Banks on Wheels

Last updated on May 13th, 2019 at 02:36 pm

Over the past five years, banks have greatly increased the depth of services they offer to high net-worth customers, both in the private banking and wealth management areas. Traditionally, banking for high net-worth individuals generally involved them driving to the bank’s largest local office to have a series of meetings with their private banker, wealth advisor, trust administrator and others. Often, those meetings would take up a large part of the client’s day.

Today, private banking and wealth management services have become much more focused on the customer. Bankers and other financial advisors travel to where the client is comfortable, and the bankers are able to take deposits, deliver key reports and offer advice on the road.

Convenience to the client is a growing expectation of wealth management services, because many wealthy clients have busy lives.

The increased focus on private banking and wealth management is one that mirrors developments in American society, many bankers say.

"There is more wealth accumulation going on generally, as people are taking more responsibility in preparing for their own retirement," said Daryl Waszak, senior vice president of M&I Wealth Management, a division of Milwaukee-based Marshall & Ilsley Corp. "There is also the factor with the baby boomer generation – there is a great deal of (wealth) accumulation going on."

Many banks have developed their private banking and wealth management services as a result of client requests and needs.

Richard Durkin, senior vice president and regional manager of private client services for the Milwaukee office of Wells Fargo Investments, said he has seen an increasing need for solid financial advice since the late 1990s.

"For a decade, as people made a lot of money in the 1990s, everyone said, ‘This is easy,’ and put a lot of money in the dot-coms," Durkin said. "The bubble broke, and some people walked away hurt. And a lot of them didn’t think they could do this by themselves anymore."

Durkin said many investors, both baby boomers and Gen-Xers alike, are seeking financial advice now, mostly because they see a need for expertise and they want to maximize their earnings.

To meet the needs of high net-worth customers, many banks that offer private banking and wealth management services have developed a single-banker approach. Instead of dealing with a multitude of different bank employees every time they need a question answered or a piece of information, the wealthy clients are assigned private bankers to serve their needs.

"We almost look at them (private bankers) to be the quarterback – to coordinate a lot of different services," said Dave Baumgarten, executive vice president for regional banking of Green Bay-based Associated Banc-Corp. "Most of our private bankers have a commercial banking background. Some of them will be licensed brokers, and some will have their CFP’s (Certified Financial Planning certification)."

The functions of private bankers have also diversified over time because banks have started to offer more complex and sophisticated financial products and services, Baumgarten said.

"Banks could do investments before, but the types of investments and the sophistication are clearly much broader and at a higher level than they were five years ago," he said.

Having clients form a relationship with one private banker or wealth manager simplifies the bank’s services with the client and can often make things easier for them to understand, Waszak said.

"We try to provide integrated services with asset management so our clients don’t have to go to two or three or four different organizations or different areas of the bank," he said. "We want them to have a single point of contact. What we try to do is have a banker that understands, from working with a client, what their needs might be and is able to assemble the right resources, anticipate what their needs are and be an idea generator."

By contrast, Wells Fargo uses a team approach, requiring that all of its high net-worth customers have access to a private banker, an investment manager, a trust manager and a broker, according to W. Peter Larson, senior vice president and wealth management director for Wells Fargo.

One of those members is the "relationship manager" and is the client’s main contact, but the team approach ensures that the client’s portfolio is looked at by all four team members and that those members work together, Durkin said.

"The team’s focus is planning," Durkin said. "By bringing the four disciplines to the table, they’re gathering more information, more issues are discussed and more solutions are found."

Like their peers in commercial banking, most private bankers and wealth managers will routinely travel where their clients feel most comfortable doing business. Others are developing locations that cater to high net-worth clients’ locations, such as the new M&I branch planned for Pabst Farms in Oconomowoc. There are even other banks, such as The Private Bank, which opened last year in downtown Milwaukee, that have been developed specifically to serve the private banking and wealth management needs of wealthy clients.

The level of sophistication and number of different wealth management services offered to high net worth customers will continue to evolve in coming years, particularly as the baby boomer generation ages and looks at retirement.

Woszak said M&I is working to further integrate its trust, private banking and brokerage services, along with other asset management services. Other banks will continue to focus on the same areas, he said.

"You will see more integration of various services into a private banking or wealth management model," Woszak said.

Baumgarten said Associated Banc-Corp is constantly looking to refine its offerings to high net-worth clients.

"Within that context, various financial institutions will be able to differentiate themselves, by size, to develop the expertise and array of services that the private customer will demand," Baumgarten said. "I think it can be a very profitable business segment if done well."

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