Torrey Pines Bank Rolls-Out “Advancing the Cause” to Help Generate Donations for Three Non-Profit Organizations

Customers of Torrey Pines Bank in San Diego, Los Angeles, and the Bay Area may wonder why their banker or branch VP is wearing a T-shirt to work, but it’s for a good cause.  The bank is launching “Advancing the Cause,” a campaign designed to encourage employees to give back, while adding a little fun at the same time.

Staff members choose the non-profit they’d like to support — the National Multiple Sclerosis Society (orange shirts), the Alzheimer’s Association (purple shirts), or the American Heart Association (red shirts) — and receive specially designed T-shirts proudly displaying that organization’s logo.  Each week the employee has the option of paying $5 for the opportunity to wear their red, orange, or purple logoed T-shirts and jeans that Friday.  The money collected will go to the chosen organization.

The campaign kicked-off Friday, April 4th.  Employees from the Torrey Pines Bank Los Altos Office are pictured here.  The program runs through Friday, September 26th.  While this is a program intended for employees of Torrey Pines Bank, the bank will gladly accept donations from anyone who wants to stop in to one of its offices to contribute to these worthy causes.  Torrey Pines Bank has given over $2.5 million to local philanthropic causes and continues to be a big supporter of the local community since 2003.

Advancing the Cause



Founded in 2003, Torrey Pines Bank is focused on providing customers with direct access to local experts who can help advance their businesses and the local economy.  The bank has 11 offices throughout San Diego, Los Angeles and the Bay Area.  It is a recipient of the Peak Performance Award (National University School of Business), one of only 35 California banks recognized by the Findley Reports for achieving “Super Premier” performance and recently received a “Superior” ranking, the highest category and “simply the best by all measures” (IDC Management’s fourth quarter report of Bank Management Review).  Executives attribute the bank’s success to its prudent banking practices, financial capacity, strong focus on customers and commitment to providing them with leading bankers who hail from the areas in which they serve.  Torrey Pines Bank is a division of Western Alliance Bank, a wholly owned subsidiary of Western Alliance Bancorporation.  More information is available at

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Is The Next Market Crash Imminent?

Robert Isbitts of Sungarden Investment Research is sounding alarm bells regarding the following numerical coincidence he discovered:

  • From September 1, 1995 until the peak of the tech-bubble on August 18, 2000, the S&P 500 return (excluding dividends) was 165%.
  • From March 6, 2009 (the Great Recession bottom) through February 26, 2014 (around now), the return was an almost identical 164%.

What’s significant about this?  Two identical market returns over two identical periods of time (1,813 days or just under five years), and the first was followed by multiple years of negative stock returns.  Isbitts further points out that the market rally in between these two high-growth periods (from October 11, 2002 until the October 12, 2007 peak) generated a lower 95% return but lasted almost exactly the same period of time in days (1,827) before collapsing.  He additionally warns that today looks and smells a lot like the year 2000, the peak before the first crash.

Armed with these facts, what should an investor do?  Basically, you have three choices:

  • Ignore them.
  • Sell everything (or at least all your U.S. stocks) now.
  • Sell some of your stocks just in case and try to figure out when would be a good time to buy them back.

To me the right answer is obvious.  If you are following an investment strategy that’s based on both growing your savings enough to support all your future goals while trying to manage the risk, then choice one is the right one for you.  Your focus should be on an appropriate diversification model and on the selection of investments (I prefer mutual funds and ETFs) that have been shown via research to outperform with persistence over time or to minimize the volatility of returns in their respective asset classes.  Market movements have nothing to do with such a strategy so you’d do best not to pay attention to them.  This is not to say that you should simply buy and hold your investments.  Rebalancing them periodically is necessary to ensure your asset allocations remain supportive of your growth goals and of your risk mitigation objectives.  Adjustments to the investment strategy may also be needed due to life changes that occur.  You can also look at market dips as buying opportunities, or even consider periodically increasing or decreasing the weightings in asset classes which you believe to have become undervalued or overvalued, although timing that can be problematic since such trends can last for many years.

