Building a Private Bank: Discipline, Trust & Long-Term Investing with George Dickson, Jr.

David Marcus: Welcome to Partnering to Create Wealth. I’m David Marcus, managing director at New York Private Bank and Trust, the private wealth division of Emigrant Bank, one of the oldest and largest privately held banks in the US. On this podcast, I speak with entrepreneurs, investors, and industry leaders about how they identify opportunities, build companies, and create wealth for themselves and their partners, all against the backdrop of today’s rapidly evolving world. Thanks for listening. Today I’m joined by George Dickson Jr. George is a senior executive vice president and chief investment officer of New York Private Bank and Trust, an Emigrant Bank. He also serves on the boards of Sarasota Private Trust and Cleveland Private Trust. George, welcome to Partnering to Create Wealth.

George Dickson Jr.: Thanks for having me, David.

David Marcus: Before we talk about markets and investing, let’s cover a bit of history. Emigrant Bank was founded in 1850 by the Irish Emigrant Society as the Emigrant Industrial Savings Bank. The Milstein family purchased the bank in 1986, and Howard Milstein began building the modern platform around New York Private Bank and Trust in the early 2000s. For people who may not know the firm well, how would you describe the evolution of the bank over that period, particularly from the Milstein acquisition onward? Maybe just start at a high level, and we can come back to some of the pieces in more detail.

George Dickson Jr.: Sure. There’s a lot to talk about, David. I’ve been here coming up on four decades, so I’ve been here for pretty much the whole time of the Milstein ownership. And as a point of pride, as an Irish American, it’s been a pleasure to be associated with Emigrant Bank. We just celebrated St. Patrick’s Day this week, and it’s always been a part of the DNA of the bank.

David Marcus: Yeah, I can imagine.

George Dickson Jr.: During the Milstein tenure—let’s see, we’re talking about probably ’86 on. The best way I describe it, when I tell people who might get the joke, is that it’s not your father’s savings bank—a reference to the old Oldsmobile commercial—but it really isn’t. We’re a $6 billion savings bank with New York DNA and all the other history we can probably talk about later, and a lot of fun things to discuss. A big transition had to occur under the Milstein ownership. We had thirty-some branches; it was a brick-and-mortar situation, and Howard Milstein had the vision early on—and this is talking 2005—that we had to evolve to be here in 2026 and beyond. The key there was to do internet banking, at least to start in earnest when nobody else was. That’s around 2005, when interest rates were relatively high, 5% and 6%. A couple of interesting things happened. Things like eBay had come about, and PayPal, and people understood that you could set up a link to your checking account and send things over the internet safely, so that really got traction in 2006 and 2007. It allowed the bank to transform into a national one, gathering deposits across all 50 states. We ended up selling a lot of the brick-and-mortar business to Apple Bank, probably around 2010. We still have our main branch here in Manhattan at 22 Vanderbilt, but we’ve really morphed over time. Now it’s 20 years on, and these are the same types of savers at Emigrant Direct. They’re really the passbook saver who has morphed into an internet saver—nine- and ten-thousand-dollar accounts. They’re very sticky and loyal. They stay with us, and we pay a good rate. The other point Howard always made was that you’ve got to give the clients a fair deal.

David Marcus: These are the clients you believe came in with the beginning of internet banking?

George Dickson Jr.: Yeah. With some of the savings bank’s clients, when the depositor passed, the money would be distributed out, so over time we had to do something about the mortality rates of our savers. But we did pick up a lot of savers. You had to be sufficiently adept at the internet back then, but they adopted it fast. Over time, we felt comfortable that the internet deposit approach worked. We actually have three internet banks: Emigrant Direct, My Savings Direct, and Dollar Savings Direct. Dollar Savings is actually a play on Dollar Dry Dock, another savings bank we acquired around 1993. So we have three different identities, which gives us a little flexibility in terms of pricing, target market, size of deposits, and so on. But it really is a platform that has now proven itself over 20 years. There’s always skepticism early on—will this money stay around, will it be sticky or not? Howard has really mastered the controls on that, and it is sticky. It stays around, and it’s a great base and alternative. So that’s the Emigrant platform. But he also saw that our typical depositors were not going to be private bank clients, and he needed a whole new identity for that. That came about with the creation of New York Private Bank and Trust around the early-to-mid 2000s, and that’s a whole other thing that takes us, I think, to today’s conversation.

