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Uncertain Economy Raises Stakes for Wealth Management

Featured in Providence Business News, 6/17/2013


WITH GREAT INTEREST: Mark K.W. Gim, Executive VP for Wealth Management at Washington Trust, says that tax policy and an aging population are among the factors impacting the current state of investing.

Westerly, Rhode Island... Mark Gim was appointed The Washington Trust Company’s Executive Vice President for Wealth Management in May. The post is in addition to his existing position as Treasurer for both The Washington Trust Company and its publicly owned holding company, Washington Trust Bancorp Inc.

Gim takes on this critical responsibility amid the nation’s shifting economic landscape and Rhode Island’s sluggish economic recovery. He is charged with establishing and executing strategy for the wealth-management division, strategic planning, and oversight of the bank’s investment and wholesale funding portfolio.

PBN: What is your overall perspective about taking on this critical responsibility, with the nation, and especially Rhode Island, slowly recovering from the recession?

GIM: At first glance, it’s a challenging environment. We have a slow national recovery from the recent recession and an even slower economic recovery in Rhode Island, certainly as compared to the rest of New England. At the same time, it is a time of opportunity, we think, both for investors and for wealth advisers. Clearly, the economic circumstances are quite different from what they were a decade ago. We think the need for advice and solutions is even greater than it was than before the recession.

PBN: What are your objectives in this new leadership position? Will it change the direction of Washington Trust’s wealth-management strategy?

GIM: The overall goals of Washington Trust Wealth Management really haven’t changed very much in the last decade or so, but the way we go about achieving them has. We continue to provide what we think is very comprehensive, accessible, prompt and customized advice to our clients that helps them achieve their goals, and not just to help them watch the value of their investments grow. The direction of our strategy, whether it’s investment management or life planning or trust services, hasn’t changed philosophically, but we think the opportunity to serve that market has increased. We think that we have improved our ability to provide sophisticated and responsive advice. My real objective is just to try to make the breadth of our solutions better known, more accessible and relevant.

PBN: The economy continues to struggle to make significant gains. Why do you think this is so, and how does that impact your wealth-management strategy?

GIM: The financial markets, the stock markets, seem to be reacting out of proportion to what feels like, to the everyday Rhode Islander, a really slow improvement. And while it feels that way in the U.S., in a much more global world, the U.S. is a good story, compared to other parts of the developed world. I can understand why people would say it seems to be out of proportion, but today with money flows coming not just from the U.S., but from overseas, I think that helps account for it. It doesn’t affect our core wealth-management strategy, but I think it has made us more aware over the last 10 years that this is a much more global world, and we cannot be focused on the U.S. alone, just as investors cannot be focused on the U.S. alone.

PBN: Do you see baby boomers still investing? How do you, generally, tend to advise them to invest?

GIM: The boomers are getting older and we are having to adjust to the fact that over the last decade, the wealth we set aside for the future has taken a step back. But at the same time, our needs haven’t changed – retirement, health care, education, transferring our wealth to the next generation. And we have to catch up to future needs. Patterns of investing have changed, but a completely conservative approach to investing and being cautious when the economy is recovering can lead to a loss of opportunity.

PBN: How does your role in guiding wealth management address the changing economic landscape with the bank’s customers?

GIM: It’s not just the economic landscape. Many changes go beyond that – the aging of the population, changes in tax policy as concern over the deficit has grown, the rising costs of health care and changes in public policy around how health care and health insurance will be provided. Not just financial markets, but many aspects of age and public policy make it more complicated for people to try to navigate through the financial world.

PBN: What changes have you seen in the state since you graduated from Brown that give you cause for concern? For optimism?

GIM: Rhode Island hasn’t grown very much in that time, but it has changed a lot. Some things that may be cause for concern are the departure of some very big and familiar names, corporate in particular and some industries, that have changed the face of the economy. Financial services, while there are vibrant and thriving organizations that remain here, the presence has been lessened, whether it’s insurance or banking. Manufacturing has obviously taken a step back. And we haven’t caught up fully to the demands of a globally competitive 21st-century economy. There have been positive changes in public policy that have confronted the issues of doing business in Rhode Island. There are key sectors where we are really good, like health care and education – we have some gems here, in colleges and universities.

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