Archive for October 2013

Tenants eyeing historic digs

A specialty grocery store with an Italian flair is one of several prospective tenants circling the McGilchrist and Roth buildings at Liberty Street NE and State Street in downtown Salem.

Gayle’s City Market plans to occupy space in the McGilchrist building, said Gayle Caldarazzo-Doty, the founder of the start-up business.

She also is part of a local group that purchased the historic McGilchrist and Roth buildings in February. The adjoining buildings, both built in 1916, are undergoing renovations.

Gayle’s City Market, which would offer a selection of Italian groceries, local cheeses and fresh produce, intends to move into a 3,000-square-foot space most recently occupied by Heath Florist and Le Motive Hairdressing.

The business would include an Italian-style deli and a meat market, as well as a wine cellar and multipurpose room for events in its basement.

“I just think Salem is begging for something like this,” Caldarazzo-Doty said. The longtime Salem resident put together a business plan for a gourmet market in downtown Salem some 25 years ago, but bankers at the time were cool to the concept, she said.

Other businesses that have expressed interest in leasing space in the McGilchrist building include a small-plate restaurant and bar, and a coffee shop. Those prospective tenants haven’t yet finalized lease agreements and their names weren’t disclosed by the property owners.

Doty Company PC, an accounting and business planning firm, owned by Doug Doty, Caldarazzo-Doty’s husband, plans to move into the Roth building. Diversified Financial Benefits, a financial advising firm operated by AJ Stoll, will be another tenant of the Roth building.

The Roth and McGilchrist buildings have a combined total of 40,365 square feet including basement space. The property owners hope to have the remodeling work completed this spring.,

(503) 399-6657 or follow on Twitter @mrose_sj

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Survey points to skepticism among the mass affluent

Main Street investors remain pessimistic about their finances five years after the financial crisis, according to the 2013 Mass Affluent Investor, a new study released this week bySpectrem Group.

The mass affluent dont feel wealthy enough to require financial advising services, though they have a net worth of $100,000 to $1 million (not including primary residence). Many of them also say they havent built enough wealth to achieve financial goals like a comfortable retirement.At the same time, Mass affluent investors are reluctant investors who report a low tolerance for risk.

Mass affluent investors can benefit greatly from financial advising services, but theyre significantly less likely than millionaires to seek out the counsel of a financial advisor due to perceived risks, says George Walper Jr., president of Spectrem Group. The latter leaves them vulnerable to running out of money in retirement and falling short of other financial goals. Considering the mass affluent market represents some 28.4 million US households, the problem has broad societal implications.

Highlights from the 2013 Mass Affluent Investor report include:

  • Prevailing Pessimism: Fewer than half of the respondents indicate their finances are in better shape now compared to a year ago. And only 46 percent expect their situation to improve in the coming year.
  • Lone Rangers: Roughly one-fourth work regularly with a financial advisor. But less than one-third want to be actively involved in the day-to-day management of their finances; and a large share say they have little or no investment knowledge.
  • Risk Averse: Less than one-third are willing to take significant risks with a portion of their investments. And 21 percent say they regret not investing more conservatively in the years leading up to the financial crisis.
  • Retirement: More than 40 percent are unsure of having sufficient income to live comfortably in retirement, and 40 percent plan to work past the age of 65. Close to 40 percent of those younger than 54 say their household is not saving enough.
  • Concerns: The mass affluent are primarily worried about maintaining their own financial position, but close to 60 percent are worried about the financial situation of children and grandchildren. And more than half indicate they are caring for aging parents.
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Pension Withdrawal Liability Is Dischargeable In Bankruptcy

Under the Bankruptcy Code, an individual forced to declare personal bankruptcy cannot escape liability for certain debts that Congress has designated as non-dischargeable. Among these are debts arising from the breach of a fiduciary duty, such as the obligation a trustee has to the beneficiaries of a trust. Fiduciary duties may be created by contract (such as a trust agreement used in estate planning) or by statutes (such as state or federal tax laws that make an employer a trustee for the taxes withheld from an employees payroll check). Parties sometimes disagree about whether a particular duty creates a fiduciary obligation, or merely a legal or contractual obligation that can be discharged in bankruptcy.

