The tumult in the stock market during the 2009 credit crisis drove many people to banks for wealth management expertise, according to Commerce Bank Chairman and CEO David Kemper, who talked about Commerce's trust growth at the bank's annual meeting in April.
Commerce Bank, unlike some of its competitors, grew its net interest income and noninterest income over the past three years, and the bank's dividend has increased for the past 42 years.
"One thing the last several years has proven is that a lot of people who want their assets managed want a strong financial institution with its own capital with staying power, with probably a little more long-term conservative approach to what they're doing," Kemper said at the meeting.
In other words, not Bernie Madoff. Some bankers are finding that their rich customers take comfort in big corporate brand names over hotshot hedge fund managers.
At PNC Bank's local wealth management office in Clayton, Mo., high-net-worth individuals can expect a minimum of three bank staff assigned to their accounts to answer any financial question they have, and the consultation goes far beyond investment advice.
"We take a holistic view of a person, from retirement to cash-flow planning to estate planning," said Maurice Quiroga, managing director and executive vice president of PNC Wealth Management's office in Clayton.
PNC Bank is working on new online services for its wealth management customers so they can access income projections on their smartphones and contact PNC's wealth management staff with questions about their accounts via email or text message. Those services are expected to be rolled out by the first quarter of 2012.
The increased focus on growing wealth management has caused many banks to hunt for high-profile talent. In late June, Clayton-based Enterprise Bank & Trust hired Joseph Gazzoli as chief executive of Enterprise Trust, its wealth management and trust business. Gazzoli most recently worked at AHM Financial establishing its asset management business and formerly headed the asset management for UMB Financial.
"We're staffing to do it very well," said Enterprise Bank executive Peter Benoist. Benoist said Enterprise Trust was growing its wealth management client base locally and at its branches in Arizona. Many of its wealth management customers are business owners who didn't spend a lot of time or attention on their investments until the recession.
"From a personal planning perspective, we're seeing a sense of urgency from them now," Benoist said. "They know it's critical."
Last July, U.S. Bank hired Michael Cole from Wells Fargo & Co., where he served as national director of its Family Wealth Group, to lead its ultra-high-net-worth business. Cole is spearheading the new business unit U.S. Bank launched in April, Ascent Private Capital Management, targeting those with investable assets of $25 million or more. The bank previously offered services to this group before, but the new branding reflects efforts to expand its service offerings and its financial advisor staff nationwide. U.S. Bank's first two Ascent offices will open in Denver and Minneapolis this year, with several more offices planned.
"U.S. Bank three to four years ago looked at wealth management and identified it as an avenue of growth for the bank," said Mark Jordahl, president of wealth management at U.S. Bank.
Jordahl said he was increasingly seeing demand from ultra-high-net-worth individuals for establishing trusts for charitable giving that will last for years. "It's becoming much more about managing the impact of the wealth you're blessed to have."
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