YouSaid · the spoken record

Catherine Keating

lines on the record: 52
first: 2020-12-03
most recent: 2020-12-03
sittings or episodes: 1
sources: podcast

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“What I know about the world of investment management today that I wish I knew back in the 1990s is that success is about a lot more than beating the market. Beating the market is one of those disciplines and absolutely you want to beat the market or at least meet the market over time. But real success comes from knowing what your goal is, charting a course to get there, staying with it. And it's a lot more than the market, as we talked about. Yes, investing is part of long-term success, but so is managing your balance sheet and deciding how much and whether to borrow. So in spending and deciding what's the appropriate send rate to help you achieve your goals. So is managing taxes and managing care tax returns? And so is protecting what you have. So, you know, those five disciplines, invest, borrow, spend, manage, protect. When I started my career, I was laser focused on investing and I would tell everybody to broaden.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“With people. And we have to, the first thing you have to do if you want to be empathetic is that you have to listen. And sometimes in our industry, the tendency is to tell people everything we know. In fact, what we ought to do first and foremost is be really good listeners because then we're going to learn about what's important to our clients. And I've just learned over time that you get great success when you combine what you know with what people care about and what you care about. People don't really care about what you know until they know that you care. And so that combination of learning, learning, learning early in your career, but also building empathy and listening skills, that's the perfect combination in this industry. And that's what I would encourage them to focus on.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“First thing I would do is I would congratulate them for picking a good industry and a good segment of wealth and investment management industries are dynamic and growing and they will be a good career for the rest of your career. So congratulations you've picked a great area. And then I would tell them two things. The first one is that we're a knowledge industry. And so whether you realize or not, those early years in your career, you have the luxury of being very self-risk, focusing on yourself and trying to learn as much as you can and get as much knowledge as you can. Because as your career progresses, you tend to have more responsibilities, responsibilities for more projects at work, more people at work, maybe people at home. So these early years, whether you know it or not, are years that you can be really selfish and focused on yourself and try to learn as much as you can. And then the second thing that I would tell them is we're a knowledge industry, but knowledge isn't enough. We're also an empathy industry because we really were”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I love to read. I love to read. I actually majored in English in college, and this year I've read recently Eric Larson, the Blender in the Vial, which again, a great story of Churchill and World War II and the Battle of Britain. Really, really good. And not a story, by the way, nonfiction. I enjoyed Michelle Obama's becoming. I haven't read Barack's book yet, but I will get to that too. And I enjoyed a fiction book that's called The Vanishing Half, which is about two sisters that ended up living very different lives and very twin sisters, very different lives in very different communities, one in a white community, one in a black community. Enjoyed it very much.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Really build a company that changed the industry. And it has always stayed with me. I was fortunate to stay in touch with him for his whole life. So Jack Bogle, unexpectedly, a big mentor of mine, even though I never worked for him, I just had the great good fortune of working with him. And another one I mentioned earlier, my mom, my mom, who became unexpectedly a widow at 32 years old with three little kids who went back to work and back to school and back to work and learned how to manage her own little pot of life insurance proceeds, stayed with her career until she was 79 years old because she loved books and she loved the library. She was a librarian. She's been an incredible, incredible mentor for me. So Jack Bogle and my mom, two of my mentors.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of my early mentors in my career, and it's just an example of the serendipity in this industry, was actually Jack Bogle, who was the founder of the Vanguard Group, and I've never worked at the Vanguard group, and yet in this industry I had the chance to meet Jack and work with him and cover him as an industry group industry peer. And, you know, I watched him really change the investment industry. I watched, you know, he had lost his dad at a young age and he was very, very committed to the success of individual investors. And I remember Vanguard when it was still a small company and celebrating billions versus trillions. And I watched his passion and his conviction.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I'm streaming a couple of things. One is the crown. I think it's hard to be an American and not have an affinity for the special relationship we've always had with the UK. I actually even tuned in in the spring when Queen Elizabeth addressed the United Kingdom for only the fifth or sixth time in her whole life about the pandemic. And I found it very inspirational and moving. The other thing that I'm streaming right now, you know, it remains very hard for independent films to get funded in Hollywood, and that can be particularly the case when they are films about women written by women, stories about women. And so a couple of years ago, I actually invested in a wonderful film that's called A Time to Spy, and it is a true story. It is out on Hulu and Amazon right now. It is about three women spies in World War II, true story, who trained as spies under the Churchill Foreign Office and went into”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Investment portfolios and decisions and things like that with clients. And I think increasingly it's something that we're all looking to our government to do in Washington. So we love the show. We love the history. It uplifts us all the time. And thank you for asking.