I recently met a bunch of Bankers who are interested in the Wealth Management space. Specifically, these guys are senior officers at small banks (say $500 million to $5 billion in deposits) who see Wealth Management as an important growth engine for their institutions for years to come.
Now in Wirehouse World, going to a Bank Brokerage operation has always been seen as failure. That's because the Big Bank Broker in a Bank Programs (Wachovia, Citi, Chase, Bank of America) rarely expected an Advisor to move a book with them. They wanted a skilled Advisor to handle the medium sized accounts that did business in the branch. Typically, once an account got too big, the Advisor would lose the account to the Private Banking part of the Big Bank. So, you can't blame Wirehouse Advisors to be skeptical of this channel. After all, no Advisor is happy to see a big relationship yanked away.
For more than ten years, we've heard about the Financial Supermarkets and how the captured clients of the banks (as Willie Sutton said: That's where the money is!) would create these wonderful synergistic relationships between bankers and brokers. Referrals would pass effortlessly back and forth and clients would be better served by having the power of the entire institution watching their financial well-being. And perhaps my hair will grow back this weekend……
Citi, of course, was never able to get it right. They moved their Broker in a Branch program over to Smith Barney, gave them Smith Barney business cards, only to sell Smith Barney to Morgan Stanley (sorry, I mean to say that they formed a joint venture with Morgan Stanley consisting of the combined retail brokerage operations). And what they sold did not include the Brokers in a Branch (the former Citibank Investment Services).
Obviously, the jury is out still on Bank of America and Merrill Lynch. The skeptical Merrill Advisor is confused on why they should push a B of A checking account when they have been selling the Merrill CMA product (a checking account!) to their clients for years. The optimistic Merrill Advisor appreciates the banking leads that have thrown his way. Time will tell.
But if these smaller banks, affiliated with a real, big-time brokerage platform, can truly introduce their best customers to a select few Advisors, AND can truly give a deal that shows that they are serious about attracting serious talent, then this cynical headhunter will get excited: Good Advisors will have yet another option.
