the management of capital to achieve a goal is a byproduct of having a deep and intimate understanding of their client’s fears, anxieties, objectives and dreams. As families evaluate wealth advisory teams, their focus must be on the team’s ability to grasp the bigger picture- well beyond what a specific investment strategy may be. This works best when there is a high correlation between the client’s needs and the wealth advisory’s team philosophy and capability.

[To read more of Brian Werdesheim's thought leadership click here]

• The client index v. the market index? The performance of an index has captured the attention and imagination of investors for decades. The S&P 500 is an index that includes many of the largest companies in the USA. This is arguably the most widely followed index in the world because it is considered a proxy on how markets are performing in the USA. Financial news channels like CNBC, Bloomberg and others, flash the minute by minute price updates of this index and many others around the world. While many investors judge their own success against these widely followed indices, the elite investment advisory teams are focused on the client index, which reveals whether a client’s various taxable and tax-exempt vehicles and strategies are meeting the family’s income, growth, philanthropic, succession and multi-generational objectives. A family with complexity places a much greater emphasis on planning and understands the only index relevant to their life is the one that determines whether these longer-term objectives are met. It is the advisory team that has the skill set to address and plan for these issues and are often able to exceed client expectations.

• • Pitfalls of putting too much emphasis on investment performance – Performance alone is not the driving force behind successful relationships. While a very important consideration, once this box is checked, the focus must turn to the qualitative considerations outlined in this article.

• • Elite teams make it easy for prospective clients to evaluate performance that is relevant and authentic. The industry is saturated with advisory teams who make disingenuous claims about performance, knowing most are ill-equipped with the analytical tools to make sense of its relevance and authenticity.

• • Benefits of a more holistic approach, incorporating customized financial planning and other aspects – The Summa Group and other elite teams understand the importance of asking the difficult yet most revealing questions during the early stages of a relationship. Client advocacy is often the differentiating characteristic and skill when looking at high performing teams. Only when an advisor and their team truly understand what the most important and mission critical life goals are of a client, can they deliver a relationship that transcends the norm. Not surprisingly to the elite advisor team, clients don’t really care about how much you know, until they know that you care. Uncovering the real issues of any family requires a team with the skill to not only understand these issues but knowing how to bring solutions to the table.

• What is your investment approach? There are many ways in which to invest client capital and debate will continue to the end of time about which is best. What we can say is that performance is not predictable from year to year, but the process one engages in on a daily basis to produce results is. Elite teams adhere to a rigorous, repeatable, transparent and collaborative process every day. Passive v. Active, Growth v. Value, Domestic v. International, mutual fund v. separate account v. hedge fund, public equity v. private equity, these are the conversations, but the results will be driven by a team’s commitment to a process that has demonstrated consistency over a long period of time.
• • Investment philosophy – Again, consistency is key here. For example, some teams put emphasis on minimizing downside risk and preservation of capital; the client needs to understand that occasional underperformance (v. some blended benchmark) is something that that can happen and is very normal on the way to achieving their long-term, mutually agreed-upon goals. The question for the team is, do they have conviction in their philosophy and process?

[For more on The Summa Group's approach to Wealth Management click here]

• Are the key ingredients in place for a long term and mutually beneficial relationship? Having an enduring relationship with your investment advisor can be elusive. The reasons for this are many but most can be traced back to the thought and decision-making process that was utilized to make the decision in the first place. Performance, fees, likability, convenience and other considerations may very well have played a key role in making this decision but ultimately, these factors will not drive the long-term success of the relationship.

Partnership- For a relationship to endure through market corrections, adversity, life events and other inevitable realities, both sides must take responsibility and ownership and recognize a high level of accountability. The most successful client-advisor relationships exist when all parties understand there is mutual responsibility required to ensure the wealth management relationship functions at an optimal level.

Values matter- In a complex relational equation, a mutual sharing of values will be the single greatest element by far in determining the sustainability, quality and success of the relationship. Values come in the form of ethics, integrity, character, humility and compassion but also in the form of business values that include transparency, collaboration and communication.

Only when there is alignment, understanding and mutual respect for the importance of these values can there be a foundation for a thriving and transcendent wealth management relationship. For Elite teams who work with a number of fiduciary parties that include CPA’s, Business Managers, Attorney’s and other key players of a client’s most trusted advisor circle, these values help ensure that all contributors are marching to the same beat and committed to the client’s key objectives.

Fit between client needs and advisor expertise/capabilities- At the core lies the importance of engaging a team whose experience, philosophy and capabilities are in alignment with your actual needs. Whether buying a computer, a dishwasher or automobile the decision is always a better one if you can match needs to capabilities. Too many times, investors are focusing on the wrong elements and make an emotional decision that is not anchored to some of the factors that matter most. Top teams take prospective clients through a process that allows them to determine if there’s a fit. Walking away is sometimes the best outcome and serves everyone well.

Demystification- Advisors helping investors make intelligent and informed decisions through education and transparency is often a key differentiator. The interaction and dynamic between advisor and prospect during the exploration stage of the relationship is challenged by a lack of transparency and a disregard for providing information that is actionable and relevant to making an informed decision. The communication tends to overwhelm with performance information, complicated fee discussions and promises that are difficult to quantify or substantiate.

Elite teams navigate this stage of the relationship with care, knowing their primary goal is to not only educate but to demystify the many vagaries that have plagued our industry for decades. The primary objective is anchored to providing the decision maker with a road map and playbook so they can make the best and most well-informed decision about with whom to entrust their wealth. Consistent with the importance of “values alignment” between advisor and prospective client, top teams understand how much the decision maker appreciates the time and effort taken to provide an honest and transparent look at the advisory practice and industry in general.

More often than not, the team willing to educate first and demystify our nuanced industry wins the business, while earning the trust and loyalty that is often elusive. Affluent families should always be wary and reluctant in hiring advisors who don’t demonstrate a genuine interest in letting you look under the hood with 100% transparency while helping you figure out what matters most in this process.

• What other value-add services do you offer? Technology and the commoditization of investment platforms, access to institutional caliber money management and execution, fee compression, the advent of the robo-advisor and a massive migration to passive investment strategies has changed the game for many and in some respects has leveled the playing field for specific segments of the wealth management industry. For teams like The Summa Group and others who cater to the affluent market place, the impact is less dramatic and has actually served as the primary catalyst for differentiation. The process of meeting with and evaluating wealth management teams must include and focus on areas that cannot be addressed and solved by technology or an 800 number.
• Financial Planning – Working with individuals and families who have experienced a “change of circumstance requires a team with the experience and resources to address the changing dynamic and implications of this new found wealth and responsibility. The sale of a company, inheritance, divorce and other life events often lead to increased complexity and some level of anxiety. The high functioning teams in America are uniquely positioned and qualified to add game changing value due to the multiple agendas that are often being pursued by these clients. This begins with the ability to engage in high level planning discussions with the wealth advisory team and other trust advisors in the areas of tax planning and trust and estate related matters.
• • Philanthropy – How one pursues their philanthropic endeavors is a highly personal and sometimes complicated matter. Summa provides their clients with the fundamental knowledge of what is available, along with the pros and cons of each alternative. Education is the key, and this is where we can help them navigate the complexities, depending on how involved and empowered they and their families want to be.
  • Health – It is not a stretch to suggest to any client that the most important asset on their balance sheet is their health, because without it, the other assets don’t have the same meaning or impact. The Summa Group spends a great deal of time educating clients on what’s available now and later in life as needs evolve and become more prevalent.
• Education and Financial Literacy for the next generation – We appreciate how important it is for families to provide the next generation with the knowledge to perpetuate the family’s legacy. Providing this next generation with information and experiences greatly increases the likelihood they too will respect how the wealth was created and will engage in behaviors that help sustain, grow and continue the wishes and dreams of the family. The Summa Group’s education and financial literacy program is delivered over six, one-hour sessions covering the fundamentals of investing, how the banking system works, how to create a budget and other topics that help build the foundation of knowledge in these important areas.
• Do you get me? Too many financial advisors talk too much in an attempt to impress you with their knowledge. This isn’t always a negative, except when it interferes with where their focus should be, which is all about gaining as much information and knowledge about the prospective client, so they can begin to ascertain how they will best be able to help. An advisor’s ability to truly capture and internalize a client’s most pressing concerns, fears, objectives and life goals is really a function of how skilled they are at asking questions in a way that reveals the purest and most relevant feedback possible. Only then can an advisor put themselves in a position to begin constructing the plan that has the highest probability for success.

Conclusions

• Certain technological, demographic and social changes have had a dramatic impact on the wealth management industry. These changes have had mostly positive implications for what is available to the family or individual looking for wealth management services. At the same time, it’s created a greater level of complexity and some confusion with regard to how someone should approach one of the most important decisions they will make during their lifetime, “with whom to entrust their financial lives.”
• Wealth management needs vary from family to family and clearly, with greater levels of wealth comes increased complexity and increased needs. The Robo advisory revolution isn’t going away and it’s only going to become more prevalent within certain demographic segments. What will not change, is the need for human interaction with highly experienced wealth advisory teams who have the experience, resources, humility and knowledge to help people manage their financial lives.
• Technology, and access to products and information is continuing to have its impact, but these deeply embedded trends will only serve to elevate and differentiate the unique delivery capabilities of the elite teams in our industry.
• As investors consider the many options available to them, there are a long list of qualitative and quantitative factors that need to be considered. Once the basic quantitative considerations are met and satisfied, the focus turns to the more important and demanding part of the due diligence process that allows the prospective client and advisory team to determine together if it feels right.
• At the elite level of wealth advisory, the most influential factor that drives a sustainable and long-term relationship where both client and advisor thrive is directly tied to the alignment of values, philosophy and the fit between needs and capabilities. 

Syndicated and originally found on CSQ.com. The article, for reference, is here.

It’s the great marketing debate: in-house versus outsourced. While there are pros and cons to both sides of the coin, the more modern marketing becomes, the more sense it makes to outsource marketing efforts.

Modern marketing is faster, bigger, better, stronger than marketing was some years ago. There are so many moving parts, technologies, mediums, etc. that it’s become increasingly more difficult for in-house teams to stay up-to-speed. It’s also become incredibly expensive, in time, money and resources. An external agency offers a well-rounded, intact, ready-to-go team from day one.

[To read more of Erik Huberman’s thought leadership click here]

And yet, a lot of brands feel this self-inflicted pressure to bring their marketing in house – which often leads to companies having a rude awakening when it comes to the depth of knowledge one must have in order to market effectively. Especially for growth stage ecommerce companies, getting an outsourced CMO is the smarter business decision. Let the marketing experts focus on the marketing so that you and your team can focus on your product and all the intricacies that go into running a successful business.

IF IT AIN’T BROKE

An odd trend exists. Companies see impressive results from their outsourced marketing agency and decide that the next logical step is to end their relationship with said agency and bring everything in-house.

Let me tell you right now – this could be one of the most detrimental decisions a company could make.

My company, Hawke Media, had a client that went this route. After seeing such a boom in business thanks to our marketing experts, the client decided they wanted to take their marketing in-house.

What happened next? Did they continue to see their sales increase month-over-month? Did they continue to produce effective and efficient Facebook ads? Did they continue to expand their client base and increase the reach of their email newsletter?

Nope. Instead, they were banned on Facebook just two weeks before one of the biggest days in ecommerce – Black Friday.

It’s true, this company was unable to advertise on Facebook before Black Friday. Even more unfortunate for them was that, because they had an inexperienced marketing team, they lacked any connections at Facebook to help them fix it – something a marketing agency is definitely going to have.

This client is not the only poor, unfortunate soul who went this route and suffered for it. We had one client who had been with Hawke Media for a year and half. During this time we took the company from a three million dollar value to a 60 million dollar value. When the company raised that round, they decided to try and take everything in-house.

Fast forward three years and, in the time since then, the company has had to raise more money at the same valuation and even had to recently go through a complete internal restructuring. With an expert marketing agency, they were on a complete upward trajectory. On their own…not so much.

YOU DON’T HAVE TO DO IT ALL ANYMORE

The idea that a company should bring all its processes in-house once they’ve reached a certain pinnacle of success is an archaic way of thinking. The scope and speed of today’s marketing makes outsourcing one of the smartest business decisions you can make. Companies shouldn’t feel obligated to take on all the responsibility of owning, operation, producing, marketing and selling a product. It’s just too much these days and there are experts just waiting to help ease the burden.

The digital revolution changed the game and marketing initiatives now cover an incredibly wide breadth, requiring a wide variety of specialization in order to be successful. Because of the nature of today’s modern market, in order to stay competitive, you have to stay efficient. In order to stay efficient, you have to outsource.

[For more on Hawke Media’s approach to Digital Agency click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Scenario

The deal is announced, the ink barely dry, and the eight- to nine-figure liquidity event hasn’t even hit the bank account, but the financial advisors are circling above and ready to pounce on the newly minted millionaires. With a “change of circumstance” comes a host of new challenges, anxieties, and objectives for this private business owner who just sold their business – their pride and joy. Generally, the seller will entertain a number of meetings with financial advisors who are often referred by the very people who helped arrange the sale of their company. Once the dust settles, the seller looks over to their CPA, attorney, and/or bankers and says, “The advisors all sounded really smart, were nice enough, but I really can’t differentiate between the advisors, their firms, or capabilities.”

Assessment

Sounds like a lot of work and headache for nothing, but this is a common scenario because many advisors sound the same and have trouble differentiating themselves from the competition. Generally, the advisory teams march in and out of meetings with glossy pitch books and fancy suits, but often fail not only to differentiate their capabilities, but also to make any real personal connection with the prospective client. The advisor’s message can be anchored to self-serving attempts: to convince the prospective client why they will perform better; to provide certain perks; or even to gain access for the client to opportunities they would otherwise not have.