Choices 2 and 3 both involve market timing, which I frankly do not believe anyone can do consistently.  It requires not only knowing what information will drive markets up or down but also the ability to act on that information before anyone else does.  And if you choose to get out of the market because you fear a drop is imminent, your will be faced with the additional question of when to get back in.  Those are two very hard decisions to time correctly.

I agree with Isbitts insofar as he warns investors not to become complacent in today’s stock market, by many measures highly-valued historically.  It’s common nature during rallies for us to focus more on the opportunity for gains.  But as stock prices continue to rise, the risk of losses (or at least the risk of future underperformance) becomes greater.  These are the times when we should become more cautious with our investments, not adding to the risk by striving for increasing yields, as many investors seem to be doing right now.

In case you’re wondering what happened after the market peaked in 2000, these were the total returns for the subsequent decade:

  • One year: -21%
  • Three years: -33%
  • Five years: -18%
  • Ten years: -27%

If you’re in the stock market for the right reason (growing your savings for a purpose in a disciplined, risk-managed way), don’t get distracted by prognosticators warning about looming market crashes.  You may lose a little money in the short-term, but over time you will do fine.

Artie Green

Artie Green, CFP, MBA

Artie Green, CFP®, MBA, is a CERTIFIED FINANCIAL PLANNER™ Professional and principal at Cognizant Wealth Advisors.  He can be reached at 650-209-4062 or at

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Buying A Business

Buying a Business

Every entrepreneur dreams of owning a successful business. However, many people do not want to take the risk of starting a business from the ground up. As an alternative, you can buy an existing business.

People buy businesses for a variety of reasons. It is easier and faster than starting a company from scratch. The assets, suppliers, and consumer base already exist. Also, banks and other lenders are more likely to offer you a loan for an existing business.

However, there are still many complications that can arise. This article examines the major legal issues that can occur if you decide to buy a business.

The Deal

The most basic aspect of buying a business is that you are making an agreement to take ownership of a business. This might sound like a no-brainer, but the buyer should understand what exactly he or she is purchasing and should include every detail in a written contract.

Before signing an agreement, you must carefully verify the seller’s information. Lawyers call this “due diligence.” Look at the company’s financial and legal records. Do their financial statements match the reality? What is their projected outlook for future growth? Are they in debt? What kind of contracts do they have with suppliers? Are there any copyrights or patents? If you’re buying a bar or convenience store, do they have a liquor license?

Don’t be afraid to ask these questions. If the seller is less than forthcoming with the answers, ask yourself why they want to sell the company in the first place. Hiring an accountant and an attorney to double-check the numbers and the paperwork will save money in the long run. If you prefer to keep your findings secret, a confidentiality agreement will keep lips sealed.

There are two common mistakes buyers make when closing a deal. First, the Internet makes it easy to assess a company without ever visiting the business. If the company is online only, that’s understandable. However, if the company has a brick and mortar building, you should definitely make a physical inspection. Checking for building code violations is helpful, but making a physical inspection allows you to interact with customers and employees in person. If you plan to take over, meeting the people who will make you money is crucial.

The second mistake is that some buyers will fall in love with the business and ignore all the risks. Buyers sometimes ignore risks even if they have carefully run the numbers and found that the business isn’t as profitable as it first appeared. If you find yourself ignoring all the potential downsides, look for a second or third opinion. The law protects against fraud and misrepresentation, but it does not offer protection from bad business decisions.


One way to assess risk is to examine the type of business insurance the seller currently has. Checking insurance allows you to become familiar with the company’s insurance policies and allows you to assess what types of legal risks might occur. A manufacturer typically carries product liability insurance. Professional firms, such as real estate brokers, attorneys, dentists and doctors use malpractice insurance. Delivery services will have automobile insurance.

In the rare case that the business doesn’t have any form of insurance, check if they are breaking any laws. For example, many states require professional firms to purchase malpractice insurance, unless they hang a sign outside their office stating they don’t have insurance (one more reason to make a physical inspection). Likewise, starting in 2015, employers with 50 or more employees are required to offer health care insurance to their employees.