David Marcus: That’s really helpful, and such an interesting history. The bank has also lived through a number of financial crises, from the 1987 crash to the 2008 financial crisis, the pandemic, and even the banking volatility in 2023. What do you think has allowed the institution to remain so resilient?

George Dickson Jr.: That’s something the Milsteins really respected early on when they bought the bank. I remember at the time I was in Philadelphia, and you’d read the papers and think, “Oh, this real estate development family has purchased a savings bank. Are they going to use it as a piggy bank?” It was quite the opposite. It was always a good credit situation at the bank; it was just an interest rate environment that got upside down, with short rates going up in the 1980s. The credit on the balance sheet has always been strong. It was interest rate mismanagement at the time—or what the Fed was doing—that created the opportunity for them to buy it. But they always wanted to keep pristine credit quality. The other change we made was to match our liability and asset maturities, and that protected us. So in ’87 I was still in Philadelphia and came up soon after. It’s funny—it’s like a bookend, right? You have ’87, then the next big thing, sadly, was 9/11, and that affected all of us. You had the subsequent war, then the financial crisis in 2008, and it took four or five years to get through that, and then you had the pandemic. If you look back in history, we had the Great Depression and other panics. The bank’s been around 176 years, and one of the things the family wanted to do was make sure that under their stewardship it was going to be around. Now they’re at the 40-year mark, but they’re looking for the long term. The key was having enough capital. We just had, in 2023, a mini banking crisis you wouldn’t think would happen, right? You had First Republic, Signature Bank, and Silicon Valley Bank—all three went down, and that’s after the great financial crisis when everything was supposed to be fixed. A big problem there was mismatching asset-liability maturities. So really, from the beginning of the Milsteins, the goal was to make sure that was matched and that there’s always plenty of capital. Believe it or not, we have roughly 20% equity capital against our assets, and that’s unheard of. It’s the highest of any domestic bank in the country. One of the reasons is a Fort Knox balance sheet. You do not know what’s going to happen—Howard has said that over and over again. In a pandemic, these surprises come up. And then after the pandemic, you think you’re lucky to get through it, and in 2023 you have this random banking crisis. Now, it wasn’t anything as serious as the great financial crisis, but I had people calling up and saying, “Hey—”

David Marcus: It scared a lot of people, and—

George Dickson Jr.: It scared a lot of people, and they did irrational things. So you remind them of how we do things when they’re scared and nervous. And if they’re really nervous, we can buy them US Treasuries, which you have to do sometimes to calm people down. So really, a Fort Knox balance sheet was the key—because we are small. We’re under ten billion dollars, so you cannot be levered up. It has to be—

David Marcus: Yeah.

George Dickson Jr.: —really secure.

David Marcus: That makes a lot of sense, and it really speaks to the bank’s broader character. When I joined the bank almost 10 years ago, one of the things that really stood out to me was how distinctive the model felt. On the one hand, it has the feel of a boutique private bank, almost like the old European institutions such as Pictet or Coutts—very relationship-driven and focused on long-term clients. But at the same time, the platform offers other capabilities that feel closer to a much larger investment bank. How did that combination develop?

George Dickson Jr.: I think it was about building boutique businesses that fit with high-net-worth people—Emigrant Fine Art Finance, for example, our insurance business, Galattioto Sports Partners, Emigrant Partners, which invests in RIAs, and Abacus, a lower-middle-market financing company. These were all great ideas in and of themselves, but they also fit within a Citibank or JP Morgan. You go there and say, “Oh, look at all these other high-net-worth businesses they have.” So Howard almost built those first, or alongside his vision of having a private bank. The private bank operates on its own, but when we have a client who has something particular—regarding art or other things—we can pull in an expert, and we’re all under one roof. We’re not so big that we can’t get people to respond to our clients.