[To read more of Brian Werdesheim's thought leadership click here]

The Elite Advisor Experience

The “Elite Advisor’s” objective in an initial meeting is very deliberate and has little to do with selling anything. It is solely dedicated to providing the best information to make an informed and well-educated choice about entrusting their wealth. Elite teams acknowledge the daunting process it is for someone to understand the many complexities, potential conflicts, investment choices, and dozens of other qualitative and quantitative considerations when selecting an advisor.

With transparency and confidence, elite advisor teams present the facts and strategies they believe in, but also convey their values and time-tested approaches to relationship building. They attempt to explain the wealth management choices one faces by focusing on what they believe to be the core values required to run a highly successful wealth management business. These teams take the potential client through a discussion about their core values, which dovetail with education about the qualities and attributes they should be looking for in any well-compensated, trusted planning firm. The elite advisory teams take tremendous pride in their core competencies but also understand the importance of advocating for and educating their clients.

Transparency, or the lack thereof, impacts how investors make decisions.

Demystification and Client Advocacy

Highly evolved wealth management teams illustrate how the financial advisory industry works from the inside, and the recurring theme is transparency. Much of client frustration and potential confusion often involves fees and how their wealth is technically being managed. The elite advisor explains the various fee structures, and the pros and cons of each. Bringing transparency to this sometimes mysterious part of the financial services industry provides the prospective client with the knowledge to make informed decisions.

Elite teams conduct an unbiased breakdown of the various components and differences, figuratively having the client “look under the hood” of the process, helping them feel comfortable asking questions. Transparency, or the lack thereof, impacts how investors make decisions.

Other values that internally drive successful teams and their client relationships are collaboration, empathy, authenticity, communication, humility, and accountability. These values are a constant within high-performing teams and consequently become the drivers of how effectively the team works together and how successful they are working with clients. Engaging in this high-level conversation and bonding over shared concerns and experiences, the conversation evolves into a discussion about what’s really important to them, as they set out to live their lives with a elevated level of wealth that will bring newfound complexity, challenge, and even some anxiety.

The most successful wealth management teams in the country are often reminded that the issues keeping our clients up at night often have little to do with performance and everything to do with their health, education, philanthropy, succession issues, and other challenges. As elite advisors learn more about these various issues, they are thinking strategically how the team can help them best. This collaboration puts elite teams into a strong position to add what is sometimes life-changing value. Elite teams emphasize the depth and competency of not only their team but also the vast resources and expertise available through their expansive network of like-minded tax and legal professionals. Part of the demystification process is simply about educating people about the things they could and should be more focused on. As they learn more and are able to focus on a few points, they become better equipped to make the right decisions in those areas and others.

The Bottom Line

Selecting a wealth management team is difficult and no small feat. Many people simply don’t have the time, tools or experience to always know which questions to ask or how to identify red flags during the interview process for financial advisors. Families who are serious about having a cooperative, values-driven relationship with a team that has the experience and resources to help bring confidence and execution at the highest level, migrate to the Elite Advisory team that can deliver and execute on every level. Ultimately, it is the goal of the Elite Advisory Team to provide each family with a “playbook” they can rely upon to make some of the most important decisions in their lives.

[For more on The Summa Group's approach to Wealth Management click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Ask anyone who has been through the painful and emotional trauma of a divorce, and they will tell you that it was one of the more agonizing, disjointed, and conflicted experiences of their lifetime. While there is no silver bullet to make these challenges disappear, retaining a financial advisor who has experience working closely with the client’s key advisors will help alleviate many of the difficult issues and should result in a reasonable outcome.

Wherever you are in the divorce process, it is important to have someone with financial expertise to guide you. A financial planning expert can reduce the time, anxiety, and expense of a divorce by helping explore complex planning issues commonly faced by many high-net-worth couples. There are various types of financial advisors, but a certified divorce financial analyst (CDFA) is particularly familiar with issues such as tax and retirement planning, financial modeling, and budgeting. The goal of a divorce financial planner is to find common ground, minimize conflict, and eliminate unnecessary expenses while collaborating with all parties involved. Here are some of the key issues addressed during the process.

Financial Issues of Divorce

• Real property
• Financial planning, budgeting, and forecasting
• Family businesses
• Pensions and qualified retirement plans
• Debts and liabilities
• Maintenance (alimony)
• Child support and custody
• Healthcare benefits
• Investments and life insurance
• Social security
• Estate and tax planning
• Philanthropic continuity

[To read more of Robert Dalie's thought leadership click here]

While every divorce is unique, the planning process that follows is standard and uniform. During the initial stages it’s critical to ask probing questions and gather as much information as possible. Often this involves getting copies of trusts from an estate lawyer, mortgage statements from the bank, tax returns from the CPA, and investment statements from the wealth advisor. Once the information is obtained and verified it should be categorized by title, cost basis, and tax characteristics. A shortcut often used to obtain this information is finding copies of former refinance applications, tax returns, or (if the divorce has officially started) the financial affidavit already mandated by the court.

Next, it’s critical to create a comprehensive balance sheet listing all current assets and liabilities. Some assets may be worth less than they appear once taxes are taken into account. Keeping the home may require special considerations: Refinancing is needed, in tandem with retitling, to take a spouse’s name off the mortgage. Owning a home also requires a certain amount of cash flow, thus refinancing may not be feasible in certain cases. If there are children, the parents may want to discuss support obligations as well. How are they going to pay for private school and/or future college expenses? The end game here is to create a planning document that serves as a blueprint for mission-critical decision-making.

Once assets are transferred and a plan is put into place, an ongoing system should be implemented to monitor and make adjustments as life changes.

A holistic plan should incorporate financial modeling that includes income, expenses, assets, and liabilities. It should account for salary increases, inflation, return on investments, and taxes on maintenance, while incorporating new tax-law changes such as those enacted post-2018. The output should include financial status, cash flow, and net worth to represent a variety of settlement scenarios over a full life span, presented in columnar and graphic formats. We have found that many people can relate to these graphical outputs more easily than reading through the boilerplate spreadsheets that many software packages currently provide.

[For more on The Summa Group of Oppenheimer & Co. Inc's approach to Family Law click here]

Now the challenging stage begins: determining the potential long-term effects of the settlement while understanding the potential economic consequences. During this stage it’s imperative to collaborate with the family lawyer, CPA, and other divorce professionals to run multiple scenarios based on the long-term goals and desired outcome of each party. We often talk about “safety-net planning” during this period, which is the concept of creating a baseline plan with enough financial resources to maintain a certain lifestyle. In a sample planning model, one might hypothetically assume a baseline amount of alimony that will continue for the next 15 years, at which point an accumulated investment portfolio would provide the desired income to maintain that lifestyle as a worst-case scenario. Any plan utilizing a safety net should always use conservative and realistic return assumptions. We often see an insurance policy placed on the life of the ex-spouse as a backdoor safety net. Under this scenario, if the ex-spouse dies, the payee is made whole based on a net present-value calculation. If this strategy is utilized, it’s important to monitor the life insurance policy once per year to make sure it’s still in force with the correct beneficiaries listed.

Once a scenario is agreed upon and the divorce decree is finalized, the next step is to split and transfer assets. Designated beneficiary forms need to be updated, a new CPA possibly hired, tax returns filed, and trust documents reviewed by the estate lawyer. For personal assets it’s typically easy with standard title transfers or quit claim deeds. For retirement assets, this often requires a qualified domestic relations order (QDRO). Absent a QDRO, the divorce decree can be final and recorded with wording that allows for division of retirement property. We have seen some legacy divorces come back to haunt one of the parties decades after the fact. Think of a settlement a little bit like a trust—you can make it say or do anything, but it must be written and part of the court record. If it isn’t in there, it doesn’t exist. I have seen folks agree to changes outside the court-approved agreement only to be burned later when the other party reneged on the unofficial side arrangement. Once assets are transferred and a plan is in place, an ongoing system should be implemented to monitor and make adjustments as life changes.

A skilled financial planner with the proper credentials and experience can intercede at any stage in the divorce process for specific client needs. They can inform and educate, advocate on your behalf, and interface with the family attorney, accountant, business manager, and other professionals. In some instances, the financial planner enters the process after the divorce decree is signed to help manage the asset-transfer process.

Bottom line, when working on divorce cases, a planner should always look for ways to minimize taxes, streamline investments, and put together a plan the client understands. Ultimately, engaging a skilled advisor with divorce experience will not only provide confidence in the process, but also save potentially significant expense.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

In November 2019, I first shared my views on the current innovation cycle. Sixteen months later, the cycle has accelerated and we continue to be excited about the opportunity to invest in and capitalize upon what we believe is the first large-scale, wide-in-scope cycle of technological innovation since the internet wave of the mid-’90s.

We believe this transformative wave of technological innovation, often referred to as the “Fourth Industrial Revolution,” will fundamentally change the way we live, work, and interact, and will disrupt businesses globally. Moreover, we believe technology companies, because of the coronavirus crisis, are likely to increasingly benefit, permanently and secularly, from strong trends toward distributed workloads, “work from everywhere,” and the cloud and SaaS/app ecosystem that supports this decentralized user architecture, with security, redundancy, and agility in its deployment and ease of infrastructure scaling. This paradigm change in user behavior, we believe, is likely to not only sustain momentum post-pandemic, but also fundamentally change human-to-business interaction in a secular matter, and digitally transform business collaboration, learning, and training, and the entire sales activity cycle.

During our careers, we have seen waves of innovation run through the capital markets, but never like what we see today. Innovation is not only impacting every major industry, but it’s also impacting everyday life for Americans and others around the world. Likewise, innovation is not just something that companies are evaluating and considering—it’s a necessity. If not fully embraced and acted upon with the complete dedication and force of their intellectual and financial resources, they may regret it. Never before have we seen such a wide disparity between how much a company spends on R&D and its growth rate. The correlation between investment and stock performance is staggering across all industries but especially in healthcare and technology. The bottom line is, companies who are investing in R&D are being richly rewarded while those who are not are subjecting their future to untold risk.

THE HISTORY OF INDUSTRIAL REVOLUTIONS

We believe we are living through the beginning stages of the Fourth Industrial Revolution today and that it is driving the current pace of technological innovation in the marketplace. Throughout history, people have always been dependent on technology. Of course, the technology of each era might not have the same dimension as today, but for their respective times, each certainly provided the public with something to marvel at.

People would use the technology they had available to help make their lives easier and at the same time try to perfect the technology and bring it to the next level. This is how the concept of the industrial revolution began. Before examining the current industrial revolution, let us first try to understand the three previous industrial revolutions.

Source: Franklin Templeton

The First Industrial Revolution (1760–1840)

The First Industrial Revolution marked a period of development in the latter half of the 18th century that transformed largely rural, agrarian societies in Europe and America into industrialized and urban centers. Fueled by the seismic change wrought by use of steam power, the First Industrial Revolution began in Britain and spread to the rest of the world, including the United States, by the 1830s and 1840s.

The biggest changes to the country and the economy came in the form of mechanization. This initiated the great shift from an agrarian to an industrial society, over time, and provided a necessary backbone to bolster the power and expansion of the broader economy. At the time, the massive extraction of coal along with the very important invention of the steam engine created a new type of energy that sped up the manufacturing of steel and railroads, which accelerated the economy, and built cities and connected them.

The Second Industrial Revolution (late 19th century to early 20th century)

Almost a century following the First Industrial Revolution, the world experienced a second. It started at the end of the 19th century, with immense technological advancements that helped the emergence of new sources of energy: electricity, gas, and oil.

The results of this revolution included creation of the internal combustion engine. Other important aspects of the Second Industrial Revolution were the ubiquitous demand for steel, the advent of chemical synthesis, and proving the methods and manufacturing of communication such as the telegraph and telephone.

The development and acceptance of the automobile and the airplane in the beginning of the 20th century impacted life and the economy to such a degree that, even today, they not only epitomize that era, but still define how we travel today. Mechanized advances required for war stimulated wide-ranging industrial expansion and application, and helped establish the United States as the power it was to become.

The Third Industrial Revolution (1960–present)

Another century passed and we bore witness to the Third Industrial Revolution. In the second half of the 20th century, we saw the emergence of yet another source of untapped energy—nuclear power.

The Third Industrial Revolution brought forth the rise of electronics, telecommunications, and of course computers. Through the new technologies, the Third Industrial Revolution opened the doors to space exploration, research, and biotechnology.

In the world of industries, two major inventions, programmable logic controllers and robots helped give rise to an era of high-level automation.

Read more of Brian Werdesheim’s thought leadership.

The Fourth Industrial Revolution

This next iteration of the industrial revolution builds on the foundation initiated in the 1960s and acceleration in the 1990s with proliferation of the internet. The Fourth Industrial Revolution is a technological revolution that will fundamentally alter the way we live, work, and relate to one another. It is “one of the most important revolutions ever. Whereas computer scientists used to specify every instruction one line at a time, now algorithms write algorithms, software writes software, computers are learning themselves. It is the era of machine learning, and a historic time when serendipity meets destiny,” as described by Jensen Huang, CEO of Nvidia.

We don’t view this upcoming cycle of innovation as another mini-cycle, but rather as a broad-based cycle of innovation driven by a unique set of new technologies, including next-gen broadband mobility (5G and Internet of Things), and significant advances on the consumer side in display technologies (3D, VR, and AR) and AI and autonomous driving.

WE’RE STILL IN THE EARLY STAGES

We are still riding the early wave of technological innovation. For example, even 5G, a critical infrastructure layer underneath the compute and application layers, will take years to deploy fully. Big data is as foundational today as the internet was in the 1990s and mobile phones were in the mid-2000s. Only in the last few years have machines begun to recognize images and words better than people. This is a technological innovation decades in the making, which in our view is now enabling an accelerated pace of growth and adoption of AI at a time when major milestones in image recognition, natural character recognition, natural-language processing, and speech recognition are being reached. For example, Alphabet introduced Google Lens that uses AI to let cameras understand what they see.

In summary, recent application advances in AI that were only reached in the last few years are now providing us with confidence that AI is rapidly approaching the cognitive era.

