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Wells Fargo, Sanctuary target wealthy in Bay Area

Growing families necessitate more complex planning, the firms contend

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By Charles Paikert

April 7, 2008 6:01 am ET

New approaches to serving the increasingly complex needs of wealthy families were unveiled last week by two San Francisco-based companies, Wells Fargo & Co. and Sanctuary Wealth LLC.

Wells Fargo & Co., which began as a San Francisco bank in 1852 and now has $575 billion in assets, formally launched its Family Wealth Group, which targets ultra-wealthy families with $50 million or more in investible assets.

Meanwhile, Jeff Spears, a well-known Bay Area wealth manager, is also focusing on wealthy families — as well as their advisers — by offering such services as a financial platform and customized software through his new firm, Sanctuary Wealth LLC.

BIG FAMILIES

"We're not just talking about one household anymore for families of wealth," said Michael Cole, executive vice president and national director of Wells Fargo's Family Wealth Group.

"You now have multiple homes, families, legal entities, custodian and generations within the families," he said. "There is so much complexity now that we believe there's a demand to provide clarity."

With an abundance of technology companies in Silicon Valley, a solid base of old money, a pricey real estate market and a steady flow of venture capital, private equity and initial public offerings, the Bay Area has long been viewed as a key market for many wealth managers.

Wells Fargo's new unit is in-tended to help the bank keep pace with such competitors as Charlotte, N.C.-based Bank of America Corp. and Sun Trust Banks Inc. of Atlanta, said Robert W. Casey, senior managing director of research for Wheaton, Ill.-based Family Wealth Alliance LLC.

Mr. Cole acknowledged the Family Wealth Group's primary competition comes from "integrated boutique-style multifamily offices" that are subsidiaries of large banks, such as BofA's U.S. Trust wealth management division, SunTrust's GenSpring Family Offices LLC unit and Charlotte-based Wachovia Corp.'s Calibre division.

In addition to asset management, Wells Fargo's Family Wealth Group will offer a specialized platform that incorporates risk budgeting, client reporting tools, debt and liability management and analysts dedicated to covering alternative investments.

The wealth group, which had been undergoing a "soft launch" for the past year and already has $7 billion in assets under management, will also focus on stewardship issues for ultra-high-net-worth families that are growing in wealth and size, Mr. Cole said.

For example, the Family Wealth Group will host family retreats that focus on family history, education about wealth and intergenerational planning, he said. It will also have consultants on staff to assist families with issues such as relationships where a father and son may also be employer and employee, Mr. Cole added.

One of the Family Wealth Group's analytical tools is designed to "map wealth dynamics, organizational architecture and financial structure across the family tree," according to Mr. Cole.

In addition, the group will include a think tank, the Wealth Planning Center, that will research issues that affect ultra-high-net-worth families.

Sanctuary's target market, meanwhile, is families with at least $10 million in investible assets as well as advisers to those families, said Mr. Spears, who most recently had been managing director of San Francisco-based Presidio Financial Partners LLC.

The firm's business model, he said, is also driven by the growing needs of wealthy families.

"Families are getting larger, and can benefit from new technology and customized software, as well as expense management, general ledger accounting, monitoring activity in trusts and foundations and macro planning for all family activities," Mr. Spears said.

Mr. Spears, who left Presidio a year ago, said he was encouraged by the interest expressed by families and advisers in the Bay Area.

"It's a great idea," Mr. Casey said.

"There's a need for consolidated reporting," he said. "The challenge will be to package and deliver those services."

Mr. Casey also said that the market for services to ultra-wealthy families remained "very robust."

E-mail Charles Paikert at cpaikert@investmentnews.com.

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