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So obviously, we're very proud of our history of Alexander Hamilton and Eliza, as I said, and Eliza, his widow, who was actually our first client in wealth management, we loved the musicals. We love the musical. We love the way it makes our history come to life. We actually enjoyed watching the streaming version over the summer. One of the fun things that we did as a group in wealth management. But, you know, when I think about the musical, one of the things that is always top of mind happens to be my favorite song in the musical is the rumor it happens. And that's the one about the compromise between the northern states and the southern states to move the capital from New York City to Washington, D.C. I obviously live in New York right now. I'm from Washington, D.C. But I think that that whole process of compromise and give and take, it's something that we do every single day as we debate, you know,”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think when it comes to wealth management, there's a role to play for broad market indexes, but there's also a role to play for customizing those indexes, right? So you might be customizing them for particular tax outcomes, right? You can tax harvest losses and customize for the kind of tax outcome you want. You might be customizing them for other reasons, right, to form an index that is a little bit different than the market, but helps to accomplish a particular passion or goal of your client. So I think there are roles for broad market indexes, but increasingly I think there are roles for customizing those indexes to after-tax returns or other goals that a client has. And we really see that as the future and a way that we spend a lot of our time.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Tends to have to absorb information and move very quickly. And sometimes when it comes to diversity, moving too quickly is not the best thing to do. Sometimes you need to slow down, you need to have a good process, and you need to cast your net widely when you're thinking about recruiting and promoting. And that does take a little longer. But the result tend to be much better if you can just slow down a little and have a great process that's very inclusive.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I saw lots of great careers public service and medicine and law. My dad was a lawyer, real estate, all sorts of things, media. But I didn't necessarily see financial services. It wasn't until I was a professional that I realized that that was a career that I could pursue. And so one thing that's happened since then is that markets have democratized, right? This shift from pension plans to 401ks and personal savings. Markets had democratized. And so I think the industry is much more visible. And I try to do things to make it as visible as I can for women, part of what we're doing today because I just think it's really important. It's a wonderful industry and a wonderful career. So visibility is the first. But then the second thing is process. We are an industry that is challenged by markets that change all day, every day, right? We are an industry that”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Look in the wealth management industry, we understand how important diversity is our clients are diverse. We represent families, so we know how important it is to our business. But apart from that, you know, the data is really clear. Diverse leadership teams have lower cost of capital, diverse investment teams have better investment returns, diverse sales teams have better sales performance. The data is really clear that diversity is good for business and it's good for investment businesses. So there's simply no question about that. You asked about why is it that the industry maybe hasn't been as diverse as we are and that we want it to be? And I think there are really two reasons, Barry. The first one is visibility. You know, when I was growing up, I'm from Washington, D.C. And when I was growing up, I didn't really see finance or investing or financial services or a career back then. This was, you know, the 1970s, 1980s in Washington.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“In our view, the whole rubric of ESG has now become just a fundamental part of investing. Now, when it comes to any particular family, they might have particular passions or concerns related to E or S or G, and we can take those into account and tailor. But in general, as investors, we just look at those factors as things that any”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, when it comes to environmental, social, and governance matters, leave you those considerations as just basic considerations that you should employ as an investor and as an active manager. So we look at those considerations when we make decisions as investors. I think that in the big scheme of things, ESG environmental social governance considerations, interestingly enough, there was a time when people were concerned that if you took those into account, you might be limiting your investment universe and therefore you might potentially limit your return because you're investing in a smaller universe of companies. In fact, what we've seen happen over the last 10 years or so is investors have come to realize”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“At the end to the beneficiary, whether that's a charity or a family member. So it's a pretty technical estate planning environment, but lots of opportunities for clients.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it really depends very on the type of a gift. If you make an outright gift, you value it on the day of the gift, you know what that is, and you've made an absolute transfer of it. But sometimes gifts are split interest gifts. You might keep an interest and give away the remainder. You do that with a charitable lead trust or a charitable remainder trust. You do that with a grantor retained annuity trust. And the interesting thing about split interest gifts is that you have to value what you're keeping because that's not a gift. You don't make a gift to yourself. And the gift really is the remainder, what you're not, what you haven't kept. And the reason that there's such a compelling opportunity right now is that the value of what you kept is discounted at very, very, very low interest rates. And so that means that potentially there could be a large gift if markets exceed low interest rates. There could be a large gift.