Perspectives: Wealth

increase $212.7 million totalling $1.25 billion compared to FY20 which amounted to $1.04 billion. The increase stems from general and enterprise fund increases, partly due to wastewater, water and solid waste capital project funding, as well as more resources directed at stormwater, parks and facilities capital projects. What is more, Tampa will be dedicating US$3.1 million in new funding relating to sustainability and resiliency goals. All told, the region is on firm footing for a strong recovery, although there is still a ways to go. “Overall, this region has started to rebound but that does not mean we are out of the woods by any stretch of the imagination. As Tampa Bay recovers, confidence starts to build. As confidence builds, fear dissipates and no longer drives decisions. As the business community in Tampa becomes more comfortable and confident, we are able to see with a bit more clarity,” said Bank OZK’s Ronecker.

Insurance The Sunshine State’s property insurance market was dealt a complicated hand in the pandemic, navigating several fronts to ensure it came out on top of COVID-19’s

Perspectives: Wealth management

Jim Barnish

Founder & Managing Partner – Orchid Black There is this whole concept that everyone in the tech community praises around unicorns. Everyone wants to be the next unicorn, raising hundreds of millions of dollars to get to a billion-dollar valuation, oftentimes leaving the founder(s) with very little equity in their own company. Our philosophy is that not everyone needs to be a unicorn. Growing fast is important but growing smart is critical.

Devin Farrow

Regional Vice President – Mercer Advisors I think investor confidence levels are still high. There is also a caveat to that: part of why the market is moving up is because there are few alternatives. There are many people, especially retirees, who are invested a little heavier in stocks than they would have been in the ‘80s and ‘90s because of where interest rates are at. Generally, though, overall confidence is high among our client base.

Ray Ifert

President & CEO – REI Wealth Management We strongly believe in asset allocation and keeping an eye on how much risk is in each of our portfolios. We are not big believers in hedge funds because we saw what happened in 2008. People were led to believe that they were going to get equity-based returns with bond-like risk, which could not be any further from the truth.

John McDonald

Senior Managing Director – Hyde Park Capital Half of our clients are sold to private equity buyers and the other half to corporate strategic buyers. Most of our client companies are owned by aging baby boomers who are looking for investors/partners to provide shareholder liquidity and fund the future growth of their business. Most of these companies end up staying in the city but now have much more capital to grow than before.

William Sanders

President – Palma Ceia Wealth Management The vaccine has been embraced more than I initially anticipated. As a result, it sounds like we may experience herd immunity quicker than anticipated and from a portfolio perspective, we need to respond to that. We are currently focused on what we are calling “post pandemic” companies, with strong sustaining growth as we strive to arrive at some level of normalcy as a country.

Cary Putrino

Regional President, North Florida – Fifth Third Bank

North Florida is considered a high growth market for Fifth Third Bank. We believe in this region, and I’m so excited about our opportunities going forward. We have hundreds of people moving to the Tampa Bay region each day to enjoy the sunshine, the affordable tax environment and our friendly communities. We remain 100% laser-focused on taking care of customers and building relationships with new commercial, business banking, wealth and retail clients through our One Bank delivery model.

Despite ongoing digital evolution in the sector, retail branches will continue to be key in meeting the dynamic needs of consumers. ripple effects. 2020 brought about the convergence of long-term issues that the pandemic jolted to create a perfect storm. Reinsurance rose considering insurers used to purchase this coverage via insurance-linked securities. These funds are running scarce, meaning private reinsurers are claiming increased market shares. The latter absorbed losses by maintaining prices low for years to compete with securities and are raising prices now to recover those losses.

The increased number of hurricanes in recent years doesn’t help, either. Although a markedly seasonal phenomenon, 2020 was a record-breaking year for hurricanes in the Atlantic. Florida’s coast witnessed 30 storms, of which 13 land-falling storms evolved into hurricanes. That surpassed the 2005 record of 28 named storms, making it the highest number of hurricanes on record since 1900. To date, insurers are still paying coverage costs from hurricanes Irma (2017) and Michael (2018). Added to that, insurers in the Sunshine State have spent the better part of a decade criticizing how Florida law enabled fraudulent or excessive claims for damages unrelated to storms.