As a result, business leaders are rapidly abandoning legacy models, as multi-trillion dollar industries are now turning to AI to accelerate their digital transformation and enhance their chances of survival.

Merrill Lynch has predicted that 50% of S&P 500 companies could be replaced over the next 10 years, as the average tenure of an S&P 500 company is forecast to contract from its high of nearly 40 years in 1977 to 12 years by 2027.

WHAT INVESTORS SHOULD BE THINKING ABOUT REGARDING INNOVATION

Innovation can be looked at through a number of different lenses, but the common theme and basic message is simple: Where there is innovation, there is change and opportunity. Many in society are inherently resistant to change and do not easily embrace the change that comes along with innovation. From an investor standpoint, these individuals will be less likely to embrace the opportunities that will materialize. From a business-owner standpoint, you are likely to be left with a business that can no longer compete with others who have spent the time, resources, and capital to stay in front of the innovation curve.

As an investment advisor, not staying current with how innovation is impacting industry and companies means you’re not giving your clients an opportunity to consider the benefits of a once-in-a-generation experience. As wealth advisors, we are required to think about innovation from many perspectives given the role we play in our clients’ lives. Technology has had a big impact on the way we manage our practice every day. From client service, research, and due diligence to reporting and communication, technology is creating massive levels of efficiency in our ability to collaborate, communicate, and execute on a daily basis and in real time. There are still many advisors who have not invested in their own practices and the many technologies that are enhancing our ability to positively impact the client experience.

The investor must pay attention to all of the ways in which their lives are being impacted by the latest revolution and figure out how to not only benefit financially, but benefit by improving the quality of their lives. With innovation comes the inevitable unintended consequences that can have profound negative implications. Parents with teenagers have to be concerned with how innovation in social media, gaming, and telecommunications is impacting our next generation’s ability to develop into human beings that can engage in more traditional forms of human interaction. Will they have the soft skills and intangible qualities to pursue and obtain jobs that demand high levels of social interaction, problem-solving, and awareness?

We believe the net positives that come from all of this will far outweigh the negatives, but we must be mindful of the challenges ahead. Elite advisors want their clients to embrace innovation, change, and the investment opportunities in front of them.

WHY NOW?

In short, innovation is accelerating and creating investment opportunities now. We are living in a period of unprecedented economic change. This presents us with a compelling backdrop in which to invest. In 1964, the average tenure of companies in the S&P 500 was 33 years. In 2016, the average had shortened down to 24 years, and by 2027, it is expected to be 12 years. The following illustrates how innovation has been accelerating:

Source: Franklin Templeton

THE IMPORTANCE OF PARTNERING WITH THE RIGHT TEAM

Advisors may have the right macro thesis with regard to a specific opportunity, but often have little understanding about how to express and implement their convictions. Therefore, it’s paramount to be aligned with investment professionals who not only have a vision, but have the experience, relationships, and process to act on behalf of the client.

The world is saturated with many opportunities that are sometimes difficult to evaluate. We live in a nuanced world where things are not always what they appear to be. Without going into a dissertation about the pitfalls of this, suffice it to say that it takes decades of experience to properly evaluate an opportunity and access it.

As we observe the opportunity in front of us, we are looking within both the public and private markets. On the public side, an abundance of information is available to anyone willing to invest the time into the research process. The difficult part is picking winners from losers and having a discipline that leads to making more good decisions than bad ones. We choose to rely on time-tested professionals who have been navigating the technology markets for decades. A seasoned team allows investors to gain access to a broadly diversified portfolio of high-quality growth stocks that meet a particular standard. One such manager believes the generation of outsized free cash flow is a determinant of long-term success. They also believe strong balance sheets, high barriers to entry, and great management teams may win in the long run. As it relates to the current innovation cycle, having a team with a vision for what may happen now and in the future is very important.

On the private side, things can get a little more complicated because there is not as much information available. Furthermore, private companies come in different shapes and sizes and with a broad range of risk and return possibilities. We believe there is a huge advantage investing in later-stage private growth companies that are at or near scale and at or near profitability. UiPath and Databricks are examples of companies that successfully completed two late-stage rounds of financing with substantial valuation increases ($10.2B to $35B, and $6.2B to $25B, respectively). Their business models have for the most part been proven and now it’s a function of execution and having the capital to scale quickly while grabbing market share. Even for companies in this position, the road ahead is always uncertain, with intense competition and rapidly changing technologies.

Not dissimilar to how we approach the public markets, we must be with a team of private equity professionals who have the experience and skill to gain some sort of advantage as they deploy capital in later-stage companies. One cannot dispute that private companies are staying private longer and not in a hurry to jump through the IPO door. As a result, substantial wealth creation is occurring in the private space. Those who have the ability to gain access to these companies will have an opportunity to benefit from this trend. Only highly reputable and seasoned private equity professionals are gaining access to these later rounds of financings, so this becomes a barrier for most well-intentioned investors.

Nobody knows for sure how long this current wave of innovation will last, but we are in the first inning and the converging technologies surrounding big data, deep and machine learning, and AI are creating opportunities for software and other technologies at a pace never seen before. No doubt investment careers will be defined by how they choose to play the Fourth Industrial Revolution. It’s human nature to underestimate the longevity and sustainability of deeply embedded trends in technology, healthcare, and other industries where innovation is running rampant.

Learn more about The Summa Group’s approach to wealth management.

CONCLUSIONS

When history books are written about this current period of innovation and how our lives were impacted in positive and negative ways, historians will have a huge canvas from which to work.

AI is, of course, at the very heart of this rapid pace of fundamental secular change. As a result, business leaders are rapidly abandoning legacy business models, as multi-trillion dollar industries are turning to AI to accelerate their digital transformation and enhance their chances of survival.

Importantly, we are just at the beginning stages of this technological revolution, as we continue to develop the physical, compute, and application layers of this new digital world. For example, even 5G, a critical infrastructure layer underneath the compute and application layers, will take years to deploy fully. In particular, 5G is not a single innovation, but rather a set of advances in spectrum usage.

The investment implications are staggering and secular in nature. Against this backdrop of significant disruption, companies are rushing to invest, not to seize the opportunity, but simply to survive the rapidly changing landscape of the fully connected economy. As a result, AI spending alone is projected to grow at 28% annually, approaching $100B by 2023.

The investment opportunity exists in both the public and private markets, with more and more wealth creation happening in the private sector. This dynamic is presenting well-positioned and experienced investors with access to some of the fastest-growing software companies in the world.

We believe we are at the early stages of potentially the most disruptive innovation cycle in technology ever: an AI-driven revolution that by 2030 has the potential to contribute up to $15.7T to the global economy.

Ultimately, if you believe this revolution will impact every major industry—healthcare, finance, transportation, retail, and others—you need a process by which to identify, evaluate, and ultimately select investment opportunities that are well positioned to capture the opportunity in a responsible and strategic manner.

SOURCES

The 4 Industrial Revolutions (June 2019). Retrieved from ied.eu/project-updates/the-4-industrial-revolutions

Industrial Revolution (September 2019). Retrieved from history.com/topics/industrial-revolution/industrial-revolution

How the Second Industrial Revolution Changed Americans’ Lives (January 2019). Retrieved from history.com/news/second-industrial-revolution-advances

The Third Industrial Revolution—Internet, Energy, and a New Financial System (March 2015). Retrieved from forbes.com/sites/goncalodevasconcelos/2015/03/04/the-third-industrial-revolution-internet-energy-and-a-new-financial-system

6 Reasons You Should Invest in Innovation (2020). Retrieved from entrepreneurshipinabox.com/8479/6-reasons-you-should-invest-in-innovation

Investing in Innovation (August 2020). Retrieved from franklintempleton.com/content-common/market-perspective/en_US/investing-in-innovation-u.pdf and franklintempleton.com/forms-literature/download/FDTF-BR

Why AI and Robotics Will Define New Health: Retrieved from pwc.com/gx/en/industries/healthcare/publications/ai-robotics-new-health/transforming-healthcare.html

Advantage Advisers Xanthus letter, Sept. 30, 2020.

Advantage Advisers Xanthus Monthly Update, Oct. 2020.

Federated Kaufmann Insights: “A New Era for Growth Stocks,” May 5, 2020. federatedinvestors.com/insights/article/a-new-era-for-growth-stocks.do

Artisan Focus Fund Monthly Summary, April 30, 2020. artisanpartners.com/content/dam/documents/monthly-commentary/vr/2020/apr/ARTTX-APDTX-MCommentary-0420-vR.pdf

2Q 2020 Artisan Global Opportunities Fund Presentation Deck, June 30, 2020.

Artisan Global Opportunities Fund Quarterly Commentary, Sept. 30, 2020. artisanpartners.com/content/dam/documents/quarterly-commentary/vr/2020/3q/ARTRX-APDRX-APHRX-QCommentary-3Q20-vR.pdf

Manning & Napier Fund, Inc.—Rainier International Discovery Series Commentary, Sept. 30, 2020.

Alkeon Capital Management LLC—Alkeon Innovation Fund Presentation Deck, Nov. 2020.

Artisan Partners Thematic Team—PM Viewpoints: Data-Driven Thematic Opportunities. March 2020. artisanpartners.com/content/dam/documents/pm-viewpoints/vxus/Viewpoints-Data-Driven-Thematic-Opportunities-vXUS.pdf

BofA Global Research—Communications Infrastructure, Sept. 28, 2020. rsch.baml.com/r?q=1Vb!-OoSh0lCYNeD00HeWw__&e=mahearn%40ipipartners.com&h=ORSDbw

Oppenheimer & Co. Inc. does not provide legal or tax advice, but will work with your other advisors to assure your needs are addressed. The opinions of the author expressed herein are subject to change without notice and do not necessarily reflect those of the Firm. Additional information is available upon request. Investors should review potential investments with their financial advisor for the appropriateness of that investment with their investment objectives, risk tolerances and financial circumstances.

©Oppenheimer & Co. Inc. Transacts Business on all Principal Exchanges and Member SIPC 3462709.1

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Co-founded by three-time startup entrepreneur Jocelyn Loo and headquartered in Los Angeles, ICBRKR (“icebreaker”) is an innovative new social networking app that is changing the way people connect not just online, but while out in the real world. ICBRKR launched in 2017 at Art Basel in Miami and is now pushing across major cities throughout America, including Los Angeles, New York, Miami, San Francisco, Austin, and Las Vegas with more to come.

Aimed to get people connected in real time and wherever they may roam, ICBRKR curates high-quality events, adventures, and activities. Scroll through the best concerts, newest restaurants, and trendiest activities, and use the app like a personal social calendar. Users can see who in the ICBRKR community is attending the same events as them, making it easy to connect with people who have shared interests.

“Through matching people with common interests and activities, in real-time, we create a community of spontaneous socializers that meet and mingle in the curated ICBRKR community,” says Loo, co-founder & CEO of ICBRKR.

ICBRKR is perfect to use when traveling, as it finds the best things to do in major cities. Love music? Hit up the coolest techno warehouse party, or have a cultured night at the opera. Are you a foodie? ICBRKR will show you the best restaurants and bars the city has to offer. Or maybe you’re interested in art? Along with classic attractions like the MoMA in NYC or The Broad in LA, ICBRKR will show you galleries that may be off the beaten path.

ICBRKR can also help users find their museum companion or concert buddy. Using geolocation, ICBRKR shows users people near them who share the same passions and interests. ICBRKR profiles even show information from other apps like Spotify, Instagram, and LinkedIn to help users meet people who match their lifestyle. Users can connect through the app, or meet offline at the events and activities, creating community and forging relationships in real life.

Through matching people with common interests and activities, in real-time, we create a community of spontaneous socializers that meet and mingle in the curated ICBRKR community.

By getting rid of the news feeds, status updates, and sometimes overbearing advertising that has caused many millennial users to leave Facebook behind, ICBRKR gives users a break from the clutter and offers a fresh and easy platform that caters to forging real connections. “So many apps replicate existing social media sites and look to build a network based on where users are already spending their time,” Loo says. ICBRKR aims to streamline the user experience to get people into the real world faster. The app is designed to create small, active communities of users in its active regions.

ICBRKR wants to help its users build new friendships and make memories, while exploring the best their city has to offer. ICBRKR is available now for free download for iOS and Android devices.

Syndicated and originally found on CSQ.com. The article, for reference, is here

Throughout the years, many families and fiduciaries have asked, “What is a Virtual Family Office (VFO)?”

My goal in this article is to demystify these structures and share a growing trend within the ultra-high net worth marketplace. A VFO consists of a team of professionals who, rather than operate in silos, collaborate together to create a seamless and holistic wealth management experience, facilitated through well-defined governance, structure, and process. To illustrate this point, let’s start off by sharing a short story.

It is every advisors ideal day: the phone rings with one of your key investment banking relationships on the line sharing with you the details of his client’s imminent liquidity event. Listening to the investment banker describe the situation, you realize that the client, Mr. Smith we’ll call him, might need more than just investment guidance. In fact, the more you learn about the situation, the more it becomes crystal clear that one of the most valuable things you can do for Mr. Smith is educate him on the process of building out a high quality team of advisors. A team that has his best interests at heart. The tangible and intangible benefits to the client can be game-changing, and the economics can appear very attractive if done properly.

"A VFO consists of a team of professionals who, rather than operate in silos, collaborate together to create a seamless and holistic wealth management experience, facilitated through well-defined governance, structure, and process."

In this hypothetical scenario, Mr. Smith is about to sell his family owned business, into which he poured 30 years of blood, sweat, and tears. Mr. Smith has a local advisor who has already done some basic insurance and estate planning but the current advisor is now overwhelmed regarding the complexity of a hybrid asset/stock based sale. Mr. Smith has never hired a dedicated outside CPA nor has he ever engaged in sophisticated estate planning. To make matter worse, he doesn’t have a team of dedicated professionals to properly advise him on best practices.

