Veteran investment executive Katie Nixon joins Jeffrey Sherman and Samuel Lau on “The Sherman Show” to discuss the ways in which her client-facing background as a portfolio manager informs her work as a chief investment officer, how meeting a client’s goals isn’t limited to maximizing wealth and tax strategies for wealthy Californians, among other topics. Ms. Nixon is an Executive Vice President and Chief Investment Officer for the wealth management business at Northern Trust. Private Asset Management in 2016 named Nixon one of the “50 Most Influential Women in Private Wealth.”
Ms. Nixon says that she looks at her work as a CIO through the lens of a client and that developing a strategy isn’t just an academic exercise for her. Dealing with people’s money is a huge responsibility. While it’s relatively easy to be empathetic and build relationships when times are good, it’s when things are rough, like in today’s investment environment, that you really need to turn on that empathy quotient. You have to get into the mind of a client to understand what they are going through. Turning back to the Global Financial Crisis, she recounts a coworker telling a client that “this is a three-standard-deviation event,” an explanation that provided no comfort or clarity.
Also in regard to her background as a portfolio manager, Ms. Nixon says she thought for her first two decades that “every client’s goal is more.” Maximizing wealth, she learned in 2008, is not a goal. Using “maximize wealth from a risk-adjusted perspective” is a very inadequate way of managing private wealth. This led her to focus at Northern on designing client portfolios around personal outcomes rather than an amorphous maximized wealth target. Some goals require a lot of risk; some don’t.
In response to Ms. Nixon’s reference to fees and tax efficiency for private clients, Mr. Sherman brings up a proposal in California to hike taxes on millionaires and asks if the best strategy is to leave for those who reach that strata of income. Ms. Nixon says that Northern goes through a regular exercise with clients who live in California and New York over the substantial financial impact of residency in those states. While there is a math side to the equation, there is also the impact of deciding “I have to move.”
Before wrapping up, Mr. Lau asks Ms. Nixon if she has any career guidance to share. Find something you really love and, on the practical side, find a mentor, advises Ms. Nixon, who credits the secret to her success to having strong mentors around her who advocated for her.
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