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Top Bay Area Financial Advisor Celebrates 50-Year Legacy in Financial Services

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Top Bay Area Financial Advisor Celebrates 50-Year Legacy in Financial Services

Hillis Financial Services CEO looks back on industry changes over 50 years, prepares next generation

SAN JOSE, Calif –Hillis Financial Services, a veteran financial services practice in the Bay Area, today honors CEO Jack Hillis for his 50 years of success and for his dedication to preparing the next generation of financial advisors.

“The key to success in financial services is knowing the past – the most expensive words on Wall Street are ‘This time is different,’” said Hillis. “I was on the front lines during three of the four worst market declines in the past 100 years, the Oil Embargo of 1973, the 2000 Tech Bubble Bust and the 2007 Financial Crisis, as well as witnessed the market drop 22 percent on ‘Black Monday’ in 1987.”

“Despite those declines, the Dow Jones Industrial Average has climbed from a low of 689 in 1971 to over 26,000 in 2018,” continued Hillis. “After 50 years, I still learn something new every day and still come to work exhilarated. I constantly remain optimistic about the future and look forward to the coming years.”

According to Hillis, he has seen just about every mistake that investors can make – and witnessed the effects of fear and greed – as well as observed key tactics that make investors successful.

During his 50-year career, Hillis has seen current events, market movements, regulations and new technologies spur watershed changes within financial advisory. To truly understand the industry, it’s important to be familiar with the industry’s profound evolution over the past 50 years.

“When I entered the industry, everyone was a stock broker and financial planning didn’t exist,” said Hillis. “In 1968, investment choices were quite limited and commissions were fixed and very high. Each firm used the same commission schedule and it was non-negotiable. For an investor to get an active stock price he had to call a stockbroker.”

Below is an outline of Hillis’ five-decade career in financial services, written in his own words. It includes his overview of the decades, highlights historic events and related impacts on the market, and spotlights industry milestones.

1968 to 1979

January 1968 was quite an interesting time to become a stockbroker. The Dow Jones was trading in the low-to-mid 900s and investors were anxiously waiting to hit the magic 1,000.

The current events at that time were quite jarring. We had the Tet Offensive, and the Vietnam War was at its peak. Martin Luther King was assassinated, followed by Robert Kennedy; there were riots on college campuses; and Richard Nixon was elected president at the end of this era.

The 1970s was the decade of stagflation. The Dow began at 800 and closed at 839, with it reaching an all-time high of 1,051 and boasting a record volume of 44.5 million shares in 1976.

The investment fallacy of the day was to invest in the ‘Nifty 50.’ These were 50 stocks that were considered one-decision stocks. People bought them and then forgot about them. The problem was Polaroid and Kreske went bankrupt and Burroughs and Simplicity effectively wiped out shareholder equity.

On August 19, 1979, Business Week issued its famed “Death of Equities” issue with the Dow Jones  at 875 and about to begin the greatest bull market in history.

One of my steadfast rules is that if you do the opposite of what the media is headlining, most times you will be fine.

1980 to 1989

At the start of the 1980s, interest rates were incredibly high. The prime rate was 15.26 percent and money market funds were paying 12.68 percent. The average mortgage rate was over 17 percent. (I was fortunate, I got my mortgage at 16.7 percent.)

The Dow finally broke out of its era of stagflation and closed at a new high of 2,662.95 in 1987.

October 19, 1987 was Black Monday. It was the largest one-day drop in the history of the stock market. The market was down 22.6 percent in a single day. Due to the lack of technology and the high volume (by 1980s standards), the tape was running anywhere from two to four hours behind. Investors had no idea what the actual price of their stocks were.

By the end of 1989, stocks had recovered to the pre-crash level.

1990 to Present

The Dow hit 3,000 in July 1991, 5,000 in November 1995 and 10,000 in April of 1999.

From 1997 to 2001, there was wild speculation in the markets. Speculators were rushing into stocks that never should have gone public. Day trading became the rage, until day traders lost everything.  I remember a comment in the newspaper that said if you were 25 and a millionaire, now you are just 25. In my 50 years, I have never seen a day trader consistently make money. It is impossible. You have to be right too many times.

From a low of 7,891, the Dow recovered to reach a high of 12,820. The financial crisis hit and the market dropped to 6469.

Many in the industry struggled to recover from the dot-com collapse and survive the financial crisis. We survived and flourished by using a proactive approach to controlling risk, having a sell discipline and proper asset allocation strategy.