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Been to the needs that we've seen here in the city. We provided iPads to a hospital system for patients to be able to communicate with family members when they couldn't visit. We've helped homeless shelters get Wi-Fi for students that might be living in shelters that need to do remote learning. So I think one of the things about this year has just been seeing philanthropists dive in to meet the needs that were created so unexpectedly.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would make two points about philanthropy. One is that we are a very, very generous country and culture. And we've seen that this year. We've seen that across our client base. We've seen charitable giving going up in donor advised funds and outright gifts and trust gifts and planned giving. So we are a very, very generous country and culture, and that's very inspiring. The other thing that I think has been just amazing to watch and to a certain extent to be part of this year is to watch how philanthropic resources have gotten together and just attacked where the needs are, right? So you mentioned Power Hughes. You mentioned Helmsley. They both focus on healthcare and they have dived in to opportunities and challenges created in healthcare related to the virus. You know, I think about our company. We have been, you know, we're headquartered here in New York City and we've sort of died.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“For us, the fixed income portfolio is the balance, right, to the risk that you take in the rest of your portfolio. So we do tend to focus a lot on quality, right? Higher quality. We actually focus very much right now on duration because duration has actually extended, meaning that there's more duration risk in portfolios. So those are the two things that we're most focused on in fixed income right now.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the 60-40 portfolio for many, many decades gave clients a combination of good return in equity markets, you know, call it high single-digit returns and equity markets, and good returns in fixed income markets call it mid-single-digit returns in the fixed income markets. You know, as we look ahead, It's a tweak, and it's being tweaked every day, slightly differently for every client.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“By private equity funds and venture capital funds, then you have public companies. So you have a much bigger investment universe in the private equity space. And we also see that companies tend to be staying public longer, particularly the venture-backed companies. And so there's a very large alternative universe out there where a lot of value is being created. And we think it's very important for our clients to have exposure to that for the long term. And so if I go back to kind of our outlook for markets for the next decade and the fact that we think public market returns are probably going to be incrementally lower, Excess returns that you can get in private markets are going to be even more important for wealthy clients.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Question. You know, our clients are business people. And so as a baseline, they're very comfortable with private businesses and private markets because that tends to be how many of them have become successful. So they understand that as business people. You know, when we think about portfolios, and again, trying to have individual investors achieve the kinds of long-term returns that institutions have, alternatives is very much a part of that. And capital market structure has changed a lot over the last 20 years. If we think about capital markets and what's happened, you've seen a steady decline in the number of public companies in this country. We now have fewer than 5,000 public companies. At one time, that was as many as 8,000. And at the same time, you've seen a very large increase in the number of private companies that are backed by private equity and venture capital funds to the point where you now have more of those private companies that are back.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Market is tending to expect right now is divided government. You have lower, you will have lower democratic majorities in the House. The Senate will be very close. So the market is expecting a relatively balanced outcome. And what we say to our clients is, you know, stick with that long-term plan. And if there are decisions that you make that you would make for the long term, you should make them. There are things that are highly tactical right now, right? Interest rates are the lowest that we've seen in our lifetimes, and that includes for estate planning, right? Intra-family gifts, lit interest trusts, intra-family loans, lowest interest rates ever. So there's a very tactical aspect of that. And the other thing that's tactical is that the estate tax exemption is scheduled, which is currently roughly $23 million approximately across a husband and a wife, that is tended to reduce.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“What we would tell our clients is to take the step that makes sense for your long-term plan. If it makes sense to diversify many of our clients, their wealth is created in concentration, right? They found a company, they have a concentration in a single stock. That's how wealth is created in this country. We can think of the wealthiest people in the country, and we know how Jeff Bezos and everybody else created their wealth. So we tell them if it makes sense for your long-term plan to be making some changes to your investment portfolio, perhaps to diversify, perhaps to taking some capital gains, you should do that. If it makes sense for the long term, you should stick with that long-term plan. In the meantime, markets tend to like divided government. Markets have done very well with divided government, and we've had divided government, actually, for much of the last 20 years. And that's what...”