David Marcus: That’s interesting, and it sounds like those pieces were very deliberately built to fit together around the client. Would you say that vision was there from the beginning, or did it come together more organically over time?

George Dickson Jr.: Oh, no, it was a vision. I’m convinced, because I was here during that time. When the Howard Milstein side of the family took full control of Emigrant Bank in the early 2000s, it was immediately evident he had an “if we build it, they will come” attitude. We refurbished our headquarters at 6 East 43rd just to change the culture, and we made it into as nice a private banking environment as you’d find at Goldman Sachs. His view was, “Look, if you don’t have that kind of look and feel, clients aren’t going to feel they’re at a competitive firm.” So he really built the infrastructure and the people first. Obviously, you have to have a team of the right kind of financial managers, and John Hart, who’s a vice chairman of the bank, and I had been managing the Emigrant Bank balance sheet. I think Howard decided at some point around 2010 that it made sense to have institutional money managers advising our ultra-high-net-worth clients, as well as non-profits, small corporations, and endowments. That’s really worked out well, because—and no disrespect to registered investment advisors—it’s a completely different thing when you’ve managed institutional money in the billions for many years and have direct relationships with Wall Street. The client immediately picks up that this is a different proposition.

David Marcus: Yes. It feels like everything we do is all about bringing institutional rigor to the private client market, which, as you say, doesn’t exist everywhere.

George Dickson Jr.: That’s right.

David Marcus: That’s helpful, and it really ties into how you approach investing today. How would you describe the core investment philosophy of the private bank, and how has that evolved over time as markets and clients’ needs have changed?

George Dickson Jr.: I think the core thing was to be different from our competitors. What we saw in the landscape was high-fee funds, often with very mixed performance, not tax-efficient—funds delivering tax bills to clients whether they liked them or not.

David Marcus: And you’re referring to clients who may have had their money managed by various types of private wealth groups—Goldman Sachs, T. Rowe Price.

George Dickson Jr.: Exactly. Well, first of all, we have institutional fixed income management, so we can solve fixed income with ETFs, which is fine for a lot of people and cost-efficient, or we can solve it with a separately managed account. Having managed almost a billion dollars of munis for the bank—and that was during the financial crisis—we’re able to talk to clients directly and build separately managed municipal accounts. But what also wasn’t happening was people reading the details behind some of these contracts. There was a whole blowup in the municipal market back then, and it came down to asking, “Is this a structural problem or a credit problem?” We sorted through things like that, and it demystified them for people. So we solve with separately managed accounts, whether munis or corporate bonds, where we don’t just rely on ratings—we also have a view on corporates. The regulators require us to review the corporates and have a credit committee, even for investment-grade corporates. On mortgage-backed securities, John and I had expertise going back to PSFS in Philadelphia, and that was another thing that hit during the financial crisis. You had a lot of things rated triple-A that were complete garbage—Wall Street had packaged them up to get ratings. When everything came unraveled, these were triple-C at best, or you had private-label, non-agency securities that were going to take a lot of credit losses despite being triple-A rated. So people came to us. I had a guy who came from Merrill Lynch and said they would no longer talk to him about his holdings because they were afraid they’d get sued—and this was stuff they had sold him in the millions of dollars, in tranches rated triple-A, and he had no reason to think otherwise. So we used our expertise to show people what they actually owned. This is what Howard would agree with—and his father, Paul Milstein, would agree with—cut the Wall Street BS and show people what it is. Demystify things. If you can’t explain it to an eighth grader, you’re either trying to steal from them or you don’t understand it yourself, and that’s really the core of the business. All of this is very easy to understand if you know what you’re doing and can explain it to people. It’s not rocket science; we’re not curing cancer here. It’s very straightforward. So I think it’s an elegantly simple offering: showing people what we’re doing, being transparent, and making sure it’s tax-efficient. On the fund fees—in this case it’s all ETFs—we’re talking about five or six basis points, so we’re saving money there. And then there’s the allocation. We see portfolios come to us that are a potpourri of things, and you find out they own Nvidia and Microsoft and 10 different—

David Marcus: Funds.

