Alan: Welcome back, I’m here today with Doug Keyston. He's a private wealth client advisor here in the San Francisco Bay area; welcome to today’s show.
Doug: Thanks’ very much Alan.
Alan: Doug, can you give me your background?
Doug: I’m happy to do so. I’m actually a native Californian. My family's been in San Francisco for five generations and I grew up here, went to school down in Pebble Beach at Robert Louis Stevenson School. I then came up and I’ve worked for Bank of America for 20 years in their corporate bank. And about a year ago moved over to their wholly-owned trust Company US trust.
Alan: You Know, your family, five generations, now I understand your family started Keyston Brothers?
Doug: That’s right.
Alan: And they were making whips and saddles way back in the 1800s, mid-1800s they started up?
Doug: That’s right Alan, not too long after statehood in 1868. Keyston brothers was founded in San Francisco by James Keyston.
Alan: And how is that heritage? I guess you know, you know being with a legacy saddle maker there?
Doug: I found it to advantage; I now live in Woodside which is a very horse oriented community. And the fact that I have that Western heritage, where they started out making whips, eventually got into saddle making and actually in the early 1900s were one of the largest saddle manufactures on the West Coast. So actually, a lot of people have heard of the brand and some even have Keyston saddles back in their tack room.
Alan: Whatever spurred your grandfather to get, or was it grandfather or great-grandfather?
Doug: Well yes, it was five generations ago that actually came over from England. So, and as I understand it, there was a very severe economic depression in England and that’s when perhaps a lot of folks considered leaving and migrating here to America. He hit the East Coast, actually stayed in Massachusetts for five years. I believe, during the Civil War and he was making harnesses to aid him in, in the war effort. And when things settled down it was after that, that he migrated to San Francisco via the Panama isthmus.
Alan: So, where's the company today; are you still involved or what?
Doug: The family is not. Keyston brothers is still ongoing in a form. A company acquired it about a dozen years ago and until then it was one of the 4 to 5 longest continually operating companies in San Francisco.
Alan: I noticed that your grandfather was a head of the Pacific Stock exchange?
Doug: He was, actually on three separate occasions. He was one of the largest pure stockbrokers in San Francisco and had the pleasure of serving as president of the Pacific Coast Stock Exchange three times.
Alan; You know, that must have been, you know, within the household I guess, it was an exciting times when stocks were merging, and you know, the economy here was expanding out in the Bay Area. Was your grandfather involved in real estate too or?
Doug: He, he was not but it, it is funny, through my work now at US trust I find so many analogues in my own family history. With him being an investment manager to many and a stockbroker, there are a lot of parallels with what I'm doing now in my own career.
Alan: Well, let’s move into your career; so what are some of the different ways individuals can finance real estate?
Doug: There are a variety of them; one, we have, one thing about US trust is we have, we’re a $190 billion trust company that’s been around for 150 years. And we have our own platform that can help our clients in very many ways but we’re also a window into the broader capabilities of Bank of America. So we can finance real estate, commercial real estate and residential real estate in a variety of ways. Currently, especially with the low interest rates, a lot of our clients actually find advantages to using their investments to generate liquidity. We had a client actually in Florida, in a very tough condominium market that wanted to proceed with a project there before the economy locally had stabilized. And so we actually borrowed via US trust on his artwork in order to affect and start the project ahead of potential competitors.
Alan: What should people be aware of with respect to credit risk?
Doug: Well generally it mirrors the broader domestic and global economy, right? There's not as much transparency these days, I would suggest, as in the past. So I think, we certainly suggest to our clients that they be cautious and structure their opportunities to withstand a downside scenario. And, and so while there are a lot of opportunities these days, I think given the recent difficulties that the economy and the banking industry went through, financing structures tend to be towards the conservative side.
Alan: And we’re visiting here today with Doug Keyston, he's a private wealth client advisor for the ultra, high net worth clients here in the San Francisco Bay area. Doug, we need to take a quick break, and we'll be right back after these messages. And when we get back, I want to get into succession planning, with what that's about today.
Alan: Welcome back, I’m visiting here today with Doug Keyston. He's a private wealth client advisor here in the San Francisco Bay Area. And Doug, it was said a couple years ago Deloitte had written a paper, a white paper on the transition of the baby boomers from the workforce into retirement. And they said that starting in 2010 and over the next 15 years, 80% of the workforce, basically represent the baby boom generation, will be retiring. Which is going to create you know, a paradigm shift to this economy that we live in today. So, you now focus in on succession planning with the, with your position there?