Terminating Employees

If you buy the business, there are two crucial employment questions: can you terminate an employee and can you retain an employee? Look through employment contracts, if any, to check the terms of employment. Even if a business changes ownership, the employee can still retain her job through a contract. Otherwise, the new employer is free to terminate employment at-will.

Employees who feel they were mistreated by new management will sometimes start their own business – near their former workplace. Therefore, buyers should also check employment contracts for non-compete clauses. Non-compete clauses prevent former employees from directly competing with your newly acquired business. You should also consider negotiating a non-compete clause into the contract with the seller.

Keeping Employees

Although at-will employment typically favors the employer, business acquisition is one situation where the employer is at a disadvantage. This is important to understand in instances where you are purchasing a business partly for its staff.

If the buyer wishes to preserve staff, the buyer should treat the employees well before the deal is made. Although good will alone won’t keep employees from walking out the door, it does set the stage for employment contracts. Employment contracts can prevent employers from firing employees; they can also bind employees to the company. However, convincing an employee to stay with a company, despite the change in ownership, will often result in terms which will favor the employee.

Alternatives to Buying a Business

Even if you are determined to purchase an existing business, you should take a step back and consider the alternatives. The reality is that not every business will be worth buying. Moreover, not everyone is prepared to run a business alone.

Here are three ways that you can run a business without completely committing to buying it outright:

  1. If the costs and stress of buying a business is overwhelming to you, consider buying the business with a person you trust. Although you won’t have full control in a partnership, you won’t have to go into business alone.
  2. Consider leasing the business with an option to buy. You can “test drive” the business for a period of time and then you can purchase the whole thing if you find the experience worthwhile. Finding a seller who is willing to lease with the option of buying will not be easy, but this is a common business tactic.
  3. Consider purchasing a franchise. This can be a realistic option if you would like to have promotional support from a parent company.

Peter Clarke

Peter Clarke, JD, is the content manager for in South San Francisco.  He can be reached at





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Looking Into the Crystal Ball On Our Area In 2014

Doctor Robert Eyler, economist and director of the Executive MBA program at Sonoma State University, discussed the current, and future, state of the local economy on January 28.  The event, “The Crystal Ball: Economic Outlook 2014,” hosted by Torrey Pines Bank, and held at Scott’s Seafood Restaurant in Oakland drew a packed room of local business owners and executives. Doctor Robert Eyler made a number of observations about the future of the local economy, including:

  • Both California and US economies show some signs of peaking in growth in 2014, including the rapid growth of the housing markets in 2013 starting to slow.  Lack of new business growth overall and consolidation, commercial real estate demand rising (back in single-digit vacancies), and interest rates starting to show upward pressure with natural cyclic movements.
  • Forecasts are solid for the US and California economies with no recession predicted through 2016 currently, interest rates expected to be 4.5% on 10-year Treasuries by 2015, and drought not anticipated in California in any models at this time.
  • He sited major, long-term challenges (through 2020) to the state, including the potential loss of innovation in this generation, the economic climate becoming less business-friendly, demographic shifts to higher cost of living and the issue of education gaps in the state. He also expressed short-term challenges for California in 2014 and questioned whether there would be another tech innovation bump,  as well as the impact of equity market cycles on state budgets.  Eyler also brought up the question as to whether sales tax initiatives could be funded exclusively by tourism and residents.
  •  In the Bay Area specifically, he cited continued economic growth of about 4% in 2014, with labor market and income growth producing jobs in services.   Eyler cited that the area’s current run of tech is slowing down with San Francisco and San Jose remaining innovation centers for the globe. He anticipates that residential real estate is likely to slow growth in 2014, with interest rates rising.  Commercial space vacancies will continue to slowly fill up, with about 107 million square feet of space currently in inventory and 15.5 percent vacancy and prices rising for space in Oakland and Pleasanton in particular.
  • Eyler suggested the key drivers spurring Bay area growth are ‘classic tech’ (and the evolution to media companies and mobile apps continuing to grow and starting to mature), life sciences (offering longer time frame for investors and longer path for jobs) and services (including logistics, marketing, professional services). .
  • Finally, he pointed to the local aging population continuing to rise and representing a shift in consumer and government services demand, as well as a potential lack of available workers for local positions.