George Dickson Jr.: —yeah, funds. Exactly. So we look through it and make sure you don’t have over-allocation. Everybody loves tech right now, but if you love it, let’s at least know how much you really have. A lot of people shunned global markets up until last year because the dollar was so strong and the S&P was so strong, but our models generally include global markets, because there’s a day that comes when the dollar is weaker, and a day that comes when those markets—

David Marcus: Yeah.

George Dickson Jr.: —get cheap and outperform.

David Marcus: That makes sense, and it ties directly into how you’re thinking about allocation more broadly. The ETF platform has become a centerpiece of the private bank’s investment management business. How did that come about, and how does it fit into what you’re describing around building properly allocated portfolios across asset classes?

George Dickson Jr.: So, like I said, we started with separately managed fixed income accounts initially. As we grew, of course you see that everybody tends to have equities, or equities with big capital gains, and you need a solution for that too. You don’t want to just take in an account and recognize capital gains. So we evaluated it and said, you know, we’re not stock pickers, so we don’t believe in that. We decided the solution would be ETF models. We have six model portfolios, and, as I mentioned, they’re low-fee, with allocation and balance to risk. You can have all equity, aggressive, conservative, moderate, a blended portfolio, or all fixed income. So that’s one solution. And then when people come to us with a large portfolio of a couple hundred stocks, or seventy stocks, we don’t just say, “Well, we can’t handle that.” We use Parametric, which is our partner—they’re owned by Morgan Stanley. They’ve been at it probably over thirty years in a tax-managed solution, and we’ve used them for about—I think our oldest account is twenty years now. It’s a really good solution. You’re basically able to take individual stocks, set a capital gains budget, and manage toward that budget. Over time, the tracking error might be four or five percent, but it will come in line with an index such as the S&P 500, the NASDAQ, or the Russell. So it’s a way to manage a collection of stocks tax-efficiently over time while still owning your individual stocks. A lot of times people will have a stock that blows up, and they become very open to more diversification—or they missed the tech rally, for example. We’ll look at their collection of stocks and say, “Well, of course you did. You’re really heavily weighted in consumer cyclicals,” and they’ll say, “Oh, I didn’t realize that,” because they had a stock picker who believed in it for whatever reason. So just showing them how much they’re over- or underweighted in the various sectors helps them say, “Yeah, it would maybe make sense not to have that”—unless they have a bias. If someone says, “Hey, I really like healthcare,” well, okay—but you should know how overweight you are and what that risk is.

David Marcus: That makes sense. And it sounds like a big part of it is helping clients really understand what they own and the risks they’re taking. When you’re having those conversations, are clients typically open to the ETF approach once you walk them through how it works?

George Dickson Jr.: Yeah, and it’s funny—in the last couple of years, much more so. I think the financial news media has done a good job of coming to the same conclusion we have. Again, like I said, it’s not rocket science. We have an ETF committee: Howard Milstein, Barry Friedberg, who has quite a history on Wall Street, John Hart, myself, and Angelo Gambino. We’ve all worked together this entire time at the bank, so we reached this conclusion years ago. And as we’ve been doing this, nine times out of ten now, when we talk about our models and our proposition, most people already kind of know and want that. Nobody looks at it and says, “Oh, that’s not for me.” Once they understand it, they’re very eager to say, “Yeah, we want to do that.” Our clients probably also skew older, so they’re getting to a point in life where they don’t want blowups or surprises—they really want to manage risk. A lot of people were conditioned to take shots at things, or here’s a hot ticker, a hot stock to buy. They’ve been through that, and now they’re thinking, “Okay, this money’s got to last me another 30 or 40 years,” or, “I want to have a legacy for my kids.” So they’ve settled down and realized that a lot of what they were doing was gambling.

David Marcus: That’s a huge part of the education right there—when the light switch goes off and they realize there has been a certain amount of gambling going on.

