Wealth management is a top priority for many banks and financial firms across South Florida, and they court their high net worth clients in myriad ways.
Seated in a private room at Café L’Europe in Palm Beach, jeweler Judith Ripka munches on her Mandarin Chinese chicken salad and listens to Valerie Ramsey discuss her book, √Gracefully — Looking and Being Your Best at Any Age.
Ripka flew in from New York especially for the luncheon, hosted by Sabadell Bank & Trust for three dozen of its wealth management clients and guests, as part of its “Women’s Connoisseur Series.”
“This bank is a wonderful bank,” said Ripka, who bought a vacation home in Palm Beach two years ago and was referred to the bank by her real estate broker. “They understand their clients, but they care about the clients, too.”
Genteel as can be, the setting offers a peek at the perks of South Florida’s wealthy banking clients who entrust financial firms to invest their savings, build for their future and plan their estates.
Catering to those clients by giving top-notch service — even, in the case of Sabadell, chauffeuring one attendee who had broken her foot and couldn’t drive — is all part of the package.
“We really try to make it informative, useful information,” said Debra Vasilopoulos, regional president of Palm Beach County for Sabadell Bank & Trust, whose events also include a series of lectures by Johns Hopkins physicians. “In addition to our clients needs, we care about their well-being.”
Across South Florida, banks, trust companies and financial advisory firms of all sizes are focusing on wealth management as a key part of their financial repertoire.
“If you intend to deal with businesses and their owners and professionals and high net worth individuals, it’s essential that you be in the wealth management business,” said Mario Trueba, president and chief executive of Miami-based Sabadell United Bank, which bought failed Lydian Private Bank last year to convert it to its wealth management division, Sabadell Bank & Trust.
Investing for the wealthy has a rich history nationwide.
J.P. Morgan has been serving the upper crust for more than 160 years. Northern Trust bases its heritage, dating to 1889, on the wealth management business. Fiduciary Trust International of the South has managed money for high net worth individuals and foundations since 1931.
Major banks such as Wells Fargo also cite the segment as its utmost priority.
“The number one strategic initiative for all Wells Fargo is to grow our wealth management business,” said Jason Williams, Miami-based regional managing director of Wells Fargo Wealth Management. The mandate is spelled out in a booklet on the bank’s vision and values, which he carries in his jacket pocket.
Wealth management is defined as “financial services provided to wealthy clients, mainly individuals and their families,” said Alexander Camargo an analyst at Celent, a financial services research and consulting firm.
To enter the domain, wealth management firms require a minimum level of investable assets. Many banks segment their customers into tiers of wealth, defined differently by each bank. Celent defines the tiers as beginning with the mass market, those with liquid assets up to $250,000, followed by the mass affluent market, those with $250,000 to $1 million in investable assets, then high net worth clients of $1 million to $10 million, and lastly ultra high net worth investors above $10 million, Camargo said.
In South Florida, wealth management has weathered the economic downturn better than many other areas of banking and is the closest of any segment to being recession-proof, said Ken Thomas, a Miami-based economist and independent banking consultant.
It is also one of the three segments — along with the huge retail market and the international banking/trade finance business — that make South Florida one of the nation’s five most attractive areas for banking, he said.
Moreover, wealth management has the most growth potential of all three, Thomas said, which is why every institution wants in on the game.
“There is more demand for wealth management because the rich are getting richer,” he said. “And it is even more so in South Florida because we have access to more wealth because of the proximity to Latin America”
Indeed, as institutions compete for a slice of the lucrative pie, the competition for clients is fierce. And every institution touts its approach as best.
“The end consumer is demanding a holistic one-stop shop, and financial institutions are going to have to meet that demand to be successful into the future,” said Jeff Ransdell, managing director and market executive for the Southeast for Merrill Lynch Wealth Management, which is part of Bank of America.
Perhaps most of all, wealth management bankers and clients cite the importance of their relationship.
When Danny Toccin sold his portfolio of apartment buildings in 2005, he needed to find an alternative way of investing. So he interviewed various firms and divided his funds among four institutions, including Wescott Financial Advisory Group.
“I need a total comfort level,” said Toccin, 62, of Miami. “I am a micromanager by heart, and I want to know where I am, where we stand, where we are going. I also didn’t want to be a minnow in an ocean. I wanted to be somewhere I would be like a big fish in a lake.”
But after a while, he found he didn’t feel comfortable with the other three firms.
“With Wescott I have so much trust in them that I probably did something other investors wouldn’t do,” said Toccin, who has a wife, Ferne, and two grown children. “I put all my eggs in one basket because I have so much trust and there is so much transparency.”
Indeed, Wescott Chief Executive Grant Rawdin views the advisor/client relationship as very personal. The firm even has an industrial psychologist test prospective advisors for empathy before hiring them.
“It’s why I changed my career from being a tax and business lawyer to being a financial advisor,” said Rawdin, who divides his time between offices in Coral Gables and Philadelphia. “They close the door and they tell you things. You become a psychologist. Money leads into other intimate admissions and issues.”
Financial firms say they bring in new clients through referrals from other clients, attorneys and accountants, as well as from the networking bankers in the community.
For banks and financial firms, wealth management starts with devising a plan, and input from the client is paramount.
“We really want to get to know our clients.” said Alex Navarro, senior vice president and private financial advisor at SunTrust in Bal Harbour. “It’s like going to a financial doctor. We want the client to feel comfortable enough to disclose all their financial concerns so we can do a good job at addressing them. The financial advice is only as good as the information we get.”
In fact, analysts and bankers say that amid the turbulent stock market, clients have become more watchful of their investments.
“Consumers are more demanding now,” said Camargo of Celent. “They want to see their advisors more, they want their advisors to inform them of the risk more, and they want to know they are protected on the downside, so if the market crashes, they don’t lose their entire life savings.”
Going a step beyond is also de rigueur. Many South Florida institutions invite their high net worth clients to a range of seminars, sporting events and concerts that they sponsor, along with speaker-led luncheons and dinners.
J.P. Morgan Private Bank dedicates the 33rd floor at 1450 Brickell Ave. in Miami to its wealthy clients, a private client center unparalleled in cities other than New York, said Phil Conway, Southeast regional head of J.P. Morgan Private Bank.
The center offers lounges and private dining rooms, conference rooms with video capabilities, a sky-high view and a chance to see the bank’s extensive contemporary art collection, which was started by David Rockefeller.
J.P. Morgan also provides summer and winter reading lists to its private clients. Northern Trust hosts a literary society in Miami that meets regularly.
In February, UBS hosted an event in Miami with former presidents Bill Clinton and George W. Bush for its wealth management clients.
And Wells Fargo and Fiduciary Trust have met with clients on private retreats to discuss investing and estate planning, and to teach younger generations to be responsible stewards of their wealth.
Posted by Steven Maimes, The Trust Advisor