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I would say that 2020 is certainly an election year. I would say it's even bigger than that. 2020 is a year for the history.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Politic Museum of Art that people from all over the country are taking part in even without traveling to New York. Same thing for the moment as our museums here in the city of Rios. So I think we have added virtual as the third leg of the business model permanently. And I think that's a really good thing.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question, Barry. And I think the answer is that this has fundamentally changed our working model for the future. And so let me talk about the business model, first of all, how we work with clients. I would have said that for many, many years, we had a two legged business model. Part of it was physical, meaning with a client in person, and part of it was digital, the client interacting with us digitally using our tools. I would say that this year we have permanently added a third leg to that business model, which is virtual. So they'll be physical, they'll be digital, but they'll also be virtual because what we found is it's a very efficient way to meet with people. It's an efficient way to get a family together that may not be living together. They might be living in different states. It's very, very efficient way to get large groups of people together, right? Just for an hour, no commuting time. We've actually done some virtual events for our clients, you know, virtual tours of the metric.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And on Fridays for much of this year, we've actually closed our days together. And while management at four o'clock with a very short call, fifteen minutes, just reflecting on what the week has meant to all of us personally and professionally. So we've really changed the way we spend our time because we're going through this crisis in such a different way than any other crisis in our history, which is we're going through it together, but we're sitting separately. And so we're really trying to recreate occasions to come together.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Executive committee, the senior leadership group of the company met early every single morning. And in fact, some days we met more than once to kind of take a look across the markets, the landscape, what did we see was happening then in wealth management. We start our mornings now every single morning together on a markets call, kind of guiding our people to what we're seeing in the markets, what changes are we making in portfolios, what advice are we sharing with clients. During the spring, when markets were changing so rapidly, every single Monday at 4 o'clock after the markets closed, we held a call for all of our clients, sharing with them what we were observing and what we were doing to help them. On Tuesdays at 4 o'clock, we closed our days together with another meeting internally just gathering people together and talking about some of the new things that we have to learn and absorb this year, whether it's around low interest rates that we have, whether it's around new planning techniques under the CARES Act or other things.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Great question, Barry. I mean, how has this pandemic not impacted our business this year in a way I think is a question because if you go back to the beginning of March, 98% of the people in my division worked in our offices and we had to transition over a three-week period to 90% of them working at home. So first and foremost kudos to the company for all of the work that it has done over the years in resiliency and in technology because it actually enabled us, we didn't expect this to happen, but it actually enabled us to very, very rapidly shift 90% of our employees in wealth management from working full-time in the offices to working at home. So fortunately, it turns out in hindsight we were more prepared than we thought. But apart from that, it meant we had to change our days. And so at BMY Mellon, what that meant in March and April and May when we were really in the thick of this, the”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“You've got to eke out excess returns wherever you can. There are certain asset classes where that may be less likely. You know, the U.S. large cap market is very, very efficient. We would say you can actually add tax alpha in the U.S. large cap market, perhaps more effectively and consistently than you can add investment alpha. But then there are other asset classes where markets are much less efficient, and we do encourage them to go for excess returns. And that's everything from good cyber practices to estate planning and trust and things that protect assets to protecting the non-financial assets. What are the qualities and disciplines of your family that you want to see survive to the next generation? So it's invest, spend, borrow, manage, protect, as you said.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“If it was in the double digits, chances are it was in the late 80s, early 90s. If it was in the mid single digits, it was in the 90s, if it drops even lower, it was sometime in this new century we're in. And if it's below 3%, you took it out this year. So, you know, our clients don't have to borrow, but they make capital allocation decisions just like any major company does. And so thinking about their balance sheets and thinking about when it might make sense to borrow, particularly when rates are low for estate planning purposes, for liquidity purposes, for purchases, that's become a more important discipline. And that's the third one. So investing, spending, borrowing, managing for after-tax returns, because our clients do pay taxes. And part of that is related to your question about active and passive, right? Passive vehicles, lower cost, but also very tax efficient. And what we say to our clients is, again, with our investment outlook,”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Thanks for asking Barry. Yeah, we have a lot of passion around this because, again, as I said, we believe that part of our job being one of the largest institutional