By 2014, my practice had grown to servicing over $300 million in brokerage and advisory assets through LPL.  Rather than fearing the downturns as many did, my experience enabled me to take the emotion out of investing and make clear, confident decisions. Overall, I have remained bullish on the markets, knowing from history they would go back up. I was able to weather the storm and appropriately manage my clients’ investments.

I believe the next five years have the potential to be some of the most dynamic years in my career.  I plan to stay actively involved.

“I am dedicated to passing along my knowledge and five decades of experience to the next generation of advisors,” said Hillis. “This means inspiring more Millennials to embark on careers in the industry and empowering them with the knowledge they need to succeed.”

“If new and incoming advisors only take away one lesson from my career, I would advise them to stay bullish on the stock markets and be patient,” continued Hillis. “Despite market volatility, prices have historically gone up over time.”

Hillis currently mentors Dylan Bell, an associate advisor at Hillis Financial Services and a member of LPL’s first class of young advisors in its debut program, the LPL Advisory Institute. Hillis hopes that Dylan will keep Hillis Financial in the forefront of investment advisory for the next 50 years.

After starting his career at a large brokerage, Hillis moved into the independent advisor space where he felt he could better serve his Bay Area clients. He founded Hillis Financial Services in 2001 and has been recognized as part of LPL’s Chairman’s Council from 2002-2018, which is based on an annual production ranking and represents less than 2% of the firm’s advisors nationwide, and as a Top Wealth Manager by the National Association of Board Certified Advisory Practices in 2012 & 2013.

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Investing into a more sustainable future: changing businesses from the inside out

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Investing into a more sustainable future: changing businesses from the inside out 1

By Shawn Welch, Vice President and General Manager of Hi-Cone Worldwide

As industries across the world are facing unprecedented uncertainty and anticipating the economic implications of the current health crisis, business leaders have the unique opportunity to seize the chance to make lasting, positive changes and re-interpret the business challenges in a positive way – without forgetting or minimising the toll the pandemic has taken. When trying to identify a way forward, the future must be sustainable. We must take this opportunity to find a more sustainable way for businesses and manufacturers to survive.

Environmental and economic concern have only increased the gap on what consumers want – more sustainability – and how much progress businesses can make without risking their viability. However, rather than giving up on ambitious goals, maybe we need to reframe the way we look at sustainability. So far, businesses have tended to react to consumer demands, often without looking into the long-term implications and research-based due diligence one would expect. Therefore, now is the right time to be more deliberate: to continue on the path towards a truly sustainable ‘new normal’, businesses need to consider the bottom line impact more than ever before and truly invest in changing their business models to become more sustainable.

Shawn Welch

Shawn Welch

To meet the UN’s ambitious 2030 Sustainable Development Goals, businesses ultimately must thrive – working towards establishing a circular economy remains crucial. Instead of a linear ‘extract, use, dispose’ approach, materials need to be respected and re-used as many times as possible, which is only possible if products are designed for re-use, re-manufacturing, repair or restarting. After all, any and all consumption comes at a price. In manufacturing, processes draw on resources to produce items that, once they have served their purpose, become surplus to requirements. Yet, to ignore this is to take an incomplete view of sustainability: instead, materials are extracted from waste to re-enter production processes. Reuse and recycling initiatives are central to this and great strides have been made in raising awareness of this need. The full environmental cost of production and consumption includes the choice of materials themselves but also the level of carbon emissions generated, and energy consumed.

Once products and processes have redesigned for a circular approach, this initial investment will often easily be recouped, especially if we start with looking at the facts when starting this crucial process. To make the Circular Economy a focus for any business very often means changing the business model. Here, investing in research and development is vital. In the packaging industry, for example, we are seeing that customers and consumers are increasingly more focused on sustainability, and that surprising changes can unlock societal and business value. Through minimising a product’s carbon footprint or making recycling easier for consumers, lifecycle-assessment-based product redesigns or using recycled plastics instead of larger quantities of cardboard, companies are identifying these more creative options and enjoying the long-lasting benefits that come with implementing them. In any case, leadership is key. A research-driven approach gets everyone on-board and seeing management committing to these goals as part of business plans helps cement these. At a recent Reuters Responsible Business Summit virtual panel, I was part of an interesting conversation. Here, Yolanda Malone, Vice President Global R&D Snacks PKG, PepsiCo, discussed how leaders have to drive the behaviours within the organisation and the tone for the culture. She explained that her sustainable plastics vision is a world where plastics never become waste. Only through putting the mantra of “reduce, recycle, rethink and reinvent” can we bring circular products to consumer. She stressed that, if we don’t reinvent, we will fall back into old habits.

