restoring client trust in the post-crisis environment - peter guernsey, wilmington trust company
TRANSCRIPT
December 7 – 9, 2014Las Vegas, N.V.
private wealth pmanagementsummit
Restoring Client T tTrust
Peter E. “Tony” Guernsey, Jr. Chief Client Advocate, Wilmington TrustChief Client Advocate, Wilmington Trust Company350 Park AvenueNew York, NY 10022
private wealth management summit December 7-9, 2014
R.I.P. Banks we have lost… 1st ChicagoAllfirst Financial
European AmericanFiduciary Trust CompanyAllfirst Financial
Amsterdam Rotterdam Bank NV Banco Svizzera ItalianoBank Austria Creditanstalt AG Bank of Boston
Fiduciary Trust Company First Charter Bank First Interstate Bank First National Bank of BostonFirst National Bank of Chicago
Bank of New EnglandBank of TokyoBank One Corp. Banker’s Trust B B l L b t
First National City BankFirst UnionFirst Virginia Banks Inc.FleetBostonF kli N ti lBanque Brussels Lambert
Banque National de ParisBarnett Bank Boatman’s Bank Boston Safe Deposit
Franklin NationalGolden State BancorpGolden West FinancialGoldomeHarris BankBoston Safe Deposit
Canadian Commercial BankChartered West LBChemical Bank Commerce Bank
Harris BankHartford NationalHibernia National BankIndustrial Bank of JapanInvestors Bank & Trust
Continental Bank Core StatesCrocker BankDime Bancorp D d B k
Irving Trust Co. J.P. MorganKeystone Financial LaSalle Bank L b d Odi
©2011 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
Dresdner BankEspirito Santo
Lombard OdierLong Term Credit Bank
private wealth management summit December 7-9, 2014
R.I.P. Banks we have lost… Manufacturers Hanover Marine Midland
Republic of Texas Riggs BankMarine Midland
Mellon Mercantile BankMichigan National BankMidland Bank
Riggs Bank Saudi International BankSchrodersSecurity PacificShawmut Bank
Midlantic BankMitsubishi BankMorgan Grenfell & Co. Nat WestN ti l B k f D t it
South TrustSouthwest BankStandard Chartered Merchant BankSummit BancorpS it B kNational Bank of Detroit
National City Corp. National Commerce FinancialNationsbankNCNB
Summit BankSwiss Bank Corp.Texas CommerceU.S. Trust Union Planters CorpNCNB
Nippon Credit Bank North Fork Bank NorwestPenn Square
Union Planters Corp. U.S. Bancorp Wachovia Washington MutualWegelin Bank q
Pittsburgh National BankProvidence BancsharesQuaker City Bank Republic Bank R bli B
gWestminster BankWilliams & Glyns BankWilmington Trust World Savings Bank
©2011 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
Republic Bancorp Republic National Bank of New York
private wealth management summit December 7-9, 2014
R.I.P. Brokerage Firms we have lost…A.G. EdwardsA.G. Becker
First Boston Furman SulzA.G. Becker
Alex Brown & SonsArnold & Bleichroeder Inc.BacheBaker Weeks
u a SuH.C. WainwrightHambrecht & QuistHambrosHarris Upham
Barclays de Zoete WeddBaringsBear SternsBlythe Eastman DillonBurnham
Haydon StoneHemphill Noyes
BurnhamC.J. LawrenceCazenove & Co.Clark DodgeCredit LyonnaisyDarier Hentsch & CieDean WitterDillon ReadDLJDonaldson Lufkin & JenretteDresdner Kleinwort BensonDrexelE.F. HuttonEberstadt
©2011 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
EberstadtF.S. MoseleyFaulkner Dawkins & Sullivan
private wealth management summit December 7-9, 2014
R.I.P. Brokerage Firms we have lost…Herzfeld & SternHill Samuel
Thomson McKinnon Wasserstein Perella & Co.Sa ue
Hornblower Weeks Kidder Peabody Kuhn, Loeb & Co. L.F. Rothschild
asse s e e e a & CoWertheim Wheat First SecuritiesWhite Weld Wood Gundy
Laird & Co. Lehman Brothers Loeb Rhoades Long Term Capital ManagementMerrill Lynch
Yamaichi Securities
Merrill Lynch Montgomery Securities Paine Webber Paribas Phillips & DrewpPiper JafrayPrudential BachePutnam LovellRobert Fleming & Co.
C & SRobertson Coleman & Stevens Salomon Brothers SG Warburg Shearson HamillShields
©2011 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
ShieldsSmith BarneySpencer Trask
private wealth management summit December 7-9, 2014
1980’s Big 8:Arthur Young & Company
R.I.P. Accounting Firms
Arthur Young & CompanyCoopers & LybrandErnst & Whinney (formerly Ernst & Ernst)Haskins & Sells (merged with European firm to become Deloitte, Haskins and Sells) KPMG (formed by merger of Peat Marwick International and KPMG Group)( y g )Price WaterhouseTouche Ross
2014 Big 4:Deloitte Touche Tohmatsu LimitedErnst & YoungKlynveld Peat Marwick Goerdeler (KPMG)PricewaterhouseCoopers (PwC)
R.I.P. Law FirmsToo long to list….