The Ninth Circuit United States Court of Appeals resolved just such a disagreement in a case decided this summer. In Carpenters Pension Trust Fund of Northern California v. Moxley, ___F.3d ___ (9th Cir. 2013), the Appeals Court ruled that a debtors obligation to pay a withdrawal liability assessment to a multi-employer union pension fund was not a fiduciary obligation, but merely contractual, and therefore, could be discharged in the employers Chapter7 bankruptcy case. The Court rejected the Carpenters Funds argument that a withdrawal liability assessment should be treated for bankruptcy dischargeability purposes the same as a claim for unpaid pension contributions accrued during a past payroll period.

Michael Moxley withdrew from the Carpenters Fund (Fund) in 2005. His withdrawal liability assessment was $172,000. His small cabinet installation business was unable to pay the assessment, and Moxley filed a Chapter7 personal bankruptcy in 2008. However, the Fund filed suit in the Bankruptcy Court to have Moxleys personal obligation to pay the withdrawal liability declared a non-dischargeable breach of fiduciary duty, or defalcation claim under 11USC. 523(a)(4). The Funds argument was that under the carpenters unions collective bargaining agreement, to which Moxley was a party, claims for pension contributions constituted trust fund claims for which Moxley was personally liable as a fiduciary. The Fund argued further that a withdrawal liability assessment and an unpaid contribution claim are treated, for many purposes, as the same under the Employee Retirement Income Security Act of 1974 (ERISA). Therefore, according to the Fund, Moxleys failure to pay the withdrawal assessment should be just as much a breach of his fiduciary duty as would a failure to pay a pension contribution for a past payroll period.

The Ninth Circuit rejected the Funds argument. The Appeals Court distinguished the duty to pay a pension contribution from the duty to pay a withdrawal liability assessment, based on the different origins of these duties. The duty to pay current pension contributions arises under a collective bargaining agreement which creates an express fiduciary duty on the employers part to make ongoing contributions. The duty to pay withdrawal liability, however, arises not under the collective bargaining agreement, but under ERISA itself. Because ERISA does not specifically provide that withdrawal assessments give rise to fiduciary obligations, claims for such assessments are dischargeable under the Bankruptcy Code.


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Former Facebook, Twitter Growth Manager Heads to Wealthfront

Andy Johns, a former product manager on the growth team at QA site Quora, announced on Wednesday he has joined Wealthfront, the software-based financial advising startup. Johns new title is Director of Growth and Revenue, and will likely draw on the same experience he had on growth teams in the past at companies such as Facebook and Twitter. Most recently, Johns was a growth strategist-in-residence at the venture capital firm Greylock Partners.

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Turn an investment loss into a win

No one wants to lose money, but there’s an upside to the stocks in your clients’ portfolios that have taken a hit during the recession. You can help take the sting away from their investment losses.

There’s several ways of using those losses for tax advantages.

These client-friendly versions of articles you’ve seen on will help you lead the conversation about what to do with investment losses with your clients:

Capitalize on Investment Losses

Financial stability in transitional times

The value of worthless stocks

Unload worthless stock

AdvisorToClient is designed to make sharing our content with your clients easy. Use the site’s Action Steps, Conversation Starters and other tools help energize your client relationships.

They’re easy to share, just use the email tool in the upper right on each article page, or use LinkedIn, Twitter, or Facebook. Don’t worry, the versions you send clients won’t link back to AdvisorToClient or

Your clients are concerned about the value of their investments, and what it means for their wallets. These articles will help you reassure them and re-invigorate their enthusiasm for investing.

There are many more helpful resources to explore on a variety of financial advising topics at AdvisorToClient.

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Wigan Council Set to Ban Payday Lending Sites

Following Salford Council’s similar decision, the town hall in wigan have voted to ban payday lending sites.

Access to payday loan websites from Wigan Council servers and council owned advertising space will be banned next month.