Of course, consumer behaviours play a part and the easier the solution, the more likely consumers will get behind it. End consumers are becoming increasingly conscious of packaging. So, to be truly circular, we need to take into account the entire lifecycle. Mindset change needs to continue to happen. Consumers need to be clear about what their choices are. To achieve this, we must change our businesses from the inside out, allowing for close collaboration inside and outside of our organisations. Other organisations – such as governments and recycling organisations – will need to be involved in businesses’ efforts, multiplying the impact our investments will have. We must address all aspects of sustainability and, for example, have better recycling, a focus on infrastructure and emphasis on consumer education. To recover, reuse and recycle, the R&D must be in place and dedicated to sustainability. Partnerships are important as we, as other leading global companies realise, cannot do this alone. Collaboration is key when investing in a more sustainable, more Circular, future.

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Securing Information Throughout the Supply Chain – Preventing Supplier Vulnerabilities 

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Securing Information Throughout the Supply Chain – Preventing Supplier Vulnerabilities  2

By Adam Strange, Data Classification Specialist, HelpSystems 

The financial services sector is experiencing extreme disruption coupled with rapid innovation as established institutions strive to become more agile and meet evolving customer demand. At the same time, new market entrants compete fiercely for customers. Increasing operational flexibility, through the deployment of cloud infrastructure or via digital transformation initiatives, is critical for future competitiveness but it has also driven regulatory and security challenges, particularly around working with suppliers.

That said, the benefits of a diverse, interconnected supply chain are compelling: agility, speed, and cost reduction all weigh on the positive side of the equation, prompting financial institutions to pursue close, collaborative relationships with suppliers, often numbering in the hundreds or thousands.

Weakness in the supply chain

On the negative side is the increased cyber threat when enterprises expose their networks to their supply chain. In our modern interconnected digital ecosystems, most financial organisations have many supply chain dependencies and it only takes one of these to have cybersecurity vulnerabilities to bring a business to its knees.

As a result, breaches originating in third parties are common and costly – a Ponemon Institute/IBM study found that breaches being caused by a third party was the top factor that amplified the cost of a breach, adding an average of $370,000 to the breach cost.

Concern around the supply chain was also evidenced in a recent report we have just issued, whereby we interviewed 250 CISOs and CIOs from financial institutions about the cybersecurity challenges they face and nearly half (46%) said that cybersecurity weaknesses in the supply chain had the biggest potential to cause the most damage in the next 12 months.

But sharing information with suppliers is essential for the supply chain to function. Most financial services organisations go to great lengths to secure intellectual property, personally identifiable information (PII) and other sensitive data internally, yet when this information is shared across the supply chain, does it get the same robust attention?

Further amplified by COVID-19

Financial service organisations have always been a key target for cyber attacks.  Our research showed that since COVID-19 hit, the risk has elevated further, with 45% of the respondents seeing increased cybersecurity attacks during this period. Likewise, hackers are rejecting frontal assaults on well-defended walls in favour of infiltrating networks via vulnerabilities in suppliers.

But financial services organisations must maintain reputations and ensure customer trust. Firms are keen to demonstrate that they are protecting customer assets, providing an ultra-reliable service and working with trustworthy partners. So, what can they do to better protect their supplier ecosystem?

At the very least, they need to ensure basic controls are implemented around their suppliers’ IT infrastructure.  For example, they must ensure suppliers maintain a secure infrastructure with a minimum of Cyber Essentials or the equivalent US CIS certification controls. Cyber Essentials defines a set of controls which, when implemented, provide organisations with basic protection from the most prevalent forms of threats, focusing on threats which require low levels of attacker skill, and which are widely available online.

Likewise, they need to ensure good information management controls are in place and this begins with accurate information/data classification. After all, how can you apply appropriate controls to your information unless you know what it is and where it is?

How ISO27001 helps organisations put in place a data classification process

The international standard on information security, ISO27001, describes the basic ingredients for data classification to ensure the data receives the appropriate level of protection in accordance with its importance to the organisation. It comprises three basic elements:

  • Classification of data – in terms of legal requirements, value, criticality and sensitivity to unauthorised disclosure or modification.
  • Labelling of data – an appropriate set of procedures for information labelling should be developed and implemented in accordance with the organisation’s information classification scheme.
  • Handling of assets – procedures for the handling of assets developed and implemented in accordance with the organisation’s information classification scheme.