[To read more of Robert Dalie’s thought leadership click here]

After spending enough time to understand what truly is keeping Mr. Smith up at night, you start to put together a short list of the types of professionals that can best serve his needs. Once an initial team has been assembled, you share with them the family balance sheet, cash flows, and goals. During this process, you collaborate with the team, conducting frequent conference calls and meetings to set protocol going forward. In this specific case, you want to make sure to talk with the banker and get a clear understanding of the terms of the liquidity event as the transaction date nears.

Based on the initial financial planning exercise, it is obvious that his current spending is extremely low relative to the overall size of his $50M estate. His number one priority is making sure the family is functional, and his children are motivated and active members of the community. He has shared with you his desires to be more involved in philanthropy and teach his children core values. After months of detailed planning Mr. Smith now has built out an advisory team, which includes an estate lawyer, financial planner, investment advisors, CPA, attorneys, and other consultants.

In essence, what we’ve just described is the anatomy of a Virtual Family Office. “Virtual” in this context refers to the fact that these advisory roles are coordinated across several firms by dedicated professionals acting as a team.

[For more on The Summa Group’s approach to Wealth Management click here]

Everyone has a different opinion regarding the size and structure of the VFO. In our experience, we’ve seen the VFO model work best with estates ranging from $20M to $250M (however, it is not a direct scale comparison because a smaller estate with hundreds of LP’s and complex deals can justify the expense of a single or multi-family office). There are several advantages to the VFO model: You can outsource staff and have dedicated partners in very specialized fields and only call upon them when absolutely necessary. This allows monthly overhead to be kept at a minimum while maintaining the resources for the family, when needed.

Everyone has a different opinion regarding the size and structure of the VFO. In our experience, we’ve seen the VFO model work best with estates ranging from $20M to $250M

Another advantage involves what we term, “the cumulative strategy effect.” Many single family offices are not exposed to the outside world and things become tainted or biased without any negative feedback loops. Advisors can become complacent, whereas with a VFO team that handles multiple families, exposure to great strategy or ideas is spread among families in similar situations. As you solve an issue for one family, that solution can be applied to, and shared with, other families when appropriate. This may leverage a greater pool of strategies.

To be fair, there are some downside issues to the VFO model, such as confidentiality, service provider risk, and control. Cyber security plays a major role in all our lives. When dealing with confidential information flowing between multiple firms, protocol is required for information sharing, storage, and access. The same can be said for service provider risk. Complacency requires constant vigilance. The coordinator of the VFO needs to make sure that all providers are reviewed at least annually, to make sure they are still a good fit, based on the family governance and current goals. With a VFO no one person has direct control of everything. During the initial setup, roles must be defined to ensure accountability. If structured properly, one can minimize these issues with trustworthy advice, state-of-the-art technology, and transparent pricing.

To summarize, a Virtual Family Office consists of all of a family’s existing professional advice-givers. Ultimately, the effectiveness of any VFO will in large part be driven by the team’s commitment to shared values and disciplines, including transparency, collaboration, communication, authenticity, humility and accountability. 

Syndicated and originally found on CSQ.com. The article, for reference, is here.

In one corner, you have the likes of Mike Tyson, Michael Vick, Allen Iverson, Antoine Walker, Evander Holyfield, Lawrence Taylor, Scottie Pippen, and Lenny Dykstra, who collectively earned in excess of $1B throughout their respective athletic careers. And in the other corner you have the likes of George Foreman, Magic Johnson, Michael Jordan, Roger Staubach, Wayne Gretzky, Tiger Woods, Greg Norman, and Cal Ripken Jr., who not only earned large sums of money in uniform, but went on to build successful business careers, both during and after their playing days. The former group figured out how to burn through a cool billion dollars, and have nothing left to show for their domination in their respective sports.

According to Sports Illustrated, 78% of NFL players who are retired for only two years file for bankruptcy. After five years of retirement, 60% of NBA players suffer the same fate. According to a study by the National Bureau of Economic Research, nearly 16% of the NFL players in the study who were drafted during 1996-2003 filed for bankruptcy within just 12 years of retirement.

In this article, I will examine the common mistakes made by those working in a profession where the longevity, predictability, and sustainability of earning power are difficult to forecast. I will share my own experiences working with and advising athletes and entertainers (A|E) and what I learned about the many challenges they face. I will address several important planning considerations these professionals must address, plan, and solve for, regardless of the length of their careers. In addition to the financial planning and investment mistakes that have haunted this group for generations, many other tangible and intangible factors contribute to the success or failure of A|E during and after their careers. I will discuss the common themes and actions of professionals who not only survive but thrive after their playing days are over.

Read more of Brian Werdesheim's thought leadership.

Mistake #1: Surrounding yourself with yes-men.

A|E are spending the vast majority of their lives mastering their craft to reach the pinnacle of success and little time on the subjects of financial literacy and investing. By the time they ascend the draft, or graduate from college and sign their first big contract, a host of “advisors” enters the picture and this begins a journey that often ends badly. These advisors are often friends of their family, acquaintances, and others whose agendas may not be in alignment with the athlete and/or without the requisite skill set and experience to provide high-level guidance. Within a short period of time, the “high earner” is surrounded by a group of people without credentials and often with conflicting loyalties, who are unwilling or unable to provide the discipline and objectivity that are so critical to the equation. Hearing “No, you can’t do this or that,” doesn’t happen very often because these advisors don’t want to disappoint their high-profile client or put their relationship at risk. These figures have long found themselves in national headlines and the story always reads the same: “John Smith is bankrupt after he spent lavishly, while learning his advisors invested poorly, stole money, and squandered millions.” It is imperative for A|E to have a well-vetted and qualified team of professionals working together for the best interests of the client and willing to challenge groupthink when it’s not always convenient to do so.

With the help of an experienced financial planner, attorney, and CPA, this effort may go a long way toward locking down the planning part of your life.

Mistake #2: Having an unrealistic view of your long-term earning potential.

It is not difficult to understand why someone like Ryan Leaf, who was the second player taken in the 1998 NFL Draft after Peyton Manning, would think that their financial life is secure. One would think that a $31.25 million contract and an $11.25 million signing bonus would secure the future for most people. But think again. Within a few short years, Leaf was out of the NFL, was on drugs, and had a criminal record. Most professionals who sign a contract are also continuously told how great they are, and will be forever. They invariably assume there’s another contract coming down the road. For people like Derek Jeter, Tom Brady, and others, that was certainly the case, but they are the exceptions to the rule. Recently, Joe Burrow, the first player taken in the 2020 NFL Draft, signed a record-breaking contract with the Cincinnati Bengals. Shortly thereafter, he publicly stated he had no intention of spending the contract money and would rely on endorsement contracts and other cash flows for his annual living expenses. While his contract represents an enormous amount of money, when you net out agent fees, taxation, and other embedded expenses, his bottom line quickly dropped to about 35 cents on the dollar. Unless one lives in a jurisdiction without state income tax, the bottom line is that most athletes sign one major contract in their lives, so having some forethought and sense of reality is critical. I would bet Burrow probably has another contract in his future, but he’s not going to need it.

Mistake #3: Lack of a real financial plan that allows you to build a safety net.

Thankfully, for every athlete who lacked the discipline and structure around them to achieve financial independence, many did it right. The key difference between the winners and losers relates to the presence of a deep and thoughtful financial plan that maps out one’s financial future, based on a number of simple variables, including income, spending, taxation, inflation, and investment returns. Having a document that shows A|E what’s possible given these variables is very liberating and creates a degree of confidence, if the high-wage earner can exercise some discipline and control. The relationship between athlete and investment advisor is a trusted partnership. Both sides have to keep their end of the bargain. If the advisor does a good job investing the capital, it may not matter if the client is spending like a drunken sailor.

Mistake #4: The absence of a unified team of tax, legal, and financial professionals, who are not conflicted with regard to the client’s personal well-being.

Ask the CEO of a large publicly traded company and they will tell you they are only as good as the support system below them. This includes the CFO, COO, and other key members of the C suite. In the case of the professional athlete, they need to embrace the idea of being the CEO of their life, while building out the team of advisors around them. It is true that “agents” or “attorneys” for A|E have existing relationships that will be referred to their client, but this exercise can present a host of challenges and potential failures down the road. It’s hard to overemphasize the importance of building out a highly skilled and battle-tested team of advisors for the long haul. Many sports agents have done an outstanding job surrounding their clients with talented and ethical advisors, and their athletes are the ones who are thriving, both during and after their careers.

Mistake #5: Making outsized investments into opportunities that have little chance for success.

“I have an investment opportunity that’s a no-brainer—you can’t lose.” Just about everyone has heard this promise from someone but never more than the athlete who has a target on their back. Unfortunately, all too often the unsophisticated and unprepared target is seduced by such an opportunity because they believe the person making the pitch is credible and believable, and the story is too good to pass up. Years ago, an athlete client of mine asked me to get on an airplane to meet with his attorneys to discuss a business opportunity they were presenting to him. At this point our client had already invested $1M into the deal without our knowledge. After the long dinner, I called the client and told him to cease any further investment. I felt pretty strongly that the only people making money on this deal were the attorneys. While I didn’t follow the deal beyond our client’s initial investment, things went south fast, and all of the investors lost tens of millions of dollars. Taking on some level of risk to generate outsized returns with an amount of capital that will not put you in harm’s way is acceptable, but extreme caution and due diligence are required anytime an opportunity presents itself.

Mistake #6: Not investing in their personal growth, leaving them ill prepared once their careers are over.

Magic Johnson is the poster child for what success looks like after your athletic career is over. Right out of Michigan State, Johnson surrounded himself with some extremely smart people, whom I know personally. They kept him out of trouble but also helped position him for a remarkable level of success during and after his professional basketball career was over. His development projects in urban areas have not only improved the quality of life for residents, but have made Johnson a very wealthy man, who is now part owner of the Los Angeles Dodgers and former shareholder of the Los Angeles Lakers. For many athletes, the season is half the year. The off-season should be dedicated to developing skills and relationships that can help them after their career. The average length of an MLB career is 5.6 years; for the NBA, 4.5 years; and for the NFL, just 3.3 years.* Assuming a 75-year life span, an athlete’s outsized earning power comes during just 6% of their lifetime. If this doesn’t tell the story, nothing will.

Working with an astute and well-credentialed financial planner can provide great insights into strategies and thinking that can really move the ball forward on the planning front. For example:

• Choosing a proper domicile. Where do you live? Does the team’s home state have tax advantages for high-income earners? If not, residing in a non-tax state like Florida, Texas, or Tennessee can mean significant tax savings.
• Mitigating the so-called jock tax. This involves projecting the tax impact of playing in various states and paying tax to those states. Players have to pay withholding tax to the visiting state for road games, but they also receive a tax credit in their home state for taxes paid in other states. If their home state has a higher tax rate, players may owe more tax than expected.
• Understanding the impact of taxes on signing bonuses. A player’s signing bonus is only allocated to their state of domicile. If that state does not levy income tax, it can mean huge tax savings.
• Allocating professional athlete tax deductions to earned wages versus earned income from endorsements, appearance fees, and residuals. Certain deductions can be taken as itemized deductions or as business expense deductions. A certified public accountant (CPA) can help an athlete determine which method is most advantageous.

We always look into the very important but less well-known planning aspects for athletes and entertainers, including:

• Employment agreements for household workers
• Privacy policies for employees
• Kidnap and ransom insurance for high-profile athletes
• Security companies to protect an athlete’s dwelling and vehicles

Learn more about The Summa Group's approach to Wealth Management.

The following exercises are game changers for any person who wants to be prudent and proactive with regard to their financial lives. With the help of an experienced financial planner, attorney, and CPA, this effort may go a long way toward locking down the planning part of your life.

• Create a current balance sheet, cash-flow summary, income and expense summary, and financial plan that provide the athlete a road map and confidence—review with a certified financial planner.
• Review the structure and estate tax consequences of the recent liquidity/income and long-term contracts. Make sure all assets are held in trust or protected. Maximize the value of the estate exemption via low-basis stock gifts or other entity structuring. Explore and become educated on the world of estate planning—review with an estate lawyer.
• Review current and potential future tax liabilities. Strategically position assets for tax-efficient investments through the use of certain offset credits, tax carryforwards, residency planning in different states, and income shifting via insurance or retirement strategies—review with a CPA.

Conclusion

A perfect storm surrounds the financial lives of athletes and entertainers because they are high profile with targets on their backs and oftentimes have little experience in the areas of financial literacy and investing. The agent, attorney, or business manager who has taken the time to conduct due diligence and background checks on investment advisors, attorneys, CPAs, and others who are critical to the success of their client’s financial lives are doing themselves and their high-profile clients a worthy and invaluable service. Having worked closely with athletes and entertainers for more than three decades, I have witnessed the good, the bad, and the ugly under different sets of circumstances. I believe it’s always in the best interests of A|E to invest the time into gaining knowledge and experience with regard to financial matters. The most successful people across multiple industries know what they don’t know, and then take the time necessary to surround themselves with experts to fill the gaps. Even the most well-intentioned athlete can suffer irreversible financial damage if they fail to surround themselves with a team of advisors dedicated to helping them secure their financial future and independence. The NFL, NBA, and MLB have made some progress toward implementing an educational platform and screening process for their athletes, but unfortunately, too many are victimized by their own missteps and the presence of people who have an alternate agenda. A|E can have it all during and after their athletic careers if they are properly advised and willing to embrace prudent proactive planning with a long-term view.

*Statistical sources: Science Daily, nba.com, espn.com

Oppenheimer & Co. Inc. does not provide legal or tax advice, but will work with your other advisors to assure your needs are addressed. The opinions of the author expressed herein are subject to change without notice and do not necessarily reflect those of the Firm. Additional information is available upon request. Investors should review potential investments with their financial advisor for the appropriateness of that investment with their investment objectives, risk tolerances and financial circumstances.

© Oppenheimer & Co. Inc. Transacts Business on all Principal Exchanges and Member SIPC

Syndicated and originally found on CSQ.com. The article, for reference, is here.