The move follows last month’s cabinet meeting where councillors agreed unanimously to crackdown on irresponsible lending in the borough.

Instead, the council will promote other ways of accessing financial help, including raising awareness of the support offered by credit unions and offering money management advice and personal budgeting courses to help people manage their money more effectively.

Some councils in England, including Plymouth and Leeds, have already banned access to their websites from council computer terminals.

Councillor Terry Halliwell, cabinet member for corporate resources/customer at Wigan Council said:

“As a council, we have a responsibility and an opportunity to prevent people from accessing these websites and subsequently applying for loans which charge extortionate interest rates.

“Rather than get into more debt, we want to raise awareness of the alternative options available to residents, options which are manageable and affordable.”

For more information, including advice and support, please visit:

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Bankruptcy complaint follows Parsons to Texas

THR amp; Associates founder Jeff Parsons improperly took $86,200 worth of furniture and collectibles to a new residence in Texas, according to a complaint filed in federal bankruptcy court in Springfield.

Trustee Charles Covey said in the complaint filed last month that Parsons took with him $75,000 worth of furniture and contents, $10,000 worth of antique windup toys and $1,200 worth of Abraham Lincoln memorabilia.

Covey, who oversees Parsons personal bankruptcy case, said the move was an attempt to hinder, delay or defraud creditors. Parsons attorney, Michael Logan of Springfield, said Wednesday that he was studying the complaint, and that a response would be filed within the 30 days allowed.

Court documents indicated a summons was sent to Parsons at an address in League City, Texas, just southeast of Houston. Neither court documents nor directory assistance listed a phone number for Parsons.

Trustee Jeffrey Richardson, who is handling the corporate bankruptcy of THR amp; Associates, filed a similar complaint in June. The complaint alleged Parsons attempted to hide millions in income and assets from the bankruptcy court, including precious metals, jewelry and vehicles.

Parsons and THR filed separate bankruptcies in September 2012. The road-show company collapsed amid thousands of complaints of bad checks written at purchasing shows nationwide.

THR had its corporate headquarters in Springfield at the time of the company launch in 2010.

Covey said in the complaint Parsons also transferred assets to third parties, including family, a girlfriend and to Uncle Bucks Trading Post Inc. The Uncle Bucks in Lincoln recently was cleared out and closed.

Parsons son, Jacob, operated the Lincoln business, according to court documents. Covey said Parsons reported contributing $66,487 to start his sons business, which also would be a violation of the bankruptcy rules.

Both Covey and Richardson have asked that Parsons not be granted debt relief until the complaints are resolved.

Tim Landis can be reached at 788-1536. Follow him at

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A real death panel finally located

A Congressional Death Panel is trying to take over, and they simply want you and your family to die. Sarah Palin was right all along. She was just looking in the wrong places.

If you are sick, tough luck. If your feet are falling off from untreated diabetes and a diabetic foot ulcer, and you dont have insurance, just pull yourself up by your bootstraps. For Gods sake, just tie your gangrenous toe back on.

If you have cervical cancer, just pray it away. Close to bankruptcy from unpaid medical bills? Dont worry. Their new stricter personal bankruptcy laws will push you to an early demise. If youhad a baby last year, youre not ready to get pregnant again, and cant afford birth control pills, too bad. You shouldnt be having sex anyway.

We live in mean times, and mean people will stop at nothing to keep you and your family from having access to health care coverage. The extremist Death Panel is here, and they want to pull the plug on your family.

So nail your door shut, close your blinds, stock up on supplies because a real Death Panel has finally been located. Its in Washington, DC.

Jeffrey C Brenner, MD is a family physician in Camden, NJ and the Executive Director of the Camden Coalition of Healthcare Providers.

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Overdrafts can cost as much as payday loans

Some high street banks overdrafts cost as much to run as payday loans, according to consumer group Which?.

The consumer rights groups research found that borrowing pound;100 using an authorised overdraft with Halifax for 31 days costs pound;30, or pound;20 with some Santander accounts. That compares with costs of between pound;37 and pound;20 for borrowing the same amount over the same period from payday lenders.

