John Dowd, CEO of Fiduciary Trust International, is a member of the board of directors and chairs the management and operating committees. He has 30 years of experience in wealth management.
Russ Prince: How is Fiduciary Trust International addressing the investment and wealth needs of HNW individuals and families?
John Dowd: We were founded in 1931 as a specialized trust company and that fiduciary approach permeates everything we do. This is shown in the ways we avoid many conflicts that can arise in our industry—display fees, avoid placing sales goals on specialists and providing multiple options in client solutions. Another aspect of our unique business model is the dedicated, locally based team of specialists that work as a family office. Charging a single asset-based fee for the investment, planning, tax and fiduciary services support allows us to expand solutions to our clients without getting paid more.
Working with Fiduciary is a unique experience. We built our own client portal, mobile app and entire digital experience because there are no “off-the-shelf” tools that can replicate how it feels to be a client here. We built and maintained the tech, constantly improving and evolving based on demand. This past year, we’ve had 75 enhancements to our digital offering, many of those suggestions coming from clients and advisors.
While we keep our clients confidential, many of them enjoy interacting with the community of likeminded people through our highly personal, custom events featuring well-known entrepreneurs, leaders in fin-tech, philanthropy and the sustainable space.
We have a sophisticated investment offering—fully customizable and very different from the firms that simply rely upon centralized models. Our portfolio managers build portfolios from the position level up, and in our family office and endowment side, we have dedicated research in manager selection across all asset classes. Being that many of our clients are taxable, we pay close attention to after-tax performance. We have an in-house tax department, which is exceedingly rare. On the trust and planning side, we have trust counsel positions throughout our locations. At least half of the assets we manage are in trust, and we act as a trustee and investment manager for clients around the globe. We also produce over 100 thought leadership pieces a year and, in 2021 alone, hosted more than 30 webinars on topics such as tax law changes, ESG/sustainability, potential Fed policy changes and other topical issues that impact client’s portfolios and plans.
Prince: What do you believe has impacted the wealth space the most this past year, and what is on the horizon?
Dowd: The inception of Covid-19 brought about a lot of changes. Forced to work remotely “pulled forward” how our clients and advisors interact with technology. Several interesting tools were built, but adoption rate pre-Covid was low. We began using these tools, like online financial plans, as we couldn’t do things face to face. Letting clients experiment with “what ifs” scenarios really took off and makes for a highly engaged client. Covid-19 has also made us think differently about how we want to spend our time and what’s important. Our clients have accelerated their retirement planning and rethought their legacy, philanthropy and social concerns, which are reflected in their portfolios.
Wealth management will expand well beyond a financial service that helps clients tackle critical logjam decisions in their lives. Using data analytics will also help with next best-action ideas.
Prince: How will Fiduciary Trust International evolve to meet any changing demand in the wealth space?
Dowd: We continue to evolve with our client’s needs, though the pace of change today is faster than ever. Some ways we stay on top of what clients and prospects want from us comes from the disciplined work we put around client surveys. We have been receiving rich feedback from clients as to what they want. We also actively watch our competitors and are keenly aware of new services that they offer. Finally, we remain and invest in start-ups—particularly fintech’s—and see how they are innovating and solving problems.
Innovation is prized in the company, and I also stay up at night thinking about new trends and new client demand. A good example is the work we are doing at Fiduciary with digital assets. With blockchain technology, forward thinking asset managers like Franklin are alrady looking for illiquid assets they can tokenize, and trade globally 24/7. HNW clients in turn will be investing in these assets becasue of their higher return profile. Its why we at Fiduciary are becoming the digital custodian and its behind our investment in North Capital. I also stay abreat of the changes happening in the industry by staying close to the disrupters.
Prince: What is your advice for individuals entering the wealth space?
Dowd: The wealth industry is prime for technology disruption. We are all technology companies—you just need to decide what type of tech company you are and experience how tech is working in wealth. Get on one of the robo’s freemium services, buy crypto currency—see what works and what doesn’t work. Our team is always opening small accounts in innovative places to understand the challenges and benefits.
When I first came into wealth management, I was overwhelmed by the data and opinions I needed to know about the markets, so I stepped back and created a framework, which I still update any time key data is released. The goal for me is to understand where GDP—the key economic scorecard—is going directionally. The inputs I track are the dollar, interest rates, inflation, earnings and jobs. This framework works for me, although I have seen simpler ones.
I’m also a big believer of Thomas Jefferson’s 10 rules. Rule #1: “Never put off until tomorrow what you can do today!”
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