Market voices: Financial

Drew Catanese

Managing Director Coastal Wealth

The field of behavioral economics exists because people as a whole are rational but people individually, when it comes to their finances, let their emotions into it too much. We set expectations with clients. We like to set strategies when times are calm, not when there’s a hurricane on its way. We find a plan, develop our strategies and put the right things in place now so when that black swan event happens, we have the plan in place already and know why it’s there. People hire professionals because we can help them take the emotion out of investment decisions and help make them rational decisions, both in good times and bad.

I would say that 90% of our job is to shape behavior. For many years, the financial planning community said that one could expect to withdraw about 4% of your capital that invested 60% equity/40% fixed income. They came back and revised that — now it’s at about 3.89% return. That’s because bond interest rates have gone down. Do I think we’ve fundamentally changed? I would say, no, we’ve stayed the same; however, we’re trying to elevate income. You may do more preferred equities as opposed to being heavily laden with bonds. Bonds are there, really, as a ballast for risk. James Erb

Founder & CEO Continuum Wealth Partners

Terry Igo

CEO Tampa Bay Trust Company

We remain highly positive for the 2021-22 time frame. We cannot look past 2023 with the financial tea leaves. We don’t see any major obstacles considering the unique physical location of being in Florida and its west coast, added to corporate profits and the outlook for corporate profits being strong with interest rates being low. Some people make a lot of noise about administration changes. Time will tell you it doesn’t matter who the president is as far as managing money goes. There are definitely going to be some changes, as happens on a four to eight-year basis. There’s always enough time to react to those changes. We don’t see it affecting us at all.

Low interest rates affect the future growth of investment opportunities and have forced us to go back to studying low interest rate environments around the world; Japan in particular. When you see a scenario like that play out, you look to incorporate that into the investment recommendations you make so that you don’t get caught in a similar trap. The goal is to shield our investments, our clients from suffering as a consequence. We correlated that in-depth analysis to previous examples we have around the country and then used it to navigate the national and local low interest rate environment. Travis Jennings

Founder & CEO Finance CAPE

( ) Solutions; Florida Medical Clinic; and McDonald’s restaurants operator for the region, JTS Enterprises.

Regulations Pressured to become remote by force and bolster their digital banking systems to accommodate both the surge in online banking and PPP loan applications, concerns over increased fraud and cyberattacks within the online financial network rose as feeble safeguards opened finance outlets to attacks.

This concern gains all the more relevance considering that pre-COVID, Florida ranked 10th in Wallethub’s most vulnerable states for identity theft and fraud, in a report released in October 2019.

Banking is already a heavily regulated sector in the country, particularly due to the fallout from the 20089 crisis, which means that financial players, whether big commercial banks, community banks, small local banks or startups, are engaged in a constant, complex and often resource-consuming process of continuous regulatory framework monitoring. The increased relevance of cybersecurity, added to the burgeoning fintech sector and the acceleration of innovation trends triggered by COVID-19 could likely result in added layers of regulation that financial entities need to be on the lookout for.

Increased reliance on AI, machine learning, digitalonly banks, blockchain, omnichannel strategies, enhanced data analytics, fully mobile banking and regtech (regulatory technology) are but a few of the trends that will continue consolidating and cementing a new era of growth and expansion for financial activities. Regtech itself is poised to become a welcomed solution to liberate the use of financial entities’ resources in terms of time, capital and manpower dedicated to ensuring compliance across jurisdictions.

The dampening effect of regulatory compliance on financial entities’ growth bodes well for the future prosperity of the global regtech market, estimated at $6 billion in 2020 and projected to grow toward the $13.4 billion mark by 2025. Widespread adoption of these technologies across Tampa Bay’s financial players should therefore be expected as it constitutes a major competitive advantage of ensured compliance and costefficiency.

Moreover, Tampa Bay’s financial ecosystem and corporate fabric might want to review their ESG policies and portfolios. Tampa Bay area-based Climate First Bank