As wealth managers working extensively within the pre- and post-liquidity planning environment, we often encounter situations with executives, founders, and early employees of startups and privately held companies that have tremendous wealth on paper but no liquid resources. In essence, they are asset rich and cash poor. In the past, if employees wanted to exercise equity before an IPO, there were limited options for shareholders, which meant they would likely have to absorb large tax payments and exercise fees out of pocket. This problem has plagued shareholders for decades and forced many private company employees to wait for an IPO to exercise.

Historically, shareholders have limited choices in exercising private stock. The problem is further exacerbated by rocketing internal 409A valuations, which make exercising increasingly expensive leading up to an IPO. With an average annual salary of below $200K,1 many tech employees cannot afford their exercise costs, which can run into the millions, and even C-suite executives may be challenged to come up with the cash required to exercise their options.

Further compounding this problem is the lack of alternatives for shareholders. Other options, like secondary market sales, not only can result in suboptimal tax consequences and broker fees, but they do not allow shareholders to participate in any potential growth of their stock. Often, these practices also violate share-transfer policies mandated by the company. We always advise clients to read the fine print when it comes to the restrictions of their holdings and talk with a CPA. Those in this position should start planning at least 6-12 months prior to any anticipated event and consider the bigger picture of estate planning as it relates to their overall balance sheet.

The Summa Group has coordinated with outside solution providers to help address these fundamental problems by providing the capital and liquidity education, in advance of approaching a liquidity event. In contrast with traditional loans secured by personal assets, clients can now acquire loans and funding contracts that are generally collateralized by private stock alone. A loan repayment is then triggered when the company has a liquidity event, such as an IPO or sale.

We have seen regular, programmatic, shareholder liquidity become a retention requirement for any top-of-the-line, late-stage company. This solution seeks to optimize tax, option exercise, and liquidity planning for these shareholders. The caveat here is size and scale. An outside liquidity provider will have to take on some degree of risk by providing these non-recourse loan products. Most will require a minimum $500 million market cap with large recurring revenue streams. Typically, we see providers require a minimum threshold of $50 million in recurring revenues. They will also require an accelerating upward sloping growth rate and will normally only lend on high-quality businesses as they will have to absorb any potential losses.

The bottom line is that this strategy allows employees to borrow against their private stock value without having to transfer or sell shares. This allows borrowers access to the capital they need while having the ability to benefit from any share appreciation. It’s these types of shareholder-first solutions that allows employees to borrow against their private stock value without having to transfer or sell shares.

It’s often said, “Great wealth is created through concentration and maintained through diversification.” We feel this is one of many smart liquidity tools for private stock shareholders. It solves a common pain point for employees at high-growth startups: the inability to afford extremely expensive option exercise costs before an IPO.

Robert Dalie is a financial advisor with Oppenheimer & Co. Inc., and his opinions do not necessarily reflect those of the firm. This article is not and under no circumstances to be construed as an offer to sell or buy any securities. The information set forth herein has been derived from sources believed to be reliable but is not guaranteed as to accuracy and does not purport to be a complete analysis. Opinions expressed herein are subject to change without notice.

Oppenheimer & Co. Inc. Transacts Business on all Principal Exchanges and Member SIPC.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Lukas Czinger remembers the day.

He took the day off from work to watch his dad, Kevin Czinger, speak to roughly 1000 people at a tech conference about the vision for Kevin’s company, Divergent 3D, which sustainably manufactures cars through 3D printing with reused metal. During the presentation, Kevin unveiled a car prototype. It was enough for Lukas to call his dad and ask to work for him.

Now, 5 1/2 years later, the father-son partnership is flourishing. The Czinger 21C, a car engineered, printed, and assembled computationally, can go 0 to 62 mph in 1.9 seconds and has net-zero emissions when run on carbon recycled methanol. Divergent 3D has brought in $250 million of fresh capital, Kevin says, as well as engineers snagged from SpaceX, Apple, and Tesla.

“Our mission really is to create the most advanced, off-the-hook, path-breaking, barrier-breaking vehicles in a number of different performance categories,” Kevin says “And really, just the super coolest, most creative stuff that you can create as a kid that you can imagine as vehicles.”

By no means was Lukas struggling or looking for a handout from his dad. A former Division I soccer player and electrical engineering major at Yale, Lukas worked at a well-regarded investment bank in San Francisco before jumping ship to Divergent 3D.

Lukas and Kevin, on the surface, are similar. Kevin was also a Yale student-athlete on the football team in the late ’70s and early ’80s. Both are passionate about cars. It was a self-driven career switch for Lukas, then 23 years old, who bet on himself and his dad over his stable finance job.

“I never expected that Lukas was going to join this business; I had no intention to make this a father-and-son business when he asked to join,” Kevin, 63, says. “Frankly, I was a bit concerned because he was on a career path that he had chosen, rather than me, saying, ‘This is what you should do, Lukas,’ and although he had been trained as an electrical engineer on my advice as to what he should study, he had chosen a very lucrative career path.”

Kevin was apprehensive about Lukas joining Divergent 3D because he’d come aboard as a “junior engineer,” with more people to be hired to meet Kevin’s ambitions for the startup. At the time of his presentation, Kevin was Divergent 3D’s only full-time employee.

However, Lukas immediately thrived and climbed up Divergent’s ranks. At 28 years old, he’s now senior vice president of operations for Divergent 3D and Co-Founder of Czinger Vehicles, and assembled, hired, and led the automation team, part of a larger team which numbers in the couple hundred between both companies. Kevin says Lukas has 50 of Divergent 3D’s roughly 520 patents.

“The evolution he’s gone through in the last 5+ years has been absolutely astounding,” Kevin says. “I was not doing this to groom him for anything. I saw him come in and go from being a junior engineer to taking a key role in the development of our automated assembly cell as part of our digital production system, lead that from really just an idea and an architecture to creating something that is of enormous economic value.”

Lukas says it’s easy to see his father as CEO of Divergent 3D—as a business partner—and put family aside in the workplace. It sometimes surprises people when he refers to his dad as “Kevin,” although, Lukas says, Kevin is still his father first.

“When you’re that aligned with someone—when that person is family and that person is your father, that person is your son—it makes you just focused on winning and the mission at hand,” Lukas says. “There’s no BS about politics or positioning, or twisting or being indirect. You’re just very direct and you trust that person and you’re loyal to that person and you’re just there to weigh in and support that person.”

Divergent 3D has won acclaim since it launched in 2014. It was awarded the Frost & Sullivan 2016 North American Innovation Technology award and given “Moonshot” status by Google’s Solve for X—companies that develop new technologies to solve problems in the world.

Much of the success, Lukas says, is a result of the buy-in to Kevin’s vision. Investors who’ve known Kevin for years trusted his vision for an off-the-wall, environmentally friendly car, including John Thornton, president of Goldman Sachs and lead director for Ford Motor Co. for 25 years. and Tom Steyer, a fellow Yale grad, founder of Farallon Capital, and environmental proponent. Between Czinger Vehicles and Divergent 3D, Kevin says they’ve raised close to $500 million.

Kevin’s track record kickstarted the trust investors have in Divergent 3D and Czinger Vehicles, Lukas says. Kevin’s been a senior executive at Goldman Sachs, held multiple high-ranking positions at Coda Automotive Inc., and sponsors Achievement First, a group of charter schools in New England for low-income minority students.

This résumé gave Kevin’s pitch conviction for why Czinger Vehicles might be the future of automobiles.

“I was saying to them, ‘We have a manufacturing system that is both economically broken and environmentally broken,’” Kevin says. “The only solution we have to this system is not by incrementally changing the existing system but creating a fully new digital system, that did that kind of dematerialization, super optimization, and lightweighting of structures, and then took all of those materials and [cycled] them through.”

Down to the core of how the Czinger 21C is manufactured, it’s unique—not just because it’s 3D printed, but because of the software that helped make the car a reality. The software platform Divergent 3D uses is transferable to any design team looking to craft a metal product—as Lukas says: “Gucci could actually make a car.”

The software platform, Kevin says, can be deployed across the globe and will do wonders for making large-scale 3D printing projects more affordable.

“There’s this super advanced innovation; it’s just not evenly distributed,” Keivn says. “The way you evenly distribute innovation is by giving people access to information. That’s the basis for taking their ideas and creating reality out of that. So in that sense, by breaking down the barrier, the capital barrier and the geographic barrier to access to the tools and then access to the actual production, infrastructure, that allows people an even playing ground, in an even playing field, anywhere on the planet.”

Fifteen years out, Kevin wants Divergent 3D to provide the groundwork for a “global network of digital adaptive production” for creative teams in Toledo, Ohio; Lagos, Nigeria; Beijing; or anywhere to cultivate a product from an idea to actuality. Cars will always be Divergent 3D’s “razor-sharp, first” focus, Kevin says, but the company’s beginning to dabble with aerospace and defense manufacturing.

The potential of Divergent 3D remains largely untapped.

“I don’t know another business that could potentially address a $5 trillion market, and that’s what this system could do in the long run,” Lukas says, noting that in the industry Divergent 3D serves, a market that encompasses complex structure manufacturing—$250 billion worth—everything is made of metal. “If you’re looking 10 to15 years out, you could really capture that market all together with a system that can design, manufacture, and assemble any complex structure.”

However, within automotive , Lukas says Czinger Vehicles will stay in the performance-luxury segment, hanging its hat on being the “coolest, highest-performing cars in the world” rather than bringing analog-manufactured cars into the Czinger umbrella—because, Kevin says, Czinger cars are trying to redefine how people think of cars, that they can be not only high performing but sustainably made.

“The technology itself is revolutionary,” Kevin says. “We can show, as we have, that it can completely destroy existing performance records.”

Syndicated and originally found on CSQ.com. The article, for reference, is here.

When it comes to human relationships, the most powerful healing comes from sharing our feelings and stories. Real conversations with people you trust liberate you from your aloneness and negative thought loops. As you listen to each other, your brains align and sync, creating, a “we.” It is fascinating to feel yourself inside someone else’s story; in discovering the world from their perspective, we expand our own thinking and imagination.

Humans are hardwired to connect through storytelling and every culture throughout time has done so as a way to appreciate each other, heal, resolve, and evolve. The bonding that comes from mutual understanding is essential to physical and emotional health. And that is why, when you don’t get to hang out with people for two-and-a-half years, it takes a toll on how you think, feel, and see the world.

We have isolated for fear of being called out in social media or attacked on the street.

The massive uptick of COVID-related loneliness and isolation will not be soothed by a raise, a corner office, or a cut of the pie. It’s past time to loosen up and sit together with open hearts. And it always begins with you. We can no longer separate our working selves from ourselves. Besides, when we deny our humanity, we limit our ability to focus or be spontaneous and creative.

I’ve been a psychotherapist for over 20 years, and I’ve worked with groups my entire life. From the time I first entered group therapy as an adolescent, I have witnessed again and again the transformative power of a supportive community.

Americans now report having larger houses but fewer friends than they did in the past. We have isolated for fear of being called out in social media or attacked on the street.

Forging ahead at full speed denies the reality that we humans are not designed for such speed. It takes time and eye contact to sufficiently process our experiences. That is why when technology and social media became bigger than us, they replaced our sense of purpose with confusion, depression, anxiety, addiction, and hopelessness.

I founded The Narrative Method (TNM) in 2014 in an attempt to bridge the human gap, by creating spaces for people to connect through sharing the stories of their lives and their creativity. Being able to speak out loud to one or more respectful listeners helps us get clarity and find another way; it gets us back on track; and it provides the essential sense that you are heard and appreciated. TNM’s 12 Core Concepts provide essential coping tools and perspectives that let you experience yourself and others without judgment or criticism. I offer free online writing and conversation groups as well as card decks that you can use with your own groups because you don’t need a license to use your humanity.

By putting aside your own beliefs and judgments, you can better empathize and understand others from their perspective.

The TNM concept of Relational Mindfulness represents the humanistic practice of compassionately relating to others with an open mind and mutual respect. By putting aside your own beliefs and judgments, you can better empathize and understand others from their perspective. When we agree to relational mindfulness there is no hierarchy among people. We acknowledge that, as humans, we all struggle with the same basic things; we are in this together. Relational Mindfulness grounds you with respect for the complexity and richness of everyone’s life. Everyone’s family and everyone’s dreams are as important and real to them as yours are to you. We have all been through beautiful and awful experiences, and that is what links us. When you open up to someone new, you close that link.

This is your call to bring your humanity to work. To help upgrade your corporate culture, I suggest that you:

1. Create spaces to connect
2. Invite creativity
3. Share your story

Despite all the world’s chaos and changes, we will always need to feel understood, appreciated, and accepted despite our failures and foibles. We want to feel respected and heard. We want to believe that what we are doing matters and that we are contributing something good to the world. Because hey, we’re only human. So start the conversation:

Shari Foos
[email protected]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

The greatest enemy our country faces today is not some terrorist group or powerful army. It’s actually in the pocket of almost every teenager in America: TikTok.

While media and business executives talk about developing a strategy for the social video app, there’s only one TikTok strategy that truly makes sense: deleting the app and banning the company from operating in the U.S.

With its reaction to Speaker Nancy Pelosi’s recent visit to Taiwan—launching missiles—the Chinese government has made clear they do not share many of our values. And in many ways, TikTok is more dangerous than any missile—and it’s aimed right at our homes and families.

As someone who has founded a major motion picture production company and co-founded and partially owns Triller, an innovative video platform that empowers creators around the world, I understand the power of media to shape and influence hearts and minds. At my companies, I’ve always tried to use that power for good: giving storytellers from all backgrounds the freedom to make amazing content. Unfortunately, TikTok uses creators to do the dirty work of a hostile government.