©2011 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
private wealth management summit December 7-9, 2014
Evolution of Wealth Industry
1970’ P l B ki1970’s - Personal Banking
1980’s - Private Banking
1990’s - Private Client Services
2000’ W lth M t2000’s - Wealth Management
MFO’s – Multiple Family Offices
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private wealth management summit December 7-9, 2014
Private Client Services
©2010 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
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private wealth management summit December 7-9, 2014
Private Banking
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private wealth management summit December 7-9, 2014
1990s
Glass- Steagall 1933-1999
Banks convert to full financial Services firms
Backbone of Private Banking in the 80s- unsecured lending
Losses- Merrill, Citibank, B of A
Perception of reduction of revenues versus actual losses
Consequence, choose your niche
©2010 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
private wealth management summit December 7-9, 2014
Simultaneously, Technology Takes Hold
Forced clients away from single wealth provider platform
CNN, PCs, Bloomberg, Blackberries, Apple
Fox News, on line banking, online portfolio, discount brokerage
©2010 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
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private wealth management summit December 7-9, 2014
Your Personal Financial Vendors of Today do what?
CMA- cash
Checking and savings accounts
Lif I t ilit d i di id lLife Insurance, corporate, military, and individual
Personal mortgage flipped to mortgage backed markets
DB Plans out, DC in- hundreds of Mutual funds to choose from
Pretax health plans
Discount brokerage
529 Plans529 Plans
Tuition loan from Gov’t
Car loan- USAA
Custodian of securities
Hedge Finds
Fund of Funds
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Fund of Funds
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private wealth management summit December 7-9, 2014
G ld 144 L di
Pick a FlavorGoldman-144 Lending
Morgan Stanley- Emerging Markets
Deutschebank- Capital Markets
J.P. Morgan- Self-directed investor, J.P. Securities
The Swiss- International diversification
BONY- Custody
Northern- The Family Office
Banker’s Trust- Derivatives
Republic GoldRepublic- Gold
Bessemer- Oil and Gas Co-investing
Manufacturers Hanover/Chemical/ Chase- Middle Market Corporate
Brown Brothers- Forex
Boston Safe- Jumbo Mortgages
Wilmington Trust- Fiduciary
©2010 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
Citibank-global
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private wealth management summit December 7-9, 2014
The Client Meeting of 2014
• Update on the family…
• Quarterly review of portfolios
• Some more needed financial planning
• Review Changes in Tax Law
• Gifting…
• Nice being with you….
No Wait©2010 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
No Wait…13
private wealth management summit December 7-9, 2014
Do you provide….?
Aircraft leasing
Autistic Child
Offshore trust from French relative
College Placement advisor
Boat financing
Divorce or litigation attorney
Surgeon at MT Sinai Hospital
Summer Internship for child or grandchildp g
HELOC
Trustee for addiction care trust
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private wealth management summit December 7-9, 2014
Evolution of a Client Advocate Potential Client Pitfalls
LendingMortgage Recording tax Coop Flip TaxMillionaire’s Tax Proposed Excise Real Estate taxMargin Loan Guaranteed LoansReverse Mortgages LIBOR LitigationTax Exempts
Investing Perceived Risk Structured ProductsOption Strategies 770 accountsAnnuities ETFSYield – MLPs Wash SalesCyber Security PasswordsMadoffsMadoffs
TrustsBarbaro Trust – Pets Rowe’s TrustZealots Trust Genetic Material
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Zealots Trust Genetic Material
private wealth management summit December 7-9, 2014
Fees
Cost -3% to have your wealth managed
Account level fee
Custody and brokerage fees
Mutual Fund expense fee ratios
Investment placement fee
Life insurance
Executor/ Trustee
30/50% prop trading feep p g
©2010 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
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private wealth management summit December 7-9, 2014
©2010 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
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private wealth management summit December 7-9, 2014
©2009 Wilmington Trust FSB. All rights reserved. 18
private wealth management summit December 7-9, 2014
Tactical Asset Allocation for the Personal Economy
Critical Annual Living Expenses MedicalTuition MortgageReal Estate Taxes InsuranceIRA contribution
ParentalParental529s and Tuition of Grandkids Annual GiftsBoomerang Expenses – funding your child’s adulthood Medical Payment Support
Aspirational 2nd Home Increased TravelB t/Pl Phil thBoat/Plane Philanthropy
©2010 Wilmington Trust Corporation. All rights reserved. Please see the disclosures for important information.
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private wealth management summit December 7-9, 2014
Languages of Wealth 1. Trusts - clat, clut, grat, IDIT, Roth, IRA, 529, 770, Credit Shelter, QTIP, QDOT
2. Market - alpha /beta, black pools, closed end funds, fat finger trading. ETFs,2. Market alpha /beta, black pools, closed end funds, fat finger trading. ETFs, spyders, systemic risk, HFT, inversion deals, tape tantrum, too big to fail, structured products, covered calls, guarantee, black swan, Venmo, Bitcoin…
3. Investment Degrees - FINRA, NASAA, GSRE, CFA, CFP, CMFC, CIPM, CPCU, CHFC, CPA, CLU, RR, RIA…
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private wealth management summit December 7-9, 2014
Macro Challenges and Solutions
The sea of sameness
Loser’s game-400,000 brokers (est. 2016) competing to exceed market’s relative
indices
Economists track records and managers beating their own index
Trying to be right twice
Redefining and prioritizing the soft issues that have suddenly become the hard issues
Don’t have it? Need to be the resource of knowing the best place to get it
Educate your clients about the jargon
Assist the clients in giving back to the society and country that enabled them to become
wealthy
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