John dowd, CEO of Fiduciary Trust International, is a member of the board of directors and chairs the management and operations committees. He has 30 years of experience in wealth management. LinkedIn page: https://www.linkedin.com/company/fiduciary-trust-international/
Prince: How does Fiduciary Trust International meet the investment and wealth needs of individuals and HNW families?
Dowd: We were founded in 1931 as a specialist trust company and this fiduciary approach permeates everything we do. It shows in the ways we avoid the many conflicts that can arise in our industry: displaying fees, avoiding placing sales targets on specialists, and offering multiple options in customer solutions. Another aspect of our unique business model is the dedicated and locally based team of specialists who work as a family office. Charging a one-time asset-based fee for investment, planning, tax and trust services allows us to extend solutions to our clients without getting paid more.
Working with Fiduciaire is a unique experience. We have built our own customer portal, mobile app and full digital experience, as there are no âout of the boxâ tools that can replicate what it feels like to be a customer here. We have built and maintained the technology, improving it and constantly evolving according to demand. Last year, we made 75 enhancements to our digital offering, many of these suggestions coming from clients and advisors.
While we keep our clients private, many of them enjoy interacting with the community of like-minded people through our highly personal personalized events featuring well-known entrepreneurs, leaders in financial technology, philanthropy and sustainable space.
We have a sophisticated, fully customizable investment offering that is very different from businesses that simply rely on centralized models. Our portfolio managers build portfolios from position level, and in our family office and endowment side, we have researched the selection of managers across all asset classes. Since many of our clients are taxable, we pay particular attention to the after-tax return. We have an internal tax department, which is extremely rare. On the trust and planning side, we have Trust Advisor positions at all of our sites. At least half of the assets we manage are in trust and we act as a trustee and investment manager for clients around the world. We also produce over 100 thought leadership articles per year, and in 2021 alone we hosted over 30 webinars on topics such as tax law changes, ESG / sustainability, potential changes Fed policy and other topical issues that impact clients’ portfolios and plans.
Prince: In your opinion, what has impacted the wealth space the most over the past year and what is on the horizon?
Dowd: The creation of COVID-19 has brought about many changes. Forced to work remotely, they have âpulled forwardâ the way our clients and advisors interact with technology. Several interesting tools have been built, but the pre-COVID adoption rate was low. We started using these tools like online financial plans because we couldn’t do things face to face. Letting customers experience “what if” scenarios really took off and made a very engaged customer. COVID-19 has also made us think differently about how we want to spend our time and what is important. Our clients have accelerated their retirement planning and rethought their heritage, philanthropy and social concerns, which are reflected in their portfolios.
Wealth management will extend far beyond a financial service that helps clients deal with critical deadlock decisions in their lives. Using data analytics will also help with the next best action ideas.
Prince: How will Fiduciary Trust International evolve to meet any changing demands in the area of ââwealth?
Dowd: We continue to evolve with the needs of our customers, even though the pace of change is now faster than ever. Some of the ways we stay on top of what customers and prospects expect of us come from the disciplined work we do around customer surveys. We have received rich feedback from clients as to what they want. We also actively monitor our competitors and pay close attention to new services they offer. Finally, we stay and invest in start-ups, especially fintechs, and see how they innovate and solve problems.
We see the need to adopt within Fiduciary the way we use our M&A strategy to fill gaps in our offering. With ESG, clients, especially international ones, want to see more sustainable investment opportunities. While Fiduciary had a quality bias in building our portfolio, we lacked the depth when it comes to ESG investing and impact. Our acquisition of Athena Capital in 2020 filled this gap. We believe that increased allocation to early stage venture capital opportunities will be essential for wealth creation, which has led to our recent investment in North Capital. The Trustee also sees opportunities for our clients in digital assets, particularly tokenized securities, which is why we strive to offer digital custody services.
Prince: What is your advice for individuals entering the wealth business?
Dowd: The wealth sector is the first to experience technological disruption. We are all tech companies – you just have to decide what kind of tech company you are and find out how technology works in wealth. Go to any of the robot’s freemium services, buy cryptocurrency, see what works and what doesn’t. Our team is always opening small accounts in innovative places to understand the challenges and benefits.
When I first got into wealth management, I was overwhelmed with the data and opinions I needed to know about the markets. So I took a step back and created a framework that I keep updating whenever key data is released. The goal for me is to understand where the GDP is heading, the main economic dashboard. The inputs I watch are the dollar, interest rates, inflation, income, and jobs. This framework works for me, although I’ve seen some simpler ones.
I am also a big supporter of Thomas Jefferson’s Ten Rules. Rule # 1 “Never put off until tomorrow what you can do today!”
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