Torrey Pines Bank’s Aventine Network Series pays homage to Aventine Hill, a strategic point for controlling trade and commerce on the river Tiber in ancient Rome. The series is an opportunity for local business leaders to meet and discuss strategies critical for winning in today’s complex and competitive markets.


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The Time to Plan Is When It’s Not Needed

I received a call last year from a woman who’d sounded desperate.  “I was just offered an early-retirement package from my company,” she’d said, the words rushed from anxiety, “and I’ve got two weeks to make a decision.  Can you help me?”  I had groaned inwardly, imagining the late nights ahead struggling to collect the necessary data, performing the analysis, and clarifying the results in a way that would enable her both to understand and to take action.  But of course I did what I could to help.

It’s not uncommon for us to put off planning for something until we see the need for it.  That’s human nature.  But it’s also risky.  Have you made a list and stashed away emergency supplies in case of an earthquake?  What about a tornado?  The latter may sound remote but one actually touched down in my backyard in 1998.  The cost and stress of recovering from an unplanned problem is usually much higher than if we had planned for it.  And we typically learn this lesson after it’s too late.  When was the first time you started backing up your computer hard drive: before or after your first disk crash?

A recent survey by Nationwide Financial found that 26 percent of potential investors do not have a financial plan.  Even worse: 38% of those that do not have one have no intention of getting one.  “We live in an era when Americans are more responsible for their own financial security than ever before,” said Michael Spangler, president of Nationwide Funds. “However, for various reasons far too many haven’t taken the time to draft a detailed financial plan to help them achieve their goals over the short, medium and long terms.  An effective plan is much more than opening a savings account or investing in your employer’s 401(k), it’s a map to ensure that you get to your financial destination.”

Without a financial plan, we are left unprepared for life’s big transitions, such as a job loss, marriage, divorce, birth of children, buying a house, inheriting money, death of a loved one, and other countless events that can have such a huge impact on the quality of our lives.  And the emotional upheaval these life transitions cause us makes it extremely difficult to make good financial decisions when we’re in the middle of one.  The time to plan is before the event occurs so that we’ll be much better prepared to effectively manage the transition and its financial impact and not get sidetracked by all the pain and stress.

Probably one of life’s biggest transitions is retirement.  US News reported that in 2009 between 60% and 80% of baby boomers had expected to work past age 65 as a way to overcome the devastation of the Great Recession.  Unfortunately, many failed to consider the employment situation or their health as factors.   As a result, according to a follow-up survey by MetLife, over half of the first wave of baby boomers to hit retirement age had stopped working before they’d planned.  Many still hope for part-time jobs or developing new careers, but have been struggling to find them.

The missing element in their plans was the inclusion of alternative scenarios.  As humans, when we make guesses about the future, we almost inevitably predict more of the same.  Unfortunately that’s not how life works.  When we include different scenarios in our plans, we reduce our vulnerability (both emotionally and financially) to unexpected changes.  And the younger you are, the more likely you are to face a curve ball or two at some point in your future.

To summarize, the time to make a financial plan for your future is now, not when you’re in the middle of dealing with a major life transition such as divorce or job loss.  And a robust plan should include several scenarios to ensure you’re prepared for at least some of the major issues life could throw at you.

Artie Green
Artie Green, CFP, MBA

Artie Green, CFP®, MBA, is a CERTIFIED FINANCIAL PLANNER™ Professional and principal at Cognizant Wealth Advisors.  He can be reached at 650-209-4062 or at

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Why Is Good Annuity Advice So Difficult To Find?