The industry was not lacking success stories, however. Tampa’s technology-based, HCI Group subsidiary specialized in flood insurance, TypTap, is finally profitable after its launch in 2016. The favorable setting comes from a Congressional revamp of flood insurance — the National Flood Insurance Program — which triggered a premium hike. The firm provides 9,400 policies and generates more than $12 million per year in premium revenue.

The local insurance industry also witnessed a solvency-maintaining merger between Southern Fidelity and Capitol Preferred. The two domestic property insurers are joining forces after reporting multimillion-dollar losses for several years.

Despite a challenging matrix of a deadly virus and increased tropical storm activity, Tampa Bay’s 10 largest property and casualty (P&C) insurance brokerages managed to write local P&C premiums totalling $1.35 billion; $2.4 billion in total local premiums written, and employed 1,677 people locally as of May 2020. The Top 3 insurance brokers are Bouchard Insurance, A Marsh & McLennan Agency LLC Company, with $228.5 million of local P&C premiums; followed by Stahl & Associates with $211.3 million; and Baldwin Risk Partners at $200 million.

Looking ahead Undoubtedly, COVID-19 will continue to have lasting effects on Tampa Bay’s banking and finance landscape. Mortgages, delinquencies and insurance premiums will need to be closely monitored as the region prepares for a strong rebound on the back of its strong fundamentals. Moreover, the impact of the CARES Act and the PPP loans will go a long way to securing the business and economic activity that fuels the need for extra capital for growth. One key, which Bill Lutes, market president for Tampa Bay and Southwest Florida at Ameris Bank, said was highlighted by the pandemic is leadership. “The pandemic really unveiled leadership or lack thereof. It is a black swan the likes of which we have not seen in recent history,” he told Invest:. “For every one of us in the enviable position of growing during this turbulent time, there are five others that have had to make some tough decisions. Our recommendations are to look in the mirror, be honest, soul search, be candid and try to think outside the box. We have an opportunity to get rid of old paradigms, try out and adopt new ones. That is the overlying theme that many of my conversations with clients seem to center around.”

The pandemic has also had an impact on financial behavior as lockdowns and stimulus money put more cash in savings, while also demonstrating the need to reduce lavish lifestyles to secure future wealth, said Jorge Blanco, president of Success Wealth Management “People have figured out a way to lower their sometimes-lavish lifestyle. Having good cash reserves is the foundation of any solid financial plan. It’s not about how much investment, but having a solid cash reserve of three to six months. If you are in a position where you rely on commissions, people should maybe think about having six months to a year for expenses. If you don’t sell a house for months, you don’t want to fall into debt, or start selling investments that are for the longer run.”

In a survey conducted by LCG Advisors and covering 17 Southeast middle-market private equity firms, 65% believe 2021 will be a year of significant opportunity. The latter stems from the region’s achievement of consolidating a favorable environment and sturdy ecosystem for the effervescence of fintech and banking startups looking to bring Tampa Bay’s financial landscape to the next level. The level of optimism is also directly correlated to the vaccine rollout. Should the pace be maintained, that will act as a prelude for recovery and rebound. The bullishness in the private sphere is mirrored in the public sphere. Tampa and St. Petersburg’s mayors both expressed at the end of 2020 that they were optimistic about the future normal their respective cities were preparing for.

Phil Dingle

Managing Partner – HealthEdge Investment Partners

The last data I saw, probably pre-COVID, mentioned 1,000 people a day moving into Florida. And I think half of them were coming to the Tampa Bay area, which is exceptional. We have to continue to make it an attractive place, not just for people but for businesses to relocate. This means we need to continually work to be the best in class in terms of our education system, our regulatory environment and our infrastructure. As a deeply entrenched member of the local community, I’m proud to see what we’ve accomplished in recent years, and I believe this will only accelerate in years to come.

Healthcare:

As the COVID-19 pandemic slowly winds down in the United States, the health sector in the Tampa Bay region has a bright future. The pandemic itself has resulted in a shift in dynamics across the area at large, with telehealth a key emerging trend. Challenges remain, and how these are tackled will have an impact on future growth.