Making things more dangerous, the very fabric of America has never been at a greater risk of imploding than it is right now. We are at a pivotal moment in time and culture, with a paradigm shift in the way we and our children are living our lives. Most frighteningly, we are inviting and acting as the catalyst to what very well may become the greatest weapon to ever be created with the intent to destroy America from the inside out. It is what happens when our most powerful geopolitical enemy uses the social media technology our open and innovative economy created to use our free exchange of information against us. That all comes from one simple, devastatingly dangerous app: TikTok.

If someone offered you free Netflix in exchange to unfettered access to your entire life, would you take that deal? Would you give a media company the ability to access, copy, and share any and all data on your phone, and the ability to turn the microphone and camera on at will without you knowing, listening to every word, watching your every move, reading every email and text message?

When put that way, of course not!

However, teenagers and young people are doing this exact same thing today, but instead of handing that data over to a publicly traded American company like Netflix, they are turning over control of their devices to TikTok’s parent company ByteDance—which is partially owned by the Chinese government. Through TikTok, the Chinese Communist Party is effectively infiltrating our lives, telling us what to watch, and pushing selected information to minds that can be easily influenced. The Chinese Communist Party has been crystal clear about its view that America is a rival. They are attacking us from within.

TikTok likes to market itself as a fun, harmless app that allows kids to make silly videos tuned to popular music. It has taken off among preteens and teens, who spend hours a day letting ByteDance’s algorithm tell them what to watch. According to a study from Forrester, 63% of Americans between 12 and 17 used TikTok on a weekly basis in 2021, surpassing Instagram to become the most popular app among that age group.

That type of dependence from young people on a typical company from a Western country that operates independently from government influence would probably not be ideal. This is much worse. While American investment firms have chased the money and invested in it, at the end of the day, TikTok is a product owned by ByteDance—a company with deep ties to the Chinese Communist Party and ultimately controlled by the government of China.

To put it simply, people with TikTok downloaded on their phones are knowingly allowing a sworn enemy to America, Americans, and our way of life to have 24/7 access to their most private moments, files, pictures, emails, and basically everything else in their lives. The enemy is not even at the gates: They are in our pockets and on our nightstands.

This is not speculation or hyperbole. It is fact. BuzzFeed obtained over 80 audio recordings of internal TikTok meetings, confirming that the Chinese Communist Party had unfettered access to all of TikTok’s data. And TikTok has been proven to censor content that puts China and its geopolitical allies in a bad light, such as China’s persecution of the Uighurs in the Xinjiang region. Ultimately, it is an app that knows everything important about your family member—and always acts in the interest of the Chinese government.

By sharing viral TikTok videos and treating it like any other social app, we are letting the Chinese government infiltrate our homes. Once they are inside your digital world, it becomes almost impossible kick them out. There are tentacles you can’t even see that are reading your private messages and tracking your location.

The research shows TikTok can scan an entire hard drive, access contact lists, and see all apps installed on a device. It also routinely communicates between your phone and its servers in China. That means that your most sensitive personal information, passwords, and movements—and potentially, cameras inside your home—are accessible to a government that is more than willing to confront the United States.

TikTok is even logging every keystroke, according to TechCrunch, and not giving users an option to open in-app links in an external browser. That means when people are using links discovered through TikTok to enter credit card numbers or other personal information, servers in mainland China are taking note.

TikTok advises its PR team to downplay the China associations, and it seems to be working. Far too many prominent journalists, business leaders, and politicians appear to use TikTok on their personal devices, and there are certainly many more who are indirectly exposed due to family members who use the app. This behavior potentially puts the country at risk and could share important secrets with a geopolitical enemy.

To be fair, TikTok’s parent ByteDance is not the only company that has found itself compromised by the Chinese government—but it is the most dangerous of them because of its impact on American teens and access to the most personal data. China has acquired small “golden shares” in private media companies, using government-backed funds to buy influence—including a board seat and/or veto rights—in strategically important companies, as Reuters has reported. Through an arrangement like this, the Chinese Communist Party now controls the ByteDance board.

While China may be a major trading partner and at times economic collaborator, its government views the United States as an ideological enemy, and has not been shy about flexing its muscle through media. We know the Chinese government has enforced strict censorship on Hollywood movies, forcing major studios to cave and remove potentially controversial content such as references to Tibet or homosexuality in exchange for access to its lucrative movie market. China wants to set the bounds of what topics of conversation are acceptable. With its ownership of TikTok, it has a powerful tool to do that. This is literally the Chinese government—in your pocket.

Revealingly, China understands the danger of TikTok when unleashed on its own people. The international version is banned in its own country, with Chinese locals forced to use a separate app, Douyin. China also knows how poisonous the app is for young people, as Douyin limits youths to 40 minutes per day and does not allow overnight use. The Chinese government is much happier to see TikTok used 24/7 by Western children, shaping malleable hearts and minds. This way, there are also more opportunities to play the long game: gathering intelligence on children to use against them later.

TikTok may be the greatest Trojan horse in history. Instead of a handful of soldiers, it has tapped into hundreds of millions of brains. This will end with the enemy at the gates—one we are welcoming with open arms. We need to take a stance before it’s too late. It’s time to delete this app for good—and for the good of the country.

Report after report has been published imploring Washington to take a stance and do something about the fact that the Chinese government is in our homes. The greatest geopolitical threat to our nation has access to our entire lives.

One of the commissioners on the Federal Communications Commission (FCC) recently sent Apple and Google a takedown notice instructing them to remove TikTok from the App Store and Play Store. That instruction was ignored.

As a result, we either have to believe the FCC commissioner has some side motive and breaking the law or, more likely, that he is in a position to see what TikTok really is. Given that he is one of the most informed people in our government about digital communication apps and has access to and information on TikTok that others don’t, for him to demand such a measure means he has good reason to call for this ban.

Furthermore, the armed forces has banned TikTok from government devices, and no member of the U.S. government is allowed to have TikTok on their phones. In fact, when you were still a candidate, President Biden, you banned the use of TikTok by anyone on your campaign even before you were president, starting when you were running.

There are a number of very good open-source studies showing how TikTok circumvents the normal protections the App and Play Stores offer consumers. They are doing it in plain sight. They just believe we care more about upsetting our preteen or teenage children by taking away their TikTok than we do about our own personal or national security.

Are they right? Are we willing to hand our future over to the Chinese government? I sure hope not.

I ask you, Mr. President, will you protect us? While children may not be thrilled with you making the right decision, to protect us and our families, you have protected yours by banning its use among your family and those close to you. Will you do the same for us, for our families? Will you put our safety before your popularity?

Ryan Kavanaugh is the 26th highest grossing movie producer of all time and the co-founder of Triller, one of three fastest growing social media apps. Ryan also founded and built the second largest sports agency in the United States and sold one of the largest television companies in the world with over 40 series on the air.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

Hyfit is looking to break ground in the health and fitness market. The firm’s new product is a compact exercise tool that features proprietary resistance bands that connect the user’s wrists and ankles, offering more than 250 exercise options. The wrist bands have embedded sensors that monitor heart rate and provide the user with feedback. Enhanced wireless connectivity, mobile app integration, and comprehensive training reduce the learning curve and improve fitness results.

Co-founded in 2016 by Guy Bar and Dan Strik, the venture got its start in Israel and was successful in obtaining funding for the initial development and marketing; however, the young founders discovered that more opportunities exist domestically to raise capital and distribute to a mass market. Bar, CEO, developed a passion for tension-based workout tools during his time in the Israeli military, serving in the tank and combat skills division. He also brings experience as a personal trainer to the design and implementation of Hyfit. Bar observed the need for an exercise system that could provide a complete workout in any location, regardless of travel, housing, and working accommodations.

“Hyfit gives the user more insight and detailed information on how their workout affects their body, and what results they are achieving each day, than any other wearable exercise product to-date,” said Bar. “Combining the most advanced fitness measurement technology with the convenience and versatility of tension cord training, we created a truly portable and comprehensive personal gym experience that can be used anywhere, any time.”

The mission of Hyfit’s creators is to offer a high-tech portable solution to the fitness needs of diverse users and improve the quality of their everyday lives. The ease of use and real-time interactivity of the device and accompanying app provides the accountability and motivation needed to maintain consistency, intensity, and achieve results. Hyfit also includes excellent support and training, including complete instructional videos and tutorials within the app.

The monitoring unit is equipped with an accelerometer and other sensors that allow the device to measure and analyze body tension, repetitions, BMI, heart rate, strength building, and calories burned. In conjunction with the mobile app, the user can get a complete picture of their workout, effectiveness, and results. The novel design incorporates exercise methodologies that allow an intense and customized regime that balances resistance training with aerobic exercise. The device includes a high-end ‘mesh’ fabric wristband lining that wicks moisture and provides a comfortable workout experience.

“Wearable Gym not only tracks your workout, it is your workout,” said Bar, “It’s time for a significant advancement in what people see as workout gear. Wearable Gym incorporates IoT (internet of things) into the actual workout equipment, similar to what Tesla did in the auto industry. The concept is to allow users to maintain their workout goals and track their growth through this advanced, connected device.”

The concept for the product was inspired by an existing workout system that utilizes tension bands. The differentiator for Hyfit is the connectivity and interactivity of the device, as well as it’s tremendous versatility and portability, traits not found in any other exercise solution available. For busy professionals and exercise enthusiasts, the Hyfit is compact, stylish, convenient, and allows a full body workout in any environment.

The Hyfit systems offers several key benefits including a complete workout, tension tracking, versatility, and connectivity. The R&D team designed the product to target every muscle group, achieving both cardio and strength building objectives. The app offers comprehensive training, frequently updated content, and the ability to collaborate with professional trainers. An innovative tension measurement system enables the device to monitor workout intensity and provide appropriate feedback to minimize overexertion.

It has a high-end, futuristic look. It’s like getting a smart, portable gym. All workout data is transmitted to the application that further analyzes your workout and sends it anywhere – to your fitness professional or anywhere you want it to go. It’s your personal trainer in a box.

A compact design and travel case expand the opportunities for exercise and save users time and expense compared to conventional exercise approaches. The tensions cords can also be attached to external points, such as railings, to improve the range and depth of each workout session. One of the most innovative features is its connectivity with the bundled app, as well as convenient and advanced wireless charging capability. The app features training programs, video groups, and virtual classes to help educate and motivate users.

The Kickstarter campaign launches(ed) on Tuesday, March 20th, 2018. For those that back the project early, a 50% discount will be given on the retail value of the Hyfit. Pre-orders will ship in April, with the full launch and availability in May.

The firm chose to pursue crowdfunding through Kickstarter due to the platform’s success in helping similar ventures obtain financing for new product launches in the health, fitness, and wearables industry. The firm has an objective of acquiring 60k pre-orders via Kickstarter, with the short-term goal of 150k orders annually. After the Kickstarter campaign, the firm plans to raise six million in venture capital to hire staff, complete the GYM X (military version of Hyfit), and launch new products in 2019.

For more information, visit Hyfit’s kickstarter page. 

Syndicated and originally found on CSQ.com. The article, for reference, is here

Since Hawke’s inception, we’ve been both blessed and burdened with extraordinary growth. What started as a five-person team in 2014 has evolved into an increasingly successful business with a team of over 130 expert marketers who have helped more than 1,500 businesses scale and profit.

While the growth has been great, it’s also come with growing pains. Recently settled into our new, 27,000-square-foot headquarters, we’re finally in a space that will enable and encourage further growth. Getting here hasn’t been easy and the Hawke leadership team, and I learned some valuable lessons in the process. Here are the biggest lessons we learned from building and moving into our brand-new headquarters that we hope will help make your own move seamless.

[To read more of Erik Huberman’s thought leadership click here]

1. FORM FOLLOWS FUNCTION

We wanted an office that was custom built for us and being able to design a space that perfectly accommodates the way our company runs has allowed us to perform better. We were able to match the layout of our new office with the way our business works, rather than trying to retrofit an existing space to work the way we want. Creating that new layout gave us the opportunity to figure out what spaces and office functions were missing that our company and employees needed to succeed. Conversely, we were able to see which functions were unnecessary.

In an ideal world, you’ll find a space that can be designed to fit your company’s unique needs. If you’re not able to custom build an office as we were, at least look for buildings with existing layouts that will be conducive to the way you do business.

2. PAY ATTENTION TO HOW DIFFERENT EMPLOYEES SELF-ORGANIZE, BUT PROVIDE GUIDANCE

It was incredibly insightful and interesting to watch the way my employees self-organize: how they use conference rooms and common spaces; how they organize their desks and their days; and how they work most efficiently.

While our new office was still being built, to accommodate for the expansion of our company we had to rent a separate office two blocks away from our original headquarters. We put one of our teams in that new space and let them figure out how they wanted to organize the space, who sat where, and who got what. We thought that the added freedom would increase performance, but we instead realized that our employees needed structure. As a leader, you should take into consideration how people are best organized to accomplish what they need to, but you should also provide guidance and direction.

In our new space, we assigned which teams went into certain spaces, what areas were common spaces across the teams, what spaces were common areas specific to one team, and so forth. Creatives and accountants have different needs in order to be their most productive selves, so we ensured that each team was in a space tailored to their work styles.

It may sound like a small thing, but by simply providing guidance in the designation of space, we’ve already seen an immense ease in our moving and settling-in process.

Moving into a brand-new office space, especially one you’ve built from scratch, can be terrifying and stressful. But it’s also a huge accomplishment and should feel as such

3. LET YOUR EMPLOYEES FEEL HEARD

When figuring out our needs for the new space, we used it as an opportunity to give our employees a chance to voice their frustrations at what they thought could be better within the office. Of course, everyone wants free food and beer on tap. But beyond voicing the obvious desires, we wanted employees to figure out what they were missing in order to be most productive. And then we listened.

Listening to and evaluating their requests was important. Not everything will be feasible, but much of it probably is. We now have kombucha and cold brew on tap. We have a myriad of common spaces, some more public than others, to allow individuals to get away from their desks but still work. We have a recreation room to act as a reprieve from computer screens.

An office move is a great opportunity to find out what is truly lacking in your employees’ work lives. Find out what you can offer to help them be happier and more productive. Everyone will be better for it in the long run.