firms out there is to help our clients benefit from the best institutional practices around those five things. We have the great fortune of having a lot of experience working with wealthy families at this firm all the way back to the Hamilton family, as I said. And we didn't know if it was going to be five, it could have been three, it could have been four. It turns out it's five, that we see allow families to sustain their success over time. Your financial assets, your portfolio, having the right asset allocation,”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“About it, right? Inflation has been coming down, interest rates have been coming down, GDP growth has been coming down, and market returns have come down incrementally. So what we said to our clients is that's the ecosystem that we think we're going to be in over this next decade. We still do. We've had some really unexpected and very important events this year, obviously, with the global pandemic and the influence of Congress, the fiscal stimulus, and the Federal Reserve with monetary stimulus. And we actually think that that monetary stimulus and the low interest rates for longer are very, very important to the outlook going forward.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lower going forward. And there was one major reason for that, and that is that all of the largest economies in the world are aging at the same time. China, Europe, Japan, the United States. And we know what happens when economies age. Inflation tends to go down. Interest rates tend to go down. Yield curves tend to flatten. GDP growth tends to go down. And eventually market returns tend to go down.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Before we look at active or passive, we look at the ecosystem that we're investing in, right? What's going on in the global economy? Because that's really the ecosystem that we invest in. And in fact, at the beginning of this year, I sent a letter to all of our clients not knowing, of course, in the beginning of January what 2020 was going to hold for us, but recognizing that we were starting a new decade. And as we started this new decade, we looked at global economy. We looked at capital markets. for our clients, what do we think market returns are going to be in the next decade? And I actually quoted Bill Gates in that letter. He says, we always overestimate what's going to happen in the next two years and underestimate what's going to happen in the next 10. And one of the things that we said to our clients about the next 10 years is that we thought that market returns were going to be lower, incrementally lower, not significantly lower, but incrementally.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“From company provide attention plans to employee funded savings plans. So today, everybody is responsible for their own financial futures. And that's a fundamental shift. And that's another reason barrier that we try to port over into wealth management all of the institutional asset management disciplines that you would have seen a chief financial officer or a chief investment officer use when they were actually providing for people's long-term retirement. That's much less common today. And so our mantra for clients is you have to be your own CFO. You have to be your own CIO and we're here to help.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's, yes, the answer to that, Barry is yes. You know, when I think about when I started my career in this industry back in the 1990s, you know, the typical client might have been a CEO, a CFO, a senior corporate executive. And when that client retired, chances are he or she, and very often it was a he retired with a corporate pension plan, right, an annuity for the rest of his life and his spouse's life. And also, anything else that they'd accumulated in their savings. So when I think of the 90s, I think of wealth management as kind of an and. You had your it, you had your pension plan, and you had any savings that you'd accumulated on your own. Well, fast forward to this decade that we're in, and what we see is that there are very few company-provided pension plans anymore in corporate America. Corporate America is”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Great question, Barry, roughly half of our clients are referred to us from other clients or advisors to clients. So think of that as half. And then the other half comes from”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, Barry, our typical client is a wealthy family. It might also be entities that you think of as being associated with wealthy families, foundations, endowments, family offices, family businesses, even retirement plans potentially related to families and family equities. So think about the whole ecosystem surrounding wealthy families, the people and the entities, and that's really our client base.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Over time. Increasingly, we take into account borrowing, right? Our clients don't have to borrow, but just like major companies, it might make sense from a capital allocation perspective. Another thing that we have to take into account is after-tax return. Institutions don't pay taxes. Our clients pay taxes every year in every generation. So you have to keep an eye on after tax returns. And so we've built models that help us to integrate all of these things and allow us to kind of show clients perspectively the impact of choices on asset allocation, on spending, on borrowing, on taxes to try to help them chart not only the goal, but what are the things that I have to do to get there?”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Amount of income to support a lifestyle, particularly as they move into retirement. And then the second tends to be about legacy. What are the things that you want to preserve in your family? And they could be financial or they could be non-financial. To preserve from one generation to the next, because our clients have wealth that outlives them. And so we focused very, very hard on what is that goal. And then we use a lot of modeling tools to show all the variables that will impact that goal. Some of them are obvious, right? The market and asset allocation, right? So we'll trigger back and forth between different asset allocations to show the impact of them over time. Some of them are uniquely in your control spending rates. Every institutional investor has a policy on spending. Nobody requires an individual to have a policy or even a philosophy on spending, and yet it has an enormous amount of impact on wealth that you accumulate.