2 min read June 2022 — The Haverford Trust Company provides investment management services, offering wealth management, financial planning, portfolio management and advisory services. In an interview with Invest:, Vice President and Director of Global Strategies Maxine Cuffe discussed achievements and milestones, innovations, changes in the work environment, shifts in demand, ESG and the importance of global investments in portfolios.
What have been some exciting achievements and milestones for The Haverford Trust Company over the last year?
It has been a very interesting couple of years. We managed the transition to the virtual environment well. One of our flagship events is our Speaker Series for Women. We usually hold them three times each year. We invite women from diverse backgrounds and it is very empowering to be in a room full of interesting women. Transitioning to online events was a new experience, and I think we did a fantastic job over the past two years hosting them online and trying to make interesting and relevant content. Our Speaker Series is all about celebrating female empowerment through knowledge and, in particular, we work to educate women on finance. In one of our virtual programs, we partnered with the Museum of the American Revolution to compare the history of women’s right to vote and the right to own property back in the 1700s to women’s financial situations today. We just had our first live (SS4W) Speaker Series a couple of weeks ago and people were excited to be back in person.
We also do a lot of community engagement work and are proud to have our employees involved with several local nonprofit organizations.
We work closely with Cristo Rey Philadelphia High School. We sponsor an internship program that funds a scholarship for four students to attend the school, and we provide work experience for the same number of students. In addition to their ‘job’ at Haverford, we do stock analysis and financial education with those students. The students constructed mock portfolios, and at the end of the year we’ll see whose portfolio has outperformed the S&P 500, making it a great educational experience. Lastly, ESG investing has been a core product for us, and we are expanding some of our active management and global portfolios.
What are some of the most exciting innovations that are being implemented in the company?
About three years ago we realized that ESG was going to become a big part of the future of investing, so we hired a corporate sustainability analyst. Upon analysis, it turns out our investment style tended to correlate with strong ESG companies, and a lot of the work we were doing was already incorporating ESG factors. We started applying screens for ESG metrics across our portfolios and taking the next step to talk to companies in our portfolios about their initiatives in diversity, climate and sustainability. As the desirability for this information increases, companies are starting to report more information and have more disclosure for ESG metrics. At the same time, we have become much more active in Proxy voting on ESG issues. All of these initiatives have been very well-received by our clients.
Another new area of expansion for Haverford is our financial planning team. They’ve been extremely busy over the past three years. The pandemic increased people’s interest in the stock market. People are putting money aside in their 401(k), but they lack a holistic view of how much they actually need for retirement. So, our team does a great job at looking at assets and doing scenario analysis to increase people’s confidence about their financial future.
A third area has to do with our investment in technology. With our new Haverford Direct portal clients can tap into an app and see their portfolio in real-time. Our surveys show that 60% of people think about their investments at least once a week, so with our app they can see their positions and what is going on with their portfolio. The platform also gives us the ability to have secured email conversations with clients and send confidential information. Lastly, we are looking to engage the next generation and help them understand how their finances are working, and to try to get them involved in investment decision-making. Having this technology in place is really important to connect with that younger generation.
How has the work environment at Haverford been impacted by the pandemic?
The unemployment rate is almost back to where it was pre-pandemic. I hear from a lot of companies and small businesses that they struggle to find the right people, especially as workers don’t want to work night shifts or during the weekend. Thankfully, Haverford has a great reputation for being a top employer. We have amazing benefits and a work-life balance, so we have been able to manage through this period.
We have hired more than 20 people since the beginning of COVID, and we are expanding as our assets and product offerings grow. We’ve always had a low staff turnover. Some of our employees have been with us for 25 to 35 years. We have a great camaraderie across our team, and we celebrate achievements and major milestones. We do our best to promote a strong work-life balance and we’ve announced that we will continue a hybrid work environment going forward, with three days in the office, which reduces commuting times and offers our employees more flexibility.
The virtual environment has also allowed us to reach our clients more often and in a more efficient manner. Many of our clients live outside of the Philadelphia area or don’t want to come into our office. There are things that we are doing differently now because COVID forced us into finding new ways of working. When COVID emerged we began a program called Walk With Binney, in which our president took a walk individually with every single member of the staff. That was more than 100 walks! It rolled out into a firm-wide charity drive. We formed teams and we tracked how much we walked daily. The winning team was given $5,000 to donate to their chosen charity, and every team was able to designate $1,500 to their chosen charity. But it was also a great way to connect with all the new employees we hired during the pandemic that we had only met virtually.
How does demand for your services today compare to pre-pandemic levels?
It has been interesting because COVID has made people think more about their financial future and to expect the unexpected. When the pandemic started none of us expected the markets to have a huge correction and then come back so quickly. But this allowed people to evaluate if they were investing appropriately. When the markets fell it gave people the opportunity to think about if they had the right asset allocation, if they were taking too much investment risk, and whether they had enough of a cash cushion to cover an emergency. Many older workers figured they had enough investments and took early retirement during the pandemic.
When we consider the current market, the current inflation rate of 8% has sparked people to think and plan more for their future. The landscape has changed significantly as home prices are 20% more expensive than before the pandemic, and mortgage rates have gone up too. Additionally, because of the current health risks, people are taking time to be more organized, have their financial and legal documents in place, and consolidate their assets in case a worst-case scenario happens again. We are here to help them and support them with their needs, in their unique situations.
What are some ways Haverford is adapting its different products?
In addition to the hiring of our corporate sustainability analyst and the formalization of our ESG process into our investment philosophy and selection process, when we think about ESG it is not about excluding sectors but trying to find the best companies who are using ESG initiatives in their business process.
Today, we have different ways of offering global investment exposure than what we offered a couple of years ago. Our global portfolio was previously constructed utilizing passive exchange-traded funds, with the goal of being very efficient and cost-effective, but we found that there is increasing demand for a more sophisticated kind of global exposure. So we have added OCIO services for institutional investors, which enables us to offer a bigger platform of externally managed funds that have a complementary investment style to Haverford’s internally managed strategies.
What role does global investment play in an investment portfolio?
The first thing is that it offers some diversification. If you look back at the U.S. market for the last 10 years it has experienced phenomenal growth and outperformed the rest of the world, but that is not always the case. For example, in the previous decade, it was the opposite. International assets outperformed those in the U.S. So, having exposure to international assets creates diversification benefits in the case we have some underperformance on a national level.
A lot of the performance of the U.S. stock market has been driven by a handful of technology-related stocks. Today the S&P 500 is highly concentrated, with just 5 companies responsible for almost a quarter of the index. Most international markets don’t have that. Often these trends move in long cycles. We could see rotation into other markets that are not so technology-driven and where value outperforms instead of growth. European and Asian markets trade at a huge discount to US stocks, so there are attractive opportunities out there.
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