3 min read March 2024 — The Haverford Trust Company President Keith Aleardi sat down with Invest: to discuss the realities of operating in today’s business environment, how to differentiate in a competitive market and projections for the economic landscape in 2024 and 2025. “We had our best year ever in 2023 coming off a record 2022, and Philadelphia and its surrounding region is solid,” he said. “This creates a great opportunity for businesses to grow and succeed.”
What opportunities exist for companies like yours operating in the Philadelphia area?
The Haverford Trust Company is in a very competitive industry in this area. There are a number of firms operating here, which creates an amazing opportunity for us. We get to differentiate and distinguish ourselves in an exceptional field. Large banks, small banks, mutual fund complexes, insurance company headquarters and more make for a robust and rich environment for financial service companies in this region. On the other hand, the industry as a whole has become what I would call homogenous. Firms look a lot alike, with similar solutions. As we look forward, I believe Haverford has some distinguishing characteristics and qualities that separate us from those other organizations. Our philosophy is based on Quality Investing, which has over time become an enduring ethos that elevates every part of our business to the absolute highest standards. It is our DNA, and this is who we will always be.
Which investment vehicles have surprised you, and what do you anticipate will thrive looking ahead?
First, we believe our philosophy of quality stocks that pay dividends is such a great way to invest for the long term because it is time-tested in all types of investment climates. However, alternative investment vehicles, such as private equity, private credit, ESG strategies, and structured products have gained popularity over the last few years. One area we have seen growth specifically is in private investment. The way we think about alternative vehicles is by retaining a highly disciplined investment philosophy which includes traditional investments such as U.S. large company stocks and bonds as well as international market funds, while considering newer investment products and whether they are appropriate to incorporate into client portfolios. Each client is unique, and investor behavior can change quickly. Investment vehicles ebb and flow in their popularity and preference, so it remains to be seen if any one of these alternative vehicles has staying power. We like being a firm that stays disciplined.
How are you positioning the firm in the changing dynamic of wealth transferring to younger generations?
It is our practice to work with the family in terms of their wealth. We are looking to meet and educate second and third generations when appropriate. Families have begun realizing that bringing their children into the relationship earlier rather than later is valuable, particularly as parents age and become more dependent on their family as a whole. As a firm, we find it important to foster client engagement and the evolution of what that looks like. Historically, we would have scheduled meetings in-person and regular phone calls. Now, as demographics change, clients want engagement on their own terms. They want to have that balance of working with an investment manager who is side-by-side with them and working with them in their own personal way. Firms like Haverford are looking ahead with their clients and evolving their engagement as needed. While we still have traditional face-to-face meetings, we constantly look to enhance our content that is available to clients on-demand. The insights we are providing in that platform are specific to those looking to read something on Sunday morning over coffee or on a weeknight right before bed. As an example, we developed a podcast in 2023 to accomplish this and production on future episodes has already begun.
What service offerings are you looking to strengthen or bring online?
I am very proud that we have had a record year in terms of onboarding and establishing new relationships with families and institutions. Our firm has grown its staff by 15% in the past 18 months to continue delivering exceptional client service and investment management services. We have kept pace and accelerated our growth by the additions made to our team. This is the right size for us. Some firms have had challenges in finding out what that means for them post-pandemic. From a product and service standpoint, we have put a premium on planning, insights and guidance in addition to our investment capabilities. We put an emphasis on listening to the clients and discussing what is happening in their world for the majority of the meeting. From there we personalize our guidance to their specific goals and concerns.
What is your outlook for your industry in the region, and how does this inform your priorities?
I am extremely optimistic about the Philadelphia region and the industry as a whole. My outlook for 2024 and 2025 is a road to normalization. By that I mean in the past few years, everything from labor, doing business, high inflation and rising interest rates have made things lumpy. As we walk into a period of normalization, I do not see it as going back to the way things were. Instead, I believe we will be settling in with economic growth, inflation, interest rates and a hybrid workforce environment. We had our best year ever in 2023 coming off a record 2022, and Philadelphia and its surrounding region is solid. This creates a great opportunity for businesses to grow and succeed.
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