George Dickson Jr.: Oh, it has been. It’s funny—you see it in things like structured products, David. Structured products are just a way to bring the casino to the retail investor. It’s like parlay betting, almost. Wall Street was doing parlay betting long before modern gambling sites. You won’t get any dividends, but in seven years, if the S&P is lower, you’ll get your money back—and it’s like, what kind of deal is that? These were products designed completely in the interest of Wall Street, completely for their fees. And they’d get comfortable saying, “Well, Mom and Pop are going to be fine because they’re not going to lose their money.” So we see that. Talk about untangling complex mortgage-backed securities—when I see an account that has a lot of structured notes in it, almost always the person has no idea what they were sold, and it’s almost always a really bad deal.

David Marcus: Yeah. And that really highlights how opaque some of these products can be. Switching gears a bit, one of the things that makes Emigrant unique is that it has remained a family-run institution across generations. Over the past decade, Michael Milstein has spent a lot of time building and investing in the venture ecosystem through initiatives like Grand Central Tech and Company Ventures, which connected the bank to a very different part of the entrepreneurial world. Today, with the transformation of 22 Vanderbilt into a hub for the tech and venture communities, and with Michael now serving as co-CEO, it feels like those efforts have become a core part of the bank’s evolution. From your perspective, how have you seen Michael’s role evolve within the institution?

George Dickson Jr.: It’s been an iterative process—just kind of a morphing into that position. You know, he’s the fourth generation and Howard’s only son, and I’ve known him forever. He’s in his late 30s now, and—

David Marcus: Yeah. And how long have you—did you say you’ve known him?

George Dickson Jr.: Yes. I’m coming up on 38 years, so yes. My first real interaction with Michael was when he was, I guess, in college. He did an internship and joined the capital markets group for that summer. It was a really busy time—a lot of the post-financial-crisis stuff was going on—and he just worked so diligently. It was a relief, you know, to have the boss’s son working there and have him working as—

David Marcus: Yeah, not having to give the report that your son—

George Dickson Jr.: Oh…

David Marcus: —isn’t working hard enough.

George Dickson Jr.: Harder than anyone else. And that was just one example. He worked through all these different areas, probably from his late teens into finishing college, and I think he had a passion for technology. He really dug into that in his early 20s and started building. He had a vision for Grand Central Tech, which is a tech incubator, and that has led to three venture capital funds—Company Ventures I, II, and III, which is now coming out. That was kind of his forte. And the same way he came into capital markets and learned how variable-rate municipal securities work, he did that same kind of scholarship in venture markets. And now here we are—it’s 20 years’ worth of it. So for him to be named co-CEO last year, this is a man who earned his weight and his time, and I witnessed it. Then there’s the reinvention of this building I’m in today, 22 Vanderbilt. It was a great location, but unremarkable. I think the family bought it in the early ’80s; it was the Biltmore Hotel—a nice building, but nothing that exciting. They reinvented it as a tech hub. The lobby has the feel of a W hotel, and I’m sitting in some beautiful space looking at Grand Central. And again, the vision there was Michael and Howard saying, “Let’s build technology to compete with Silicon Valley.” And sure enough, COVID interrupted it. This is where the intestinal fortitude of the Milstein family really comes into play, David, because I can remember they had just started construction and everything was shut down. My group—we’re big in-office people—and I came over here, looked at it, and said, “This is really bad.” I mean, were people even coming back to the office?

David Marcus: Yeah, one of the key drivers was bringing people together across the tech, venture, and investing ecosystem, and then all of a sudden you go through a period where everyone thinks we’re going to be working from home forever. That must have been a very challenging time.

George Dickson Jr.: It was kind of the worst-case scenario for something like that. But again, they had the fortitude to say, “Okay, this too shall pass.” And it did. Here we are, five or six years past that time, and you can’t get office space in this building—it’s fully leased. We’re right next to One Vanderbilt; there’s a whole corridor of offices here. I was just over at the new JPMorgan headquarters for lunch last week, and that’s a whole other order of magnitude—10,000 employees in the office five days a week. For somebody who likes to be in the office collaborating, it was like a Xanadu of capitalism. It’s the golden era.

David Marcus: It really was.