Annuities can be a very valuable part of an investment portfolio.  Unlike stocks & bonds, they provide guaranteed income for as long as you live (at least to the extent supported by your state’s Life & Health Insurance Guarantee Association).  But getting help on what kind of annuity to buy (let alone which one specifically) can be surprisingly difficult.  Here’s why.

The first thing to know is that an annuity is a contract between you and the issuing insurance company.  You give them money up front and they promise you a stream of income over your (and possibly your spouse’s) remaining lifetime.  Obviously you need to read the contract in order to understand the details of how you will be paid back.  That’s where it gets complicated.  For the simplest annuities, single premium immediate annuities (SPIA), the documentation is fairly straightforward.  But for more complex variable annuities such as equity indexed annuities (EIA) or Guaranteed Minimum Withdrawal Benefit (GMWB) annuities, the contract can run to 20 or 30 pages, and the details of how the various calculations and limitations are defined can have a significant impact on your actual withdrawal or income benefits.

If you do not have the inclination to figure it all out yourself, where do you turn for advice?  All insurance products are sold via commission.  You may or may not get a good detailed explanation about a specific annuity from the salesperson, but you certainly will not get a comparison of that annuity with other similar annuities from other companies that might have better benefits or lower premiums.  You are also unlikely to get help comparing the annuity income with alternative investments that might be more appropriate for your situation, simply because the salesperson doesn’t sell them.

Consumer support organizations and publications such as Consumer Reports logically would be another good source.  But again, because there is no standard for annuities like there is for auto and home insurance, a review of one annuity wouldn’t tell you much about any others.  As a result you won’t find more than general information and advice about annuities from these kinds of sources.

That leaves financial planners and independent advisors.  Because they are held to a higher standard than insurance agents (they are required to have a fiduciary responsibility to their clients, meaning they must put their clients’ interests ahead of their own), they must consider alternatives and recommend what they believe is the best choice specifically for you.  Many advisors don’t like annuities because of their complexity and lack of standardization.  Each one is different, and even similar sounding annuities from the same insurance company can have different terms & conditions.  And, just as with auto and home insurance policies, the premiums for annuities with similar benefits can vary widely from company to company.  The only way a financial planner can do a cost-benefit analysis of a complex annuity is to read the contract in detail, which involves a lot of time and effort.  And then he or she needs to compare it to other annuities as well as to other investments.  Imagine how many hours that all takes.

Are there alternative investments that are safe but better than annuities? Again, it depends on the specific annuity, as well as your goals in considering one.  I evaluated one client’s EIA by comparing it to an equivalent amount invested mostly in ultra-safe zero-coupon 10-year US treasury bonds (called strips) plus a small amount in an S&P 500 index fund.  I compared the returns over the 10 year period from 1990 through 1999, which was one of the best performing decades for the S&P 500 in recorded history (432% cumulative), and over the 10 year period from 2000 through 2009, one of the worst decades (-9% cumulative).  I found that in the best decade, the investment beat the annuity by 107% to 48% (cumulative). In the worst decade, the annuity returned 36%, while the investment, without any guarantees, returned 29%, not much worse.  The client, who was very risk-averse, appreciated the fact that an investment mostly in US government bonds (which, by the way, are safer than any annuity investment) can mitigate much of the risk even without minimum guarantees.  His insurance agent did not explain any of this.

Again, annuities can be useful tools for retirement.  But the decision to include one in a retirement portfolio depends on a number of factors specific to each family’s situation. If you are considering annuities on your own, especially complex ones such as EIAs or GMWBs, there’s a lot of due diligence you really need to perform to make sure you’re getting what you think you’re getting.  And until the various state regulatory agencies impose standards on annuity contracts, you should plan to devote many hours learning about them before making a decision to buy one.

The bottom line: Caveat emptor!

Artie Green

Artie Green, CFP, MBA


Artie Green, CFP, MBA

Artie Green, CFP®, MBA, is a CERTIFIED FINANCIAL PLANNER™ Professional and principal at Cognizant Wealth Advisors.

He can be reached at 650-209-4062 or at

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