Bank of America Corp., the second-biggest U.S. lender, has eliminated some managers from a unit catering to wealthy families, said two sources with knowledge of the move, who asked not to be identified.
Executives who oversaw trust officers and private-client financial advisers at the bank's U.S. Trust unit were dismissed this month amid a companywide review of expenses at the bank, said the sources, who requested anonymity because the plans are private. They declined to say how many of about 40 managers were affected.
BofA chief executive Brian T. Moynihan is seeking ways to lower expenses without reducing the productivity of wealth managers. He has said that he will reveal details next month of how his efficiency effort, Project New BAC, may trim as much as $3 billion in annual expenses in the company's wealth management and investment banking units.
“Firms are tightening their belts, and their mentality is that as long as it's not client-facing, they're OK to go,” said Mindy Diamond, president of Diamond Consultants LLC, an executive search firm. “But there's no question that this impacts those employees who remain.”
Trust officers help ensure that the company adheres to the laws governing a specific trust when handling a client's assets. The executives to whom they report, some of whom were targeted for dismissal, oversee a region typically the size of a city.
Some managers overseeing private-client advisers also were cut, the sources said.
NONESSENTIAL TRAVEL
U.S. Trust Bank of America Private Wealth Management, which has about 4,300 employees, banned nonessential travel last year for some personnel as a cost-saving measure, the sources said.
Keith Banks, president of U.S. Trust, didn't return a call seeking comment.
U.S. Trust, founded a decade before the Civil War, is the country's biggest company managing trusts, the firm said, citing Federal Deposit Insurance Corp. data. Trusts typically are set up by wealthy families or institutions to handle assets for offspring or charities.
BofA bought the business from The
Charles Schwab Corp. in 2006 for $3.3 billion and combined it with Merrill Lynch & Co. Inc., which it purchased in 2009, to create its wealth management division. BofA had about 19,000 wealth advisers with $2.2 trillion of client balances as of March 31.
The lender plans to cut more than 300 jobs from corporate and investment banking and trading units, a person briefed on the matter said last month. The bank is in talks to sell its non-U.S. wealth management operations to Julius Baer Group Ltd., a transaction that would reduce head count by less than 2,000.
Mr. Moynihan has said that the first phase of his cost-cutting plan, announced last year, will trim $5 billion in expenses and eliminate 30,000 jobs from retail-banking and support units.
BofA had about 278,700 employees as of March 31.