George Dickson Jr.: And so we’re in the right spot. And I just read today—it’s not just me talking our book, it’s a fact—that New York is now really second only to San Francisco and Silicon Valley, and it’s only getting greater. Young people want to come here. Everybody’s back, and it’s good.

David Marcus: It goes back to what we were talking about earlier—whether building the different parts of the platform was serendipity or vision. Looking back, what Michael and the team were doing with Grand Central Tech and Company Ventures felt important at the time, but now, with 22 Vanderbilt and everything around it, it almost feels like he saw where this was going all along.

George Dickson Jr.: Yep. It got a little sidetracked with the pandemic, but I’ll tell you, now it’s been supercharged by everyone coming back and people having that realization. And AI, I think, is the big thing, right? Everybody’s talking about how it’s going to cost jobs, but I think it’s creating a ton of tech jobs, with people looking for solutions, and they want to be together collaborating.

David Marcus: Yeah.

George Dickson Jr.: And they want to be within a radius of Grand Central here.

David Marcus: Yeah.

George Dickson Jr.: So we’re very fortunate.

David Marcus: Yeah.

George Dickson Jr.: We’re very fortunate.

David Marcus: That’s great, and it really feels like all those threads have come together in a meaningful way. As you look at today’s environment more broadly, what lessons from past market cycles still guide how you approach investing?

George Dickson Jr.: It’s funny. Obviously, there are a lot of younger people here who have been developing over the years—associates, vice presidents—so I’m at the point now where it’s a little more fatherly. And here we are having another war. I was here for the first Gulf War in ’91, I was here for the second, and I was here for all the post-9/11 stuff. This one is different, and it’s shocking. It kind of rhymes with some other moments, but it’s really volatile, and it’s just a reminder that if it’s not one thing, it’s another—to quote Roseanne Roseannadanna from SNL. And it really is. We had 22% corrections in 2018 and in the 2020 pandemic, and then ’22 was a bond-and-stock Armageddon—both markets were down sharply. Then we had this special period of ’23, ’24, and ’25, all strong equity markets, and decent for bonds. Bonds had a bad correction but are now in a nice, normal corridor of 4 or 5%. So we came into the year really happy. Oh, we had the tariff thing last year too, but that was brief—just a shakeup, and a tremendous opportunity. That’s a case where the retail investor got it right and Wall Street got it wrong. The wonks sitting around watching the Fed, and typical classical economics, just said, “Oh, this has to be a disaster.”

David Marcus: Yeah.

George Dickson Jr.: But the retail investor—

David Marcus: But the wisdom of the crowd won out.

George Dickson Jr.: Yeah, that was correct. And so now we’ll see. The market’s holding up very well. You know, this war is different from the other Gulf Wars—it’s a fast and furious objective, and a lot has been accomplished in 20-some days. But I was talking with some clients who have cash, and last week they were saying, “Let’s wait until this week,” and sure enough, things are getting rougher. Oil’s back up to 116. It’s always challenging, David. So the key gets back to having appropriate allocations and having cash. If people think something’s coming, we encourage them—it’s no dark thing to hold a lot of cash if it makes people feel better. So we do encourage people, if they want to be defensive, not to be fully invested, and to step up. We don’t have a crystal ball, but I do know it’s better to buy today than it was a month or two ago. Some of the froth has come off—there might be more froth to come off—but the key is not to get too shaken up about it and to stay the course.

David Marcus: Yeah, that makes a ton of sense, and it’s that calm, measured approach that I imagine resonates with clients as well. Well, we’ve covered a lot of ground today, and I know there’s much more we could get into, but let’s leave that to a future conversation. George, thanks so much for joining. I really enjoyed the conversation.

George Dickson Jr.: Hey, thank you, David. I really enjoyed it as well.

David Marcus: Thanks for listening to Partnering to Create Wealth. If you enjoyed today’s conversation, please subscribe and share the podcast. To learn more about how we help our clients protect and grow their wealth, visit the New York Private Bank & Trust LinkedIn page, or visit our website, nypbt.com. I’m David Marcus. See you next time.