1
   

Wells Fargo tailors service to super-rich if you have $50. BBB is out of luck

 
 
Reply Tue 1 Nov, 2011 10:17 am
Wells Fargo tailors service to super-rich
By Andrew Dunn - charlotte Observer
Nov. 01, 2011

Wells Fargo is launching a boutique business to serve families with at least $50 million in assets, an example of the banking industry's increasing focus on high-net-worth customers.

Abbot Downing, as it is to be called, will manage $27.5 billion in assets for about 575 clients and will offer wealth management, investment and banking services for families and their endowments and foundations.

It has about 300 employees, including a team of about a dozen employees in Charlotte and 80 across North Carolina.

The brand will roll out in April. It merges Wells Fargo's Family Wealth and Lowry Hill businesses and Wachovia's legacy Calibre business.

"By bringing these three businesses together, we're going to have a lot more capabilities," said James Steiner, who runs Abbot Downing. "We'll have a national offering, and that will be extremely important."

The business is named after the company that custom-built the stagecoaches for Wells Fargo in the 1800s, which have become the bank's primary symbol.

The new business is an attempt to gain market share in a growing segment of the population, said David Carroll, Wells Fargo's senior executive vice president in charge of wealth, brokerage and retirement.

Fortunes like that tend to come at a "liquidity event," such as when an executive retires and cashes out shares of stock or when a business is sold. With more Americans hitting retirement age, an increasing number of business owners and executives are looking for an exit point, Carroll said.

Beyond wealth planning, Abbot Downing also seeks to highlight families' values and legacies.

The company employs psychologists who work with the families to understand their values and how those play into their philanthropic endeavors. Abbot Downing also has a family history group to show clients where they came from.

Wells Fargo joins several banks in ramping up services for high-net-worth customers, a highly profitable area at a time when fee income has been hampered, said James Early, an analyst with The Motley Fool.

"Banks are going where the money is, pure and simple," Early said. "They've had their biggest profit channels choked off. They're going after the people who still have money, and those are the high-net-worth individuals."

Bank of America CEO Brian Moynihan said in a conference call with analysts in October that the bank is growing its "high-net-worth businesses."

The bank has been hiring advisers for "preferred" customers, or those with between $50,000 and $250,000 in assets, with the plan of doubling its staff in that arena. Bank of America announced Monday that it has hired 25 advisers around the Southeast, including Charlotte.

Similarly, Barclays Capital has been hiring in its wealth management division.

Banks have focused on "relationship banking" since the baby boomer generation began nearing retirement age as part of a diversification from standard interest-related businesses. But the recent cap on the "swipe fees" merchants pay on debit-card transactions and changes to overdraft fee rules have pushed them toward it even more, said Greg McBride, senior financial analyst at research firm Bankrate.com.

"It's not a new strategy," he said, "but it's gained some increased urgency."

Read more: http://www.charlotteobserver.com/2011/11/01/2739154/wells-fargo-tailors-service-to.html#ixzz1cTG5TBy8
  • Topic Stats
  • Top Replies
  • Link to this Topic
Type: Discussion • Score: 1 • Views: 1,146 • Replies: 2
No top replies

 
tsarstepan
 
  1  
Reply Tue 1 Nov, 2011 10:26 am
@BumbleBeeBoogie,
Oh shucks. I was going to ask you BBB if I could borrow $50 million in order to qualify. [sigh]
0 Replies
 
engineer
 
  1  
Reply Tue 1 Nov, 2011 12:07 pm
@BumbleBeeBoogie,
If it's any consolation, WF clearly intends to soak those clients well. They plan on having one employee per two customers. That employee's pay, the overhead associated with him and a decent profit for the bank, let's call it $250K total, will have to come from those two clients. I wonder what they are going to get for that.
0 Replies
 
 

Related Topics

Dollar collapse - Question by cicerone imposter
Persuading Banks To Give Homeowners A Break - Discussion by BumbleBeeBoogie
Let the free market break up the banks - Discussion by BumbleBeeBoogie
Lien on my property??? - Discussion by PUNKEY
Bank Bailouts, with Interest - Discussion by RexRed
 
  1. Forums
  2. » Wells Fargo tailors service to super-rich if you have $50. BBB is out of luck
Copyright © 2022 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.03 seconds on 01/25/2022 at 11:09:10