Gene Todd, president and head of regional markets for Fiduciary Trust International, leads the teams across the firm's global footprint that provide wealth management advice, solutions and services to individuals, family offices, foundations and endowments. He is a member of Fiduciary Trust's executive, management and operating committees. He is also a member of the Franklin Templeton management committee. Todd has more than 25 years of experience in the financial services industry, including wealth management, private equity, venture capital, M&A and leveraged buyouts.
Russ Alan Prince: As newly appointed president of Fiduciary Trust International, where do you see the most opportunities to grow the business?
Gene Todd: At Fiduciary Trust International, we are focused on evolving with our clients and helping them achieve their financial goals. We are equally committed to helping them create an impactful, long-lasting legacy and safeguarding their wealth for their families and future generations to come.
At the same time, the wealth management sector is undergoing meaningful disruption as clients increasingly demand expanded services within the same fee structure. The prevailing trend of seeking "more services for the same fee" is anticipated to persist and stands to exert a substantial influence on the industry in the years and decades ahead.
For example, clients today are looking for expertise and insights around the growing trend of alternative investments, alts, as part of a portfolio offering, in addition to receiving a full range of financial planning, trust and estate planning services. Now that the Rubicon has been crossed and bitcoin ETFs are available, clients expect advice on the role of these investments in portfolios. They also want access to credit, help managing their balance sheet, and tax planning advice. Insurance advice and/or solutions from their financial advisor have also become an expectation.
Being a larger and well-established wealth management firm, and part of the Franklin Templeton family, a key advantage we have is our access to abundant resources and capital. We are already proudly delivering many of the wide-ranging services that wealth management clients today are looking for, and we are well positioned to develop or acquire what they will be looking for tomorrow.
Prince: What do you see as one of the biggest challenges facing the industry today, and how is Fiduciary Trust International working to solve this problem?
Todd: It is no secret that there's a significant shortage of talent in the wealth space. In recent years, we have seen a trend of fewer young people coming into the business as compared to those retiring.
The stats paint an ominous picture. Nearly half of certified financial planners today are over the age of 50, according to the CFP Board. Meanwhile, more than one-third (37%) of financial advisors are expected to retire over the next 10 years, according to a report by Cerulli Associates. This shortage of talent stands to put considerable strain on our entire industry.
We are constantly innovating to meet this challenge head-on and not only survive it but also thrive in its midst. As president, ensuring that we continue to build and develop a firm and culture that is attractive to the wealth managers of tomorrow is a top priority. Annually, we recruit more than a dozen interns from colleges and universities nationwide, providing them with a summer to immerse themselves in learning about our business and industry. Many former interns have come on board as employees after graduation.
Another major problem facing our industry today always brings to mind the notorious bank robber Willie Sutton. When asked why he robbed banks, Sutton simply replied, “Because that's where the money is.” And why would bad actors attempt to attack wealth management firms? Because that's where the money is.
Cybersecurity threats to wealth management platforms will only continue to expand in the digital age as bad actors are becoming increasingly sophisticated. Clients want to know their wealth managers have made the proper investments to mitigate these types of risks. This is something that Fiduciary Trust has been focused on since day one, and we lead the industry in our measures to protect client assets.
Prince: What do you believe are the key offerings and services that wealthy clients will want from their wealth management firm going forward? And how is your firm positioned to meet these demands?
Todd: We pride ourselves on being “the investor’s investor” and have been since the firm was founded in 1931 with a focus on growing and protecting wealth through generations. We established the first in-house research department of any trust company, and we were an early adopter of international investing.
As I think about what makes us the investor’s investor in 2024, a lot of it revolves around our industry-leading research and portfolio management team that serves as the investment manager for many professional investors, including those specializing in private equity, venture capital, hedge funds and real estate. We have a long history of working with these clients to build strong risk-adjusted portfolios.
As a trend, wealth management clients are becoming more and more interested in and focused on alts and digital assets, and the growing demand for access is only expected to continue. At the same time, alternatives are evolving to become more accessible to a broader group of investors with lower minimums, greater liquidity and easier tax reporting.
The outcome for an investor in private alternatives strategies could vary greatly depending on manager selection; therefore, we believe it's crucial to work with an experienced advisor when implementing an alternative investment program. At Fiduciary Trust, our alternatives platform extends beyond traditional investments and offers an expansive footprint and specialized capabilities across a range of asset classes, structures and investment outcomes.
Russ Alan Prince is a strategist for family offices and the ultra-wealthy. He has co-authored 70 books in the field, including Making Smart Decisions: How Ultra-Wealthy Families Get Superior Wealth Planning Results.