Doug: I do, in fact US trust advises many of our clients on that topic Alan.
Alan: So, how are we approaching succession planning today?
Doug: Well, first I I've become aware of certain interesting statistics there. US trust did a study and found that over half the business owners actually had no succession plan in place, so it is an area that's right for improvement. Ironically, the business owners spend a great deal of time building value, creating value and they work very hard at that. It appears, given those statistics, that they spend less effort on making sure that through succession planning, whether it occurs suddenly or on a more planned timely manner, that there's not valued destruction that occurs attendant with that.
Alan: So I'm coming to you today, saying Doug, I got a business, I don’t have a clue what do, advised me.
Doug: Right, and one nice thing Alan about the US trust model is I’m a private client advisor with US trust and I work with a team of specialists. So, whereas we have a very broad, perhaps the broadest platform in the country in terms of the services that we deliver to our clients to manage their family wealth and their intergenerational planning. The breath of that platform gives us a lot of specialized expertise. And this area with succession planning, is where we have individuals that focus on that as a core competency. So, we can bring in those specialists to advise each individual on family, trust, or philanthropy on ways they can move forward and make sure that any wealth transfers that occur are done optimally.
Alan: Who should have a succession plan?
Doug: Really anyone with sizable assets, and ironically, as I mentioned to you, a lot of folks do not. Those, those that tend to are younger, which I find completely ironic. The statistics I’ve seen Alan, in those age 67 or older, a lot of those folks do not have a succession plan and I would suggest, I take care of myself I have a good diet but I still would not bet that at that age something might not occur to me suddenly. And as I mentioned, a lot of folks spend tremendous time and resources building the value and, and really a succession plan is to, is to, to some extent an insurance policy on preserving that and transferring it as effectively as possible over time.
Alan: What type of clientele do you deal with?
Doug: We, at US trust we can meet a variety of client’s needs. Our strategic clients tend to have a net worth of $10 million and above. But really, US trust can help anyone with half a million dollars of investable assets or more.
Alan: So, are you finding in today's world, with all the volatility of the markets, people having more anxiety out there?
Doug: I am, and I view my job as helping people. And I help them because we all face that situation where we’re tied up with our daily, the things that press our daily schedules. Building businesses, building companies and at work or managing charitable endeavors and what we can do, is take care of the core wealth management needs for our clients and investing needs and really help them on, with specialized expertise where's they may not have the time to devote to it themselves.
Alan: Do you look at your role really, as helping people have a peace of mind?
Doug: Yes I do.
Alan: I’m visiting here today with Doug Keyston. He's a private wealth advisor, client advisor here in the San Francisco Bay area. Doug I want to take a quick break and after we get back, let’s talk about stock markets in today's, you know, volatile environment and maybe some ways that we can plan our future?
Alan: We’ll be right back after these messages.
Alan: Welcome back I’m here today with Doug Keyston. He's a private wealth advisor with the Bank of America here in Silicon Valley, San Francisco Bay Area. And before the break we were talking about succession planning,. But I’d like to move over into the topic of retirement, investing in retirement, strategies. First, what is asset allocation? When I hear that you need to have asset allocation in your investment portfolio, what does that mean?
Doug: Right, it can vary Alan for each client, especially depending on their, their worth and their risk profile. But it’s basically implementing a diversification strategy with their assets to ensure that they optimize returns against any given risk level.
Alan: Why do I need to diversify?
Doug: One, to achieve the highest risk adjusted returns that are, that can be achieved. And it’s also, I, since I came out of a risk background myself with Bank of America and have moved into US trust I certainly bring that as a legacy with me. And so asset allocation through diversification, especially in today's uncertain times with all the global uncertainties, especially at a macro level, it’s very important to be diversified and to make sure that there's no one area where you can achieve you know, sizable losses.
Alan: What should people be thinking about today in the retirement accounts?
Doug: One, asset allocation as you mention. But really, planning early and making sure time is on their side in order to accumulate wealth and compound over time to ensure that they meet their retirement objectives.
Alan: Is there a different strategy at different ages for asset allocation?
Doug: Oh, absolutely, and it can link a little bit to personality type but generally the older one is the more cautious and conservative one should be with investments and the asset allocation profile. Because there's less time for them to earn it back before the time when they may need it.
Alan: So I'm looking at retirement, let’s say that I'm in my late 60s, I’ve got three years out for retirement. Are there concerns that you as an advisor would have today with the volatility in today's market together with the fact that you’re going to have a lot of people transitioning from the workforce at the same time?