Adoption of this methodology will help financial services organisations and their supply chain take a more data-centric information security approach. However, there are essentially four key stages for implementing a data risk assurance supply chain approach and these are:

 1. Approval – in organisations with complex supply chains senior management, vendor management, procurement and information security will all need to support a robust risk-based information management approach. Details of previous incidents and their impact alongside the business benefits will be essential to gain stakeholder buy in.

 2. Preparation – Organisations should start with Tier 1 suppliers and initially identify the contracts with the highest business impact/risk. They should identify and record information repositories and the data that they contain together with the responsible business owners. Define a business taxonomy based on information categories of that data and include supply chain factors such as what information categories are shared.

For example, they need to understand the business impact of compromise against each of the information categories. Have any suppliers suffered security incidents? What assurance mechanisms are in place? Once all this information is collated the organisation can create a data classification policy and define a set of controls for each data category.

 3. Discovery – Select each data category and identify the associated contracts. Then prioritise the data category based on the risk assessment and verify that the data security controls and arrangements for each data category and contract meet the overall requirements. Once complete, hand over the contract for inclusion in the vendor management cycle.

4. Embed process – the overall objective is to embed information risk management into the procurement lifecycle from start to finish. Therefore, whenever a new contract is created there are a number of actions required which embed data risk at each stage of the bid, tender, procurement, evaluation, implementation and termination phases of the contract.

To summarise, organisations should start by researching the information risk and security frameworks such as ISO27001 and others. They should then focus on defining their business taxonomy and data categories together with the business impact of compromise to help develop a data classification scheme. Finally, they should implement the data classification scheme and embed data risk management into the procurement lifecycle processes from start to finish. By effectively embedding data risk management and categorisation into their procurement and vendor management processes, they are preventing their suppliers’ vulnerabilities becoming their own and are more effectively securing data in the supply chain.

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Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19

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Deloitte: Middle East organizations need to rethink their workforce in the wake of COVID-19 3

Organizations in the Middle East have had to take immediate actions in reaction to the COVID-19 pandemic, such as shifting to remote and virtual work, implementing new ways of working and redirecting the workforce on critical activities. According to Deloitte’s 10th annual 2020 Middle East Human Capital Trends report, “The social enterprise at work: Paradox as a path forward,” organizations now need to think about how to sustain these actions by embedding them into their organizational culture.

“COVID-19 has created a clarifying moment for work and the workforce. Organizations that expand their focus on worker well-being, from programs adjacent to work to designing well-being into the work itself, will help their workers not only feel their best but perform at their best. Doing so will strengthen the tie between well-being and organizational outcomes, drive meaningful work, and foster a greater sense of belonging overall,” said Ghassan Turqieh, Consulting Partner, Human Capital, Deloitte Middle East.

According to the Deloitte report, many organizations in the Middle East made quick arrangements to engage with employees in the wake of the pandemic through frequent communications, multiple webinars where senior leaders addressed employee concerns, virtual employee events, manager check-ins, periodic calls and other targeted interactions with the workforce.

The report also discussed how UAE and KSA governments have reexamined work policies and practices, amended regulations and introduced COVID-19 initiatives to support companies and the workforce in the public and private sectors. Flexible and remote working, team-building and engagement activities, well-ness programs, recognition awards and modern workspaces are among the many things that are now adding to the employee experience.

Key findings from the Deloitte global report include:

  • Only 17% of respondents are making significant investments in reskilling to support their AI strategy with only 12% using AI primarily to replace workers;
  • 27% of respondents have clear policies and practices to manage the ethical challenges resulting from the future of work despite 85% of respondents saying the future of work raises ethical challenges;
  • Three-quarters of leaders are expecting to source new skills and capabilities through reskilling, but only 45% are rewarding workers for the development of new skills; and
  • Only 45% of respondents are prepared or very prepared to take advantage of the alternative workforce to access key capabilities despite gig workers being likely to comprise 43% of the U.S. workforce this year according to the Bureau of Labor Statistics.

“Worker well-being is a top priority today, and similarly to the rest of the world, companies in the Middle East are focusing their efforts to redesign work around well-being by understanding workforce well-being needs,” said Rania Abu Shukur, Director, Human Capital, Consulting, Deloitte Middle East.

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