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Personal Wealth Management at Fiduciary Trust


In their hot pursuit of the high-net-worth and separately managed account markets, investment managers have lowered investment minimums to less than $100,000 and created model investment platforms.

Such a mass-market approach would practically be treason at Fiduciary Trust, a 73-year-old international private banking and wealth management firm. While Fiduciary is willing to offer standard SMAs to millionaire offspring with less than $2 million to invest, most of its accounts are $10 million, truly individualized and separately run, says James C. Goodfellow, Fiduciary's vice chairman.

And not only does Fiduciary compete with other SMA managers by offering personal money management and access to its portfolio managers, but it also extends trust and estate planning and income tax preparation to its investors, Goodfellow says.

Not all wealth managers are created the same, Goodfellow recently told Money Management Executive Editor Lee Barney. Read on to hear one private banker's opinions on the many differences.

MME: While you serve the ultra-high-net-worth market, with many accounts averaging $20 million, what sets your firm apart from other SMA managers?

Goodfellow: First, we've been in this business for a long time, starting in 1931 managing money for individuals and families. That broadened into foundations and endowments, and eventually institutional management. Second, we manage separate account portfolios that are custom-tailored for clients, so, in effect, we are more in the market of providing investment solutions for clients than in designing and distributing products. Third, we've been managing money internationally for more than 30 years.

Last, but not least, the portfolio manager is the client's relationship manager at Fiduciary Trust. People primarily come to us to have their money managed, so we put the portfolio manager forth as the relationship manager. And that makes us unique.

I should also add that we are now part of the Franklin Templeton family, so we think of Fiduciary Trust as a relatively small, focused, personal investment management firm with trust powers, backed up by the breadth and capabilities of a very large investment management parent.

MME: That's a tall order, for a portfolio manager to also work as the lead relationship manager. Do they have any help?

Goodfellow: Depending on the client and the circumstances, the team would include a backup portfolio manager, analysts on the risk management team, an expert on trust and estate law and a tax professional. But the key here is that the portfolio manager is the captain of that team, rather than a banker or trust officer or relationship manager, or whatever firms want to call it.

We believe the critical capability that we have, the critical reason clients come to us, is to have their money managed. Our philosophy is that if the portfolio manager is not in the thick of the investment management process, then client expectations can diverge from portfolio managers' expectations. We want to stay in complete sync with our clients.

MME: What are the biggest issues on your clients' minds today?

Goodfellow: Investment management services, wealth transmission and education. Those three things, all interrelated, are what our clients are looking for.

MME: We all know that wealthy people are well educated and driven. How can you educate them further?

Goodfellow: Our clients are interested in learning more about the wealth management business, how to develop portfolios, how to manage money responsibly and ways to convey this responsibility to their children wisely. The vast majority of our clients want to leave the most that they can to the next generation. They want to maximize the transfer of wealth, and in order to do that, you have to put very sophisticated planning strategies and structures in place to accomplish that goal.

MME: Do those parents who don't leave money to their children ever leave some sort of guidance instead?

Goodfellow: They do, and in fact, many families establish foundations for that purpose. It's a great vehicle to instill the family's culture in the next generation.

MME: You have augmented some areas of your investment discipline, equity and fixed income among them. What are your new offerings?

Goodfellow: Separately managed portfolios here are typically balanced ones, including an array of equities and fixed income. By virtue of our relationship with Franklin Templeton, we now have a whole array of new products and services to complement our historically growth-at-reasonable price (GARP)-oriented style.

Franklin is more value-oriented and has a huge fixed-income capability with multi-state tax-exempt funds, as well as alternative investments, so these capabilities have all added to what we're able to offer to our individual clients.

We further augment these investment management vehicles with the kinds of services that a high-net-worth client needs: estate administration, trust administration, income tax planning and preparation and master custody.