Doug: Absolutely, we look at the macro themes and one nice thing about US trust is we have what we call our top of the house thought leadership. And these are very seasoned investors with excellent track records that look at the macro themes both in the US domestic economy and globally as well. And from those they provide our portfolio managers with timely information on the areas to best invest to achieve the highest risk-adjusted returns. And of course that translates to the benefit of our clients; we always provide that as a, as a benefit in perspective to our clients but ultimately we customize our investing for each client based on their own, own needs and risk profile.
Alan: How often should a person be adjusting their portfolio?
Doug: It depends on the complexity of it in and the positioning of it. But generally, were talking to our clients at least three to four times a year in the ordinary course. And then when secular change, or large events might occur, it could be more frequently.
Alan: So give me an example, a person getting ready for retirement, what types of investment strategy would they be employing?
Doug: It depends a little bit on their objectives. In other words, what's the situation with where they’re living now, the end of their children, where are they at that stage in their life? And perhaps, where are they moving or planning, where will their domicile be for retirement? But based on a variety of needs, we look at their situation holistically. And one nice thing, I talked about our team approach at US trust, we have wealth strategists that will actually model based on our clients assumptions. Monte Carlo simulations, that’s a description of a variety of complex models that, that will produce a range of potential outcomes for our clients; so that through a dialogue, we can find a way to best accomplish their objectives.
Alan: What’s a realistic return that people should be looking at in today's market?
Doug: Oh, there’s a tough question. Because it does relate so much to their portfolio. The, whether they’re conservative and, if they’re late in life, perhaps they’re conservative about maintaining their principle rather than risking it. So it can definitely range, depending on the types of investments. From anywhere from, you know 3, 4, 5%, up to as high as 12, 15%. Depending on how they orient their information, there investments and how they choose which segments they choose to invest in. Again we talked about asset allocation and the diversification, so we may achieve a variety of those returns that end up in a blended return for our clients.
Alan: Now I understand that in your position you’ve been involved with some ranch and timberland?
Doug: Yes that's right, that's one of the things that was a big draw for me personally to US trust. US trust has a specialty asset management group and we will go out and acquire and manage for clients, generally are wealthier clients, farmland ranchland, timberland, oil and gas properties, commercial properties and even private businesses. For example Alan, we’re the largest fiduciary manager of farmland in the United States. So we have, something on the order of a $12 billion portfolio of that, of those kinds of assets for our clients and again we’ll buy or sell or help them manage them. And it’s something, that especially these days, our clients are finding increasingly interesting.
Alan: You find that in today's world it, having hard assets is better?
Doug: Yes, some of our clients really are drawn to that, yes. That’s precisely the case.
Alan: It seems, as time goes on, to have that tangible piece of property is more comforting?
Doug: Yes and in the case of timberland, it’s always hard to know what one could, one could certainly make a case that given that home building is in an early recovery, recovery phase. It’s perhaps good timing, you know, to consider a timberland investment?
Alan:: Doug, how does one reach you?
Doug: I can be reached a variety of ways, I'm with US trust. That’s US trust.com. My name is Douglas Keyston KEYSTON, I have my own webpage that is part of the US trust site. And then my phone number is 650-849-2193, my email address Allen, is Douglas dot Keyston at US trust.com.
Alan: Doug, I’ve enjoyed having you on today’s show
Doug: Thank you Alan.
Alan: We’ll be right back after these messages
About Doug Keyston
Doug Keyston is a Senior Vice President and Private Client Advisor with U.S. Trust®. He leads a team of advisors supporting the needs of ultra high net worth individuals and families. Prior to joining U.S. Trust in 2012, Doug was a Credit Risk Executive in the Specialized Industries Group at Bank of America Merrill Lynch. He was responsible for the Gaming & Leisure and the Sports industry segments globally. Doug previously managed the Bank’s lodging portfolio globally. Doug has deep experience working with senior corporate leaders and business owners and is well versed in corporate, commercial and real estate financing.
Before Bank of America, Doug was with Allgemeine Treuhand, AG, a Swiss partner of Arthur Young and Co. He was also with Century Capital where he managed office leasing and was a senior leader at First National Bank of Chicago specializing in corporate real estate lending. He also worked for The Krausz Companies where he focused on real estate development, management and financing.
Doug is adept at asset allocation and estate planning. At U.S. Trust , he provides highly customized and personalized private wealth management services designed to meet the needs of clients by helping them navigate the complexities of managing wealth.
A life-long Californian and native of the San Francisco area, Doug serves on the board of the San Mateo County Historical Association and holds a Bachelor’s degree in Economics from UCLA.