Gary J. Friedmann is vice president and portfolio manager for Rockland Trust’s Providence Investment Management Group. A certified financial planner and a CFA charterholder, Freiedmann’s 25 years of experience in investment management includes positions with Washington Trust Investors and Fleet Investment Advisors.
He is on the boards of Providence Society of Financial Analysts, Boys & Girls Clubs of Providence, and Fund for UCAP.
Friedman has a degree in business administration with a concentration in finance from the State University of New York at Albany.
PBN: Rockland Trust has a long history of partnering with nonprofits to help understand and develop strategies for their investments. How long have you been working with nonprofits and how did those relationships develop and grow over time?
FRIEDMANN: I have been working with nonprofits in a professional capacity for more than 20 years, while Rockland Trust has been providing investment management and fiduciary services to nonprofits for more than 25 years. Becoming a good investment counselor takes more than just offering financial advice. The mission of Rockland Trust’s Investment Management Group is to provide world-class investment solutions with the highest level of client service, delivered locally. The successful implementation of strategy will build trust, which is the core requirement of any lasting and rewarding relationship.
PBN: The economy continues to struggle to recover in Rhode Island. What are some of the challenges specific to nonprofits, especially in the Ocean State, and how might strategic investing help them overcome those challenges?
FRIEDMANN: We have had two significant stock market corrections since 2000 and one of the deepest recessions since the Great Depression, both of which continue to have an impact on nonprofits in Rhode Island. This “perfect storm” of events caused many donors to reduce or eliminate charitable donations, as well as causing many nonprofit investments to decline significantly in value, negatively impacting the ability of organizations to rely on distributions from the portfolio for operating budgets. Rockland Trust’s investment philosophy is based on the belief that consistent application of sound investment principles produces superior long-term results. Strategic investing, or the periodic rebalancing of investment portfolios, takes the emotion out of investing in difficult market environments. As an example, many nonprofits reduced or completely sold their stock positions in 2009 and subsequently missed the strong recovery in the stock markets since then.
PBN: Rhode Island has a very competitive financial services marketplace. How does Rockland Trust compete for this business?
FRIEDMANN: In addition to the institutionally based investment solution that we provide our nonprofit clients, we also provide comprehensive, customized consulting services to help them understand and meet their fiduciary responsibilities. We help organizations reduce their fiduciary risks by bringing clarity to and monitoring an organization’s obligations and responsibilities. Our approach is to create a team environment by partnering with nonprofits to enhance investment policies to ensure the future sustainability of the organization. We work closely with the board and investment committee on compliance reviews, developing an investment policy, investment monitoring, participating in or heading committee meetings, capital planning and, if desired, individual board member consultations.
PBN: In past years, have nonprofits tended to protect the privacy of their assets and donors? Are they more inclined now to lean on the support and counsel of professional investment advisors?
FRIEDMANN: In my experience, nonprofits are more protective of their donor list than the privacy of their assets, since this information can be obtained in the organization’s 990 tax filing. Many organizations are beginning to see that there is a benefit to working with a professional co-fiduciary as they realize the complexity of adhering to proper fiduciary standards and as now, more than ever, donors are more apprehensive and are beginning to show interest in how their “investment” in the organization is managed.
PBN: Are there strategies you recommend to nonprofits that might be applied, more than they are now, to other organizations or businesses?
FRIEDMANN: Many of the same strategies and guidelines utilized by nonprofits can be applied to other types of relationships. As an example, a well crafted Investment Policy Statement is the foundation on which a prudent investment portfolio will be built. Our consultative approach to the discovery process allows any of our clients to set investment objectives that are unique to their particular goals and objectives. At Rockland Trust we work with clients to design asset allocations, and the corresponding Investment Policy Statement in order to structure the assets so that that there is a high statistical chance of meeting their return requirements. Our asset allocation methodology uses mean variance optimization with the specific intent to minimize downside risk in difficult market environments.
Vice president and portfolio manager for Rockland Trust’s Providence Investment Management Group talks about the institution’s history of partnering with nonprofits to help understand and develop strategies for their investments.