4. PARTNER UP

Especially in the entrepreneurial community, companies are actually incredibly willing to help each other out so long as there is fair trade-off. We’re lucky enough to have some very kind friends and partners who have helped make our new office even more incredible.

For example, each of our employees has a Varidesk, allowing them to stand and stretch their legs while they work at any time they choose. In return, Varidesk will be using our office as a showroom to clients and visiting us periodically. It’s a win for us both.

Additionally, we went with Openpath to handle all of our building’s open-access control. Our company already had a relationship with them, and we knew we wanted them to handle security matters. Now, not only do we not need to bother giving each employee a key (opening and securing doors is all done via the Openpath app), but the setup process was incredibly easy.

Don’t be afraid to look to friends of your business to help with various aspects of your new office space. Often this can lead to very fruitful partnerships for all parties involved.

5. GET THE NECESSITIES FIRST

Make sure you have your necessities stocked up and ready to go before anything else. Things like toilet paper, paper towels, trash cans, and garbage pickup are all extremely vital to the smooth running of an office. We had to learn the hard way on day one in the new office that we didn’t know what was happening with our trash pickup. It was a mess.

DON’T FORGET TO CELEBRATE

Moving into a brand-new office space, especially one you’ve built from scratch, can be terrifying and stressful. But it’s also a huge accomplishment and should feel as such. Don’t forget to congratulate each other on a job well done.

[For more on Hawke Media’s approach to Digital Agency click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here.

There’s a new Los Angeles based independent digital art studio that is challenging the status quo in the entertainment and gaming industry by providing faster, lower cost services. The founders, Michael Casalino and Maxim Miheyenko, CEO and COO, have developed an innovative business model that allows expedited and cost-efficient solutions for concept art, illustrations, 3D modeling, animation, cinematics, AR/VR, and full-development. The firm operates production studios in Moscow and St. Petersburg, with headquarters in Los Angeles, allowing the company to work continuously on time-sensitive projects.

With greater than four decades of experience between the two, the founders set out to create 5518 Studios to offer animation and art services as an outsourced creative partner. The firm is quickly building a strong reputation in the industry with excellent feedback from partners including Redemption Games, Human Head Studios, Hi-Rez Studios, Digit Game Studios, Paradox Development Studio and more. The firm has found its largest market share in the mobile gaming industry as a trusted collaborator for small and large companies.

Since 5518’s launch in 2016, it has established more than 15 partnerships with major studios includingGoogle, Uber, Wargaming, Scopely, Oculus, Warner Bros, Electronic Arts, and more, as well as growth-conscious startups.The management team at 5518 worked with Disney, EA, Scopely, Oculus, Wargaming and numerous others before starting their own firm. They had creative roles in projects including Madden Football, Tiger Woods PGA Golf, Killzone, Microsoft Kinect Adventure, World of Tanks in addition to hit mobile games Temple Run Oz, Yahtzee, Walking Dead: Road to Survival and award-winning ‘Where’s My Water?’

The studio has a team of artists with cutting-edge training and experience and delivers a spectrum of digital art styles from casual, to midcore and next-gen photoreal style. They also create strategic partnerships, such as recently collaborating with Striker VR in Louisiana for groundbreaking VR experience, include co-partner work as engineering, backend support, and programming. 5518 is currently working with Jam City, a leading mobile game development company, on the new Snoopy Pop game, creating whimsical high-quality art for the loveable Peanuts franchise. 5518 Studios has also generated a successful partnership with Gamblit Gaming in creating characters and animations for a casino game based on a leading game-show brand:

“The experience of working with them was as good as anyone could hope for,” said Edvard Toth, Creative VP of Gamblit, “they were extremely responsive throughout the entire project, they delivered everything on time, and most importantly their quality of execution was outstanding. This effectively eliminated the need for time-consuming iteration, and the assets they created became a signature element of the game.”

5518 has created a partnership approach centered on building business relationships that create added value and support the long-term success of partners’ businesses and projects. New firms are finding that 5518 extensive experience in the industry is enabling them to avoid issues that growth-phase companies encounter in their development. The founders monitor all activities to produce quality artwork consistent with the mission of the studio and its partners.

We are a strategic outsourced partner that delivers on quality, with passion, at a very fair price. We’re building content not just for our partners, but for the millions of people who download the content. We want to deliver an exhilarating and unique experience.

A sign of the shift towards mobile in the entertainment and gaming industry, about 80% of the studio’s customers are mobile focused. The firm is flexible in its capabilities to deliver artwork for any style and application; however, it excels in applying its rich experience in project management to fully serve clients in the mobile industry.

One of the most interesting aspects of 5518’s startup story is the selection of its name. The name represents the distance between its Los Angeles and St. Petersburg offices. It serves as a symbol of the effective collaboration possible between cultures across such distances using modern technology and project management tools. 5518’s value proposition is built on the benefits in cost reduction and speed of project delivery through a business model that allows around-the-clock project development and prompt communication with clients in any time zone.

Syndicated and originally found on CSQ.com. The article, for reference, is here

Beginning in the late 1990s smart businesses commonly protected their innovative business methods with patents. That has now ended. In its June 2014 Alice decision, the Supreme Court set up hundreds if not thousands of issued U.S. patents on business methods for invalidation and seriously limited the ability to secure new patents. In part, the Supreme Court’s decision shifts protection of business methods to the implementation of the concept rather than to the concept itself. (This article emphasizes business methods, but most of the concepts also apply to applications software.)

In Alice, the Supreme Court clearly held that you cannot have a patent on business methods unless it includes a technical component which is innovative on its own. If your innovation arises from entrepreneurship, the fact that it is implemented with technology won’t help.

The U.S. Patent & Trademark Office issued a lot of patents before the Supreme Court changed the law. Now that the rules have changed, many of those patents will be held invalid if asserted. If someone else’s patents are troubling you, you should feel more optimistic. Congress and the PTO have made it a lot easier and less expensive to invalidate patents. Now, in addition to the courts, patents can be invalidated through procedures such as covered business method patent review, inter partes review, post grant opposition and ex parte reexamination. If you are sued on a business method patent, the court can now dismiss the case at the very start. Lawsuits can be paused while the PTO considers validity. The courts have quickly fallen into line with this, in part reflecting the burdens of patent cases on judges.

IP protection budgets in this post-Alice world have not changed, but the way those budgets are spent is changing. To protect business methods, including websites and apps, smart business people now focus more on copyrights and “design” patents. Protect your copyright and you can qualify for statutory damages plus attorneys’ fees. This kind of leverage can get a case settled quickly. You might want to consider design patents, which protect the designs on things not the designs of things, for icons and on-screen aesthetics. The good news is that copyrights and design patents can provide significant protection of business methods and cost a lot less. Many business people find that the total cost of protecting innovative business methods is about the same whether they pursue just patents on it or a more robust package which includes fewer patents but is rounded out with copyright and design patent protection.

I love patents, and patents serve multiple important business purposes, but patents rarely define a company’s success. For example, after 15 years in business, Microsoft’s annual revenue exceeded $1B, but the company had just five patents. Patents have not been Google’s friend, either (though like Microsoft it might need to rely upon them more to thwart antitrust enforcement). Despite Alice, patents should remain a part of almost any company’s IP strategy. Investors continue to want to see patents, and they continue to provide excellent market benefits and downside hedge.

WHAT SOFTWARE OR BUSINESS METHODS ARE PATENTABLE?

The test for the kinds of inventions that may be patented has gotten stricter, but originality alone has never been the test. So far, the courts have given little guidance about what is patentable. Case after case has held a business method invalid, and the US Patent & Trademark Office has also slammed on the brakes.

In general, nearly any kind of methodology that was done in the offline world will not be patentable.

Using mobile devices, networks, automated tracking, or “big data” to accomplish something probably won’t make a business method patentable either.

Technical innovations — typically the stuff of engineers and scientists – continue to be patented.

Despite the current unwelcome environment, this likely will change in time. Thus, a slower approach makes sense. Consider filing provisional patent applications, avoiding expedited examination, and filing applications in sequence instead of in parallel.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

It’s easier than ever to start a company, with the internet and social media allowing for direct-to-consumer companies to reach potential customers anywhere, anytime. But this type of market saturation comes with its own set of complications, one of the most prominent being the struggle for new brands to stand out from their competitors. So, how can companies distinguish themselves in such an overcrowded industry?

The answer is a simple one: purpose-led marketing.

[To read more of Erik Huberman’s thought leadership click here]

MARKETING WITH PURPOSE LEADS TO CULT-LIKE SUCCESS

Purpose is taking the stage as the heart of marketing, and with good reason! Finding and implementing brand purpose into your marketing has been shown to lead to incredible growth.

Purpose is often conflated to mean a brand’s commitment to social responsibility, but it’s actually much simpler than that. A brand’s purpose is simply the consumer needs it fills and the qualities that drive consumers to choose that brand over its competitors. In the simplest of terms, it’s leading your marketing with purpose works because it makes people care.

Consumers are inundated with options and choices. Businesses and employees need to be aware of their overall purpose in order to reach the highest levels of success. Purpose gets at the emotional side of someone versus objectively offering up the facts of a product.

In a recent survey, 80 percent of companies stated that a collective purpose is linked to customer loyalty and 89 percent said that it helps employee satisfaction. Companies need to do a compelling job of convincing consumers, and if you can convince those consumers on an emotional level, you win.

FIGURE OUT WHY YOU EXIST

Purpose reflects the merit, trustworthiness, and authenticity of a brand. All of those traits, in turn, speak to the brand’s potential for success. Trust and authenticity are two incredibly important traits to today’s consumer, with consumers becoming increasingly distrustful of ads and the brands behind them. Unifying a brand’s purpose with its message will inevitably help the brand create meaningful content and form an authentic connection with consumers.

The key to determining your brand’s purpose is figuring out your reason for existence.

The key to determining your brand’s purpose is figuring out your reason for existence. What is going to make a consumer pick you over your competitors? Is your company made up of individuals who support and embody that same purpose? Do your consumers know or care about your purpose and share that passion?

One event that highlights the brands that have built an empire around their purpose is The Gathering. There, the focus is on “cult” companies, those that have an “above average brand attachment,” recognizing and rewarding brands that build amazing cultures. Many of the brands awarded during The Gathering have been around and relevant for at least a decade because of their ability to uniquely engage their audiences.

If you want your brand to reach the same success, you must refine your craft and figure out what about your brand makes you special. What do you offer consumers that no other business does?

[For more on Hawke Media’s approach to Digital Agency click here]

Syndicated and originally found on CSQ.com. The article, for reference, is here

The need for speed in the digital forensics industry is attributable to the time-sensitive nature of investigations. To keep up with the case load and improve departmental efficiency, agencies and consultants are always looking for innovative technologies and evidence collection strategies. An emerging discipline and technology is digital forensic imaging. The field of digital forensics collects and analyzes evidence in the form of data. One of the most common procedures in digital forensics is hard drive imaging before data analysis.

To preserve the integrity of data, investigators use forensic imagers. This provides a verifiably untampered image of the drive. The distinctive feature of forensic imaging tools compared to hard drive duplicators are the built-in write blocker and evidence collection features. Workloads for investigative professions are often extreme. Corporate and enterprise investigations can involve dozens to hundreds of drives. This means weeks of recovered productivity when firms can implement faster technologies and processes.

An established firm in the digital forensic imaging field, Logicube is releasing the new standard in tools for forensic investigators: The Falcon-NEO. The device is a future-oriented solution created to improve efficiency in the forensic evidence collection process, a task for which speed is crucial to collect data promptly and proceed to analysis.

“Five years ago, we revolutionized forensic imaging technology with the launch of the Forensic Falcon. It set a new standard in digital forensic imaging technology,” stated Farid Emrani, President and CEO of Logicube.

The original Falcon, launched in 2013, still the industry standard, broke ground in the revolution of digital forensic imaging. There are thousands of units in use domestically and internationally by government agencies, police organizations, and investigative consultants. Logicube’s new solution offers a seamless upgrade from Falcon to Falcon-NEO, intuitive operation, unmatched performance, a streamlined evidence collection process, advanced features, and state of the art connectivity.

The Chatsworth, CA, based company has been a pioneer in the field of hard drive duplication since 1999. Logicube is known for reliable and cutting-edge solutions suitable for users in US and international markets. The firm’s products are sold globally through authorized dealers.

Designed to allow new and existing users to easily transition to the new device, the NEO supports all the common hard drive interface formats. Source and destination I/O card slots have been added to integrate future connections technology.

Another notable advantage is the extreme imaging speeds compared to competitors and the previous model: at imaging speeds of 50 Gigabytes per minute (Gb/min), it is 50% faster than the competition, and 60% faster than the previous generation Falcon, with negligible degradation in speed when imaging simultaneously from two sources to two destinations.

“Our engineering team has focused on new features and improvements that give investigators a tool that can securely capture large amounts of forensic evidence in the shortest amount of time in the field or in the lab,” commented Farid Emrani, President and CEO of Logicube.

While speed is important, the efficiency of the overall evidence collection process is equally vital. To complement the impressive imaging speeds, the device can simultaneously image, verify, and write from 4 source drives to up to 6 unique destinations. All source ports are write-blocked to preserve data and evidence integrity.

The Falcon-NEO further streamlines the collection process with the logical imaging feature that allows users to image only the specific files needed. A unique aspect of the Falcon-NEO is the ability to verify concurrently with the imaging process. The duration of the total imaging plus verification process time may be reduced by up to half. Extra time was devoted in R&D to refining the graphical user interface (GUI) for intuitive and nimble use. In addition to imaging, the Logicube release can also clone, wipe, and hash tasks concurrently at rates that exceed its imaging speed. The Falcon-NEO has two 10 GbE ports for extremely efficient imaging to network storage devices, and the ability to capture network traffic including online activity, email, and VOIP communications directly to an attached hard drive.