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's a great question, Barry. And again, what we really try to do here is we really try to port from the institutional asset management industry over into wealth management the same institutional processes and tools that have helped institutions for so long. So as I said, every one of our wealth management clients, we spend a lot of time with them to actually develop an investment policy statement just as an institution would have. And how do we do that? We do that by first and foremost having to figure out what our goal is. Every family is different. There's an adage that we've seen one wealthy family. You've seen one wealthy family. And that's true. Every family is different. Every family has different near-term and long-term goals. So the first thing we try to do is really be clear on what that goal is. And most of the time we find that there's two aspects to it. Aspect number one has to do with lifestyle. They want a certain, you know,”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Have that. Governance and policy in place. And that's one of the things that we try to do with our clients. We have all of our clients adopted an investment policy statement in wealth management just as if they were institutions. And then we try to help them stick with it when it's hardest. And, you know, we can watch the industry fund flows and we can see whether clients actually do it. And in fact, interestingly enough, what you saw this year as the market was going down and you watched the flows as we do, right? You saw money flowing into cash. We saw record amounts of cash in money market funds. We saw money flowing into bond funds. We really didn't see a lot of money flowing into equity funds when the market was down in March. And so we know how hard it is to stay with your portfolio through the cycle. We told our clients to do that. And if they did, they participated as the market has come back to reach all-time highs.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And the strategy for our portfolio. And we had done stress testing and all the things that you do as an institution. And so here we were in the depths of the financial crisis with bank CEOs taking TARP money. And we had to decide as a board and an investment committee what were we going to do? Were we going to do what our policy portfolio told us we ought to do, which is rebalance and continue to buy stocks as the market was going down because that's what our policy had been tested for. And sure enough, we had to lock arms and do something that was very hard, which was to buy and rebalance when the market was down. And you tend to see institutions do exactly that because of all of the time that has been spent on the policy portfolio and because they know time and market is one of their biggest advantages. It's more important than timing the market. On the other hand, when you look at individuals, they don't necessarily”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's very different, and in fact, having worked in asset management with institutions and also in wealth management with individuals, one of the things that I try to do is to bridge that gap and take the best practices that institutions have and try to adapt them to families. And so let me give you two real life examples, right? Because 2008, a great example, and I'll give you another one, 2011. So what happened in 2008, we all know the financial crisis. And I was on the board of my college at that time. And just by luck of the calendar, we happened to be having a board meeting and an investment committee meeting on Columbus Day in October, which if you take your mind back to 2008, you might remember that was the day that all the CEOs from the banks went down to Washington to take the TARP money. So there we were having our regular board meeting and our investment committee meeting, and we had had, we had done an enormous amount of work on asset allocation.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The second thing about institutions that might be different than individuals is that they have governance and process, right, boards and committees. When you think about individuals, neither of those things is necessarily the case. Nobody tells an individual what their goal has to be. They have to figure that out for themselves, and we spend a lot of time with clients about that. And you don't necessarily have the governance of a board and an investment committee standing in between you and making those decisions. So I think the two things about institutions that are so different is very focused on goals, very well defined, and have governance and process in place to help support it.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“A couple of things are important to know about institutional investors versus individuals. The first one is that every institutional investor knows what its goal is. So if you think about a college endowment, the goal of the college endowment is to earn enough on its portfolio so that it can make distributions to support the mission, you know, typically four, four and a half, maybe 5% a year, and still exceed inflation, right? So call that a, you know, if inflation is 2% and you want to distribute four and a half or five, you want to have returns of over 7%. They know what their goal is.”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Investment planning and decisions are in people's lives. I've also seen it in institutions. You know, I was lucky enough to go to the college that paid for everything. I served on the board for years, including through the financial crisis. And I know how important sound financial management is to institutions too. It enables them to make it through cycles and continue to accomplish their mission. So a lot of it is just sort of the basics. What motivates you in the morning and how can you contribute to people's lives through your career?”
2020-12-03 · Masters in Business · Catherine Keating on Wealth Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source