The consumer group warns that just like the way borrowers rolling over payday loans rack up sky-high charges, the same applies when bank customers use an unauthorised overdraft.

Again, Which? made examples of Halifax and Santander. The Halifax Reward current account and the Santander Everyday Account can levy pound;100 in charges for going pound;100 into an unauthorised overdraft for a month.

The Financial Conduct Authority will start regulating the payday loans industry in April and has proposed a series of new rules to improve how the companies treat their customers. For example, strict affordability tests must be carried out before loans are made.

However, high penalty and default fees for payday loans, overdrafts and other high-cost credit products wont be subject to reform and Which? believes more must be done. It is now campaigning for the entire consumer credit market to be cleaned up.

Find the best loan for you

Richard Lloyd, Which? executive director, said: The Government and regulators have rightly focused on the scandal of payday lending, but they must not lose sight of the urgent need to clean up the whole of the credit market. High street bank overdraft fees can be just as eye-watering as payday loans.

Consumers need the credit market to work competitively. Its time to clamp down on excessive charges and irresponsible lending, and to make sure borrowers are being treated fairly whatever form of credit theyre using.

Which? is proposing five improvements:

  • A ban on excessive default fees and charges
  • A crack down on irresponsible lending
  • Put people in control of their credit (by ending automatic increases in credit limits and making unauthorised overdrafts opt-in only)
  • Clearly display the full cost of credit over 30 days, including all fees and charges, in pounds and pence
  • Force lenders to freeze charges for borrowers in difficulty.

Payday loan trade body the Consumer Finance Association (CFA) supports the campaign. Russell Hamblin-Boone, CFA chief executive, said: CFA members are responsible payday lenders who are committed to transparent communication with no hidden charges, so we fully support Which?s call for all consumer credit providers to step up to the mark.

People want and need clear, jargon-free information to help them make better financial decisions. Indeed, our own research shows that three quarters of people would prefer to compare financial products in pounds and pence and often have no idea how much it costs them to borrow money because charges are hidden or disguised by confusing APRs. So it is right to level the playing field.

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Social Media Coach to target financial services professionals

The new company, which will also be based in Milwaukee, has emerged with a new direction, aiming to educate professionals in financial planning, financial advising and retirement planning on the benefits of using social media outlets like LinkedIn.

Phil Gerbyshak, chief connections officer of the former Milwaukee Social Media, will lead Social Media Coach using his social media expertise and passion in tandem with his expertise in finance.

Its going to allow me to really blend my background and my passion, said Gerbyshak, whose career includes more than six years as a vice president in information technology at Milwaukee-based Robert W. Baird amp; Co.

While Milwaukee Social Media has catered to companies in a variety of industries since it started serving clients in 2012, Social Media Coach will cater exclusively to professionals in financial services.

Gerbyshak will help clients understand compliance complexities, approaches to social media strategy, and effective and efficient ways to apply social media tools to their profession.

While financial professionals may not have an immediate need to join social media outlets like Facebook and Twitter, staying updated on LinkedIn is critical to growing their client base, Gerbyshak said.

Prospective clients want to see that their financial advisor is up to date, and LinkedIn provides a gateway for them to look into an advisors background and experience.

That is where your target audience already lives, Gerbyshak said.

Gerbyshak, who is currently working with 15 financial services professionals, emphasizes that his role in his rebranded company is strictly coaching.

Thats what I do, Gerbyshak said. I work with organizations, and I dont do their social. I coach them so they can do their own.

While he will still continue serving clients from Milwaukee Social Media, he plans to focus most of his attention on his new niche of financial services professionals.

Gerbyshak predicts that within the next three to five years, most professionals in most industries, including financial services, will use social media platforms like LinkedIn to directly connect with prospects and referral sources.

So why not get ahead of the curve? Gerbyshak said.

This is an opportunity to be an early adopter, he said.

For more information on Social Media Coach, visit

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