The Falcon-NEO is available now and will be featured at the upcoming 2018 Enfuse Conference, May 21st-23rd in Las Vegas, NV, and at the Techno Security Conference in Myrtle Beach, SC, June 4th-6th.

For more information visit logicube.com or follow on Twitter @LogicubeUSA.

Syndicated and originally found on CSQ.com. The article, for reference, is here

The good news is that you can insure almost anything! In M&A transactions, buyers and sellers spend a great deal of time allocating risk relating to known and unknown pre-closing liabilities.

The buyer’s view of the transaction is that other than specifically assumed liabilities, the buyer should bear no risk for pre-closing liabilities. The seller’s view is that the buyer is acquiring a living and breathing business and should take on those risks.

These differing views result in extensive negotiations of representations and warranties and related indemnities in the purchase agreement. In order to complete transactions and avoid conflict, buyers and sellers are increasingly turning to rep and warranty insurance (“RWI”) to have a third party bear some of these risks.

WHAT IS RWI?

RWI is an insurance product that covers losses stemming from inaccurate representations made as part of a sale of a company. It can be purchased by buyers and/or sellers, either before or after the closing of a transaction. RWI can cover one representation or all of them and serve as one of several avenues of recovery for losses or the sole means of indemnification.

So why are you hearing more about this insurance now? “Representations and warranties insurance has been around for over 15 years,” says Paul Albarian of insurance broker Lockton.

“It’s popularity has grown significantly in recent years, due in part to decreasing premiums as well as more robust coverage than previously available.”

WHEN IS RWI USED?

RWI can be used in any deal where either a buyer or seller wishes to mitigate against risks of unintentional and unknown breaches of reps and warranties. Buyers can obtain coverage for knowing misrepresentations by a seller that the buyer is not aware of. The following are a few of the common situations where its use may make sense:

• Risk-Averse Buyer/Seller. Some people just sleep better knowing they have risks covered by insurance. If you fall into this camp, purchasing RWI can help give you peace of mind that you have done everything you can to minimize the risk you will need to come out of pocket for unknown liabilities that are not already covered by other insurance.
• Large Number of Sellers/High-Risk Sellers. In deals in which there are a large number of sellers or some of the sellers are not financially sound, purchasing RWI backstops the risk that one or more of them cannot be found later or are insolvent at the time of the claim and cannot make a required indemnification payment.
• Selling a Business You Acquired. Many representations require a seller to verify certain historical statements about the target business. For example, a seller may be required to certify that there have been no violations of law during the 5 years preceding a sale. If the seller purchased the target during that 5-year period, the seller will not know this information. RWI may be used to bridge this gap.
• Buyer Differentiation. Typically, RWI is purchased by its beneficiary. In auction sales involving numerous bidders, buyers may actually agree to purchase policies for the benefit of the sellers as a way make that buyer’s bid more attractive.
• Means of Reducing Escrows/Holdbacks. Escrows and holdbacks are the traditional means buyers use to ensure that money will be available to pay indemnification claims. Since RWI provides an alternate means of payment from a financially sound third party, the buyer may be willing to accept a smaller escrow or holdback, allowing sellers to take home more money at closing. This feature has taken on additional value in recent years when interest rates for escrow accounts have been at historic lows.
• Seller Unwilling/Unable to Provide Indemnification. RWI can also be used when the seller is unwilling or unable to provide indemnification. For example, seller representations in public company deals typically do not survive the closing. ESOPs are also generally unable to provide indemnification. In these circumstances, RWI may be the buyer’s sole post-closing source of recovery.

WEIGHING THE COSTS AND BENEFITS>

If you are considering RWI, it is imperative to fully understand whether its benefits justify its costs based on your specific risk tolerance. Premiums commonly run 2 to 4% of the policy limit.

Like any other insurance policy, RWI also has a deductible, approximately 1% of transaction value. Note that this deductible is paid by the beneficiary and is in addition to any deductible “basket” negotiated as part of the purchase agreement’s indemnification provisions (the risk of which is borne by the buyer).

If you are considering RWI, it is imperative to fully understand whether its benefits justify its costs based on your specific risk tolerance. Premiums commonly run 2 to 4% of the policy limit.

To evaluate whether to obtain coverage, consider an example where a seller sells his or her business for $50mm in a transaction that has a deductible indemnification basket of $500,000.

The seller wishes to purchase a RWI policy of $10mm. Based on those assumptions, he or she would likely pay a one-time premium of approximately $150,000 for this policy. The purchase agreement might provide that the buyer would then bear the first $500,000 of indemnification losses, after which the seller would bear the next $500,000 of losses as a result of the insurance deductible, before the RWI policy would kick in up to the coverage limit of $10mm. The question is whether it is worth spending $150,00 to get coverage after $1mm of losses. Only the seller can evaluate the risk and value.

ONE SIZE DOES NOT FIT ALL

If you’ve decided that RWI is appropriate for your transaction, note that this is not an off-the-shelf product. “Rep and warranty insurance policies are individually negotiated and tailored to the specifics of your transaction,” says Paul Albarian. “As a result, it’s critical that you work with an insurance broker and M&A attorney who are both familiar with this very specialized product to make sure you’re getting the coverage that is right for you.” And since these policies can take some time to negotiate and bind, he also recommends that you start the process in motion as soon as you execute a letter of intent.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

If you are joining the e-commerce world, it won’t be an easy fight to the top. Everyone else is making the switch too. The industry that is estimated to top $4.2 trillion globally in 2020 is tough to crack, but with the right strategy you can guide your e-commerce store into a booming business.

Read more of Erik Huberman’s thought leadership.

At Hawke Media, we know e-commerce and we were built to help companies of all sizes succeed in e-commerce sales, but that doesn’t mean we don’t have to get creative. One innovative way to grow your e-commerce sales is through influencer marketing. It’s been a buzzword for a while now, but influencer marketing is now an established form of online marketing.

Choosing Your Collaborators

When you find someone to collaborate with your brand to help you market your product or services, it’s important to make sure they have the right authority and relationship with the niche audience that you’re looking to target. For example, if you’re working with a brand that is trying to promote their new sustainable skincare line, you want to work with beauty and skincare influencers with a large following who also care about and promote eco-friendly and sustainable living. Authenticity matters and you’re going to want to make sure that your marketing is catering to that influencer’s audience.

Even if you’re building trust with your chosen influencers’ audiences over a period of time, when you’re talking about online consumerism, influencers provide a direct line to ideal customers, driving traffic to your retail site.

A content creator with an engaged following giving genuine opinions and information via social media, a website, or even a blog is someone consumers feel they can trust. Using influencer marketing, you can tap into that content creator’s audience and the rapport they’ve already built with their followers. You don’t need influencers with a super high amount of followers as long as the influencer has a high engagement rate among their audience and an authentic and well-established voice within their niche space.

The Power of Word of Mouth

It’s not so much about instant results, and more about the process. Even if you’re building trust with your chosen influencers’ audiences over a period of time, when you’re talking about online consumerism, influencers provide a direct line to ideal customers, driving traffic to your retail site.

While ads are obviously great tools to drive online sales, consumers are relying more and more on word-of-mouth marketing over actually testing products. According to Tagger Media, “in 2020 consumers are trending towards buying more from reliable brands, retailers, and personalities they already know, like, and trust.”

A Long-Term Play

Tagger Media also found that brands “who cultivate long-term partnerships with aligned influencers will see a higher rate of engagement and sales that grows over time.” You have to look at the more granular data to see that teaming up with the right influencers over a long period of time will provide you with a greater ROI. Over time, brands start to see greater revenue from driving their customers to highly relevant media that’s closer to the point of purchase.

There’s even more data to back up this claim. A Google study found that when experiences are highly personalized, shoppers are more than twice as likely to add items to their shopping cart and 40% more likely to spend more than planned. As customers are researching and make more purchase decisions in a digital storefront, they look to personalized content to make those purchases.

Influencers and Instagram: Intertwined

It would be impossible to talk about influencer marketing and its impact on e-commerce strategy without talking about Instagram. According to Statista, global Instagram influencer marketing spend is expected to reach $8,080B this year and the number of brand-sponsored influencer posts on Instagram should reach 6.12M. Not to mention, it’s predicted that, by 2023, 125.5M users will be on the platform.

A Facebook Business study recently found that 83% of people discover new products or services on Instagram, 81% of people primarily use the app to search for new products or services, and, if they don’t find a new product or service on the app, 80% of people use its content to decide whether or not to purchase a product or service that they found elsewhere.

Instagram will be the major opportunity when it comes to influencer marketing, one you can’t afford not to capitalize on in the 2020 media landscape. You can find more than 500,000 influencers to choose from on the platform, so it’s fairly certain that you’ll find influencers who will fit perfectly into your brand’s niche and messaging strategy.

Harnessing Data

Influencer marketing is a way to execute your brand’s digital-marketing goals, but it’s also a great way to collect first-party shopper data to help your brand better understand its customers. How consumers are engaging with the way your influencers are presenting the brand will say a lot about what works and what doesn’t in terms of content. This way, you can A-B test different strategies in order to execute marketing plans that stick.

Learn more about Hawke Media’s approach to digital agency.

In this massive shift to almost fully e-commerce products on the market, influencer marketing is a creative tool that can be leveraged in your overall marketing strategy, especially because diversification of media nearest to the source driving revenue is everything in e-commerce marketing these days.

Interested in learning more about influencing marketing and its effect on e-commerce? Check out panels such as “From Influencer to Investor,” “How to Build Loyal Relationships in an Omnichannel World,” “Art of the Drop: The Intersection of Culture & e-Commerce,” “Using Storytelling to Connect & Convert,” and more, Sep. 28 through Oct. 2, when you sign up for Hawke Media’s eCommerce Week L.A.

Syndicated and originally found on CSQ.com. The article, for reference, is here.

First, these changes affected the way organizations function – social distance and remote work have become the new normal. Second, companies face much more scrutiny from outside of their internal environment, as their industries are subjected to more government intervention in the form of, for example, mandatory health and safety regulations. Third, businesses now have to deal with fresh and constantly developing market challenges, like rapidly changing consumer behaviors, newly appearing or disappearing market competition and broken supply chains, to name a few. Fourth, and probably the most significant change to the “old normal,” is the enormous drop in employment, with unemployment numbers reaching heights that haven’t been seen since the era of the Great Depression.

[To read more of Vlad Vaiman’s thought leadership click here]

Given all these facts, should organizations continue to care about talent management and spend their scarce resources on attracting, deploying, developing and retaining the best employees? In other words, is talent management (TM) still relevant? I would argue that it is still relevant, and perhaps more than ever before.

Health care, food and agriculture, public safety and other professions will remain in high demand for the foreseeable future. Others that we had long prioritized until March of this year such as information technology, machine-building, financial services and education will return to the forefront as soon as the economy stabilizes. Do not forget that the United States has experienced critical shortages in the IT industry for many years. Although unemployment is high, there still aren’t enough qualified IT specialists in the country to fill available jobs. The talent gap remains, so these shortages will persist.

It is difficult to find a silver lining in high unemployment, but it could be an opportunity to address the talent shortage by teaching new skills to some jobless professionals and inviting them to join organizations that are experiencing acute labor shortages. Also, after organizations in high-demand industries, including those deemed essential, have filled as many positions as possible with American workers, they should be able to tap into the international labor force to try to bridge the remaining talent gap. All these newly filled jobs will inadvertently lead to an increase in consumer spending, which will help reignite the economy. Unfortunately, while countries like Canada and Australia make it relatively easy for organizations to hire needed specialists from abroad, U.S. immigration policies remain prohibitive, exacerbating the problem.

During economic downturn, and even during the kind of deep recession that we are facing now, retention efforts become more essential. This is because smart organizations want to ensure that even after major layoffs they still have their best employees to carry them through the tough times and step up if and when the next crisis hits.

Smart organizations understand that in these highly uncertain times, human capital is the most sustainable advantage they have.

Although multiple studies show us that the higher the unemployment rate is the lower the possibility that people will voluntarily leave their organization, even high unemployment rates have little influence on the intent of talented individuals with highly specialized knowledge, skills and ability to leave.

Recent employee satisfaction surveys show relatively high scores, but that does not mean that organizations are in the clear. Some people, especially those in the most susceptible industries like hospitality and retail, are in survival mode. They are in a state of shock and disbelief about the pandemic and its economic and human consequences. Employees simply do not want to complain about their job satisfaction because they feel lucky they still have a job and can provide for their families. The longer the status quo continues, the more people – especially talented workers – will feel trapped in the same job, which will lead to quitting behaviors like absenteeism and emotional withdrawal which will ultimately lead to voluntary turnover.

Some experts indicate that, sooner or later, the unemployment rates will return to their lowest levels, which will be followed by an increase in voluntary turnover rates when the recession is over. So, if your organization already employs top talent, you will be able to enjoy that coveted advantage over your competitors, who might still be scrambling to find highly talented individuals in a swiftly tightening labor market. Therefore, you simply cannot forget about serious retention efforts, even if you think that talent is easy to come by now. Continuing to invest in your people, in their development and retention, sends a powerful message of stability and encouragement to your employees, which is especially important at this time.

[For more on California Lutheran University’s approach to Talent Management click here]

Although it may seem kind of counterintuitive to talk about TM now when the economy is in recession and unemployment is so high, I predict that the incredible efforts to attract, deploy, develop and retain the best performers will continue for the foreseeable future. Smart organizations understand that in these highly uncertain times, human capital is the most sustainable advantage they have. Only by leveraging it in the right way, with the help of meaningful TM strategies, can they survive and prosper now and in the future.

There are at least three key forces that constantly stimulate the war for talent: skills deficiency on the part of the existing workforce, a strong tendency for talented people to ride the waves of their employability by switching from one company to another, and the rapidly aging population. These forces, along with the limited supply of young and talented performers, will ensure that TM will remain among the most relevant issues in contemporary business management for years to come.

Syndicated and originally found on CSQ